Hotel rates in Sydney could rise as the result of the carbon tax


Travellers are set to be the big losers as a result of Australia’s new carbon tax, with a survey this week finding three quarters of hotels have already increased room rates or plan to do so.

A survey undertaken by Tourism Accommodation Australia (TAA) members at the weekend (Jun 31) has revealed what the domestic tourism industry had been dreading – that prices will rise.

“Some hotels have already raised prices in response to increases in their operating costs but the majority are mindful of the ACCC’s threats of penalties will take some time to further assess the level of cost increases from suppliers,” said TAA Managing Director Rodger Powell.

“There is significant uncertainty around the impact of the carbon tax and the majority of our members are waiting to see the exact effect of the tax on their input costs before finalising new pricing,” he said.

Powell said there was a level of “uncertainty in the industry about how big an impact the introduction of the carbon tax will have”.

The introduction of the carbon tax comes at a time when the Australian tourism is already being put under pressure with the increase in the Passenger Movement Charge (PMC) and a growing number of Aussies heading overseas.

“In addition to the introduction of a new and unfamiliar carbon tax, there are also concerns about the increase in the Passenger Movement Charge and the continued high Australian dollar and their impact on Australian tourism pricing competitiveness,” Powell said.

“This week hotels are also introducing across the board wage increases in line with the recent Fair Work Australia decision for a 2.9 per cent increase in Award pay rates.

“All of these factors are putting upward pressure on the cost of travel and accommodation in Australia.

“It is critical that Government get the settings right to ensure our industry can compete with other destinations.

“Our members are concerned that the impact of the carbon tax on pricing will see more Australians travel offshore and international travellers finding more attractive offers from our competitors.”

The Accommodation Association of Australia’s (AAA) Chief Executive Officer Richard Munro said his members were also concerned about the effects of the carbon tax on visitor numbers and room nights.

“This marks the unfortunate start of higher prices for a range of services, and the accommodation and tourism industry will no doubt feel this impact,” he said.

“Although it is up to individual operators to determine their own rates, we are likely to see increases in room rates as a result of the carbon tax because the costs to accommodation operators to run their businesses will increase. This is particularly due to hikes in the cost of electricity prices.

“Suppliers to the accommodation industry, of which there are many, may also pass on their increased costs, which the Association estimates to be up to 3 per cent higher following the introduction of the carbon tax.

“The Association is disappointed that this new tax will have such a negative impact on customers. For several years already, the accommodation industry has introduced significant measures to counter emissions, including air conditioning controls, recycling, low-voltage lights, energy saving key card room controllers and widespread annual participation in Earth Hour to name a few.

“Although there are government payments to consumers to offset the impact of the tax, not every Australian is eligible for these.

“We are concerned that paying even more taxes will be a disincentive to travel and holiday within Australia, which is counterproductive to stimulating our local economy and encouraging the support of our domestic accommodation and tourism industry,” Munro said.

James Wilkinson

Editor-In-Chief, Hotel Management