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Cairns mulling bed tax despite new state funding

The proposed Cairns Visitor Levy will hurt the city’s competitiveness, say industry bodies.

Declining market share and a need to partially offset funding from ratepayers are among the reasons cited by Cairns Regional Council for a proposed visitor levy which will be collected through accommodation bookings.

According to a ‘Sustainable Tourism funding for FNQ’ document, the Council has earmarked the implementation of a 2.5% visitor levy per room booking per night, which will aim to generate $16 million for the Council to carry out marketing activity for the region in an effort to claw back what it says is lost ground on other parts of Australia. Modelling by the Council predicts an additional $140 million in visitor revenue will come as a result of the levy.

The levy will be charged to both hotels in the Cairns Local Government Area as well as short-term rental accommodation providers such as Airbnb.

Accommodation Association CEO, Dean Long, described the logic behind the bed tax proposal as flawed, adding the levy would be a further impost on an industry already highly taxed.

“The accommodation industry already provides a significant contribution to the economy of Cairns. It contributes to public funding of tourism infrastructure through business council rates, land tax, stamp duty, payroll tax, capital gains taxes, pedestal tax and taxes on car parks.

“Ultimately the introduction of a ‘bed tax’ would simply add to the cost of staying in Cairns, compromising the competitiveness of the destination.

“A bed tax would only add more costs at a time when the industry is in the most challenging trading environment for the past 20 years,” Long added.

L-R Dean Long, AAoA and Michael Johnson, TAA

The AA boss criticised the Council for its lack of attention on the rise of unregulated short-term rentals popping up across the city, saying the increased supply was contributing little in terms of tax and employment to the Cairns community and economy.

At the same time as the matter is debated in Cairns, the Queensland government announced it has committed $27.25 million on a wider state level to assist tourism providers deal with the impact of Coronavirus and the associated falls in both domestic and international visitation.

The funding comes from significant lobbying by Tourism Accommodation Australia, with CEO Michael Johnson saying the magnitude of what businesses are facing means long-term and comprehensive support packages must be developed in order to preserve jobs during exceptionally difficult times. Johnson was speaking in Cairns, where he met with local General Managers for a market update.

“With vacancy levels at critical lows, revenue per available room tracking at half of 2019 levels and no end on the horizon with respect to the coronavirus outbreak, it is apparent additional Government support will be required to protect jobs and keep the accommodation industry afloat.”

“In the Cairns visitor economy alone, it’s estimated approximately $300 million will leave the local economy in just the first quarter of 2020, which translates into around 2000 jobs which could be lost.”

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