A bed tax in Auckland is set to go ahead following a vote in council yesterday (June 1) that saw Mayor Phil Goff’s controversial proposal approved by the majority of councillors.
The tax – which is expected to add NZD$1 and NZD$3 a night for motels and between NZD$3 and NZD$6 for hotels according to the New Zealand Herald – has been slammed by Tourism Industry Aotearoa (TIA) and Hospitality New Zealand (HNZ) who say it will have a major effect on the tourism industry.
TIA and HNZ say most, if not all, of the councillors recognised the unfairness of the proposal, but a majority still decided to vote for the measure.
TIA Chief Executive, Chris Roberts, says the targeted rate proposal “was based on bad information and a poor understanding of how the visitor economy works [and] there are also unanswered questions over whether it meets relevant legislation”.
“There is an alternative approach to the targeted rate,” he said.
“The commercial accommodation sector has repeatedly offered to work with the Council to find a fair and sustainable way to make an appropriate contribution to the city’s visitor and event promotion activities. That offer still stands.”
HNZ Chief Executive, Vicki Lee, said the targeted rate would have “a devastating impact on Auckland’s commercial accommodation sector and the wider tourism industry”.
“An un-budgeted cost increase of this magnitude would create serious challenges for any business, and Auckland’s motels and hotels are no exception,” she said.
TIA and HNZ say they will work with their affected members to decide on their next steps.
According to the New Zealand Herald, the rate is now expected to raise NZD$13.5 million, rather than the original NZD$27 million to fund spending by Auckland Tourism, Events and Economic Development (ATEED) to attract visitors and events and free up investment for transport.
“Why should the general ratepayers be landed with the bill for which the hotel industry makes hundreds of extra dollars per room per night during the events we organise on their behalf?” the New Zealand Herald reported Goff as saying.
“Why is it always dumped on the ratepayer and hasn’t the ratepayer got the right to share that burden with the direct beneficiaries?”
At this stage, it is unclear if the bed tax will be passed on to guests by hotels and HM is currently seeking comment from several hotel chains.