Auckland Council rates plan could push up visitor accommodation prices.
Auckland commercial accommodation providers are crying foul over a new targeted council rate that would push up room prices.
An Auckland Council report on the proposal suggests the accommodation sector add a 4 per cent surcharge to guest bills to cover the new rate that would apply from July 1.
Hospitality New Zealand accommodation spokesperson Rachael Shadbolt said the industry would fight council proposals to make the sector help pay for up to $30m spent annually on Auckland tourism promotion and major events.
"[It] takes a very blunt and narrow view of who actually benefits from tourism … Given the reach of the tourism dollar into so many sectors of the Auckland economy it is unfair that only hotels, motels, apartments, backpackers and the likes, are being targeted".
Late last year Auckland mayor Phil Goff mooted the idea of a visitor levy for the super city, but the council can't legally impose a bed tax, so it is going for a targeted rate based on capital value.
Shadbolt said the focus should be on a national visitor tax or levy, rather than individual councils raising funds through a targeted rate
It would add $800,000-plus to annual rates for a large city hotel.
Suburban motels, back packer lodges and holiday parks would see anything from $34,000 to $70,000 a year added to their existing rates bills from July 1 if the proposal in the annual plan was adopted.
"The impact is just as significant, if not more so, on the little guys.
"I don't think they understood the enormity of the situation until we put the figures in front of them [at a meeting on Monday]".
Whangaparaoa Lodge owner Troy Clarry said he was shocked when he realised his total rates bill would jump from $14,000 to $42,000.
A council report on the rating proposal said property valuations might need to be adjusted to remove areas not used for accommodation, such as bars, restaurants and conference facilities.
Clarry said that would make it complicated to administer. "They'd have to view where we live, and measure it up".
The report said that even if Auckland accommodation providers had to contend with a government bed tax on top of the targeted rate, prices would only rise 6 per cent on average and this would not have a significant impact on visitor numbers.
But Clarry said visitors were price sensitive and could decide to use Airbnb or holiday homes which would not have to pay the targeted rate.
The council report said it would be too difficult and costly to identify those properties and inspect them for rates apportionment.
General manager of the 340-room Pullman Hotel Rob MacIntyre said his targeted rates bill would be $800,000 on top of a general rate of a similar amount. "It's a significant hit".
He said hotels regularly signed contracts two or three years in advance to provide accommodation for tour groups and air crew, and they could not raise charges to cover the council's targeted rate.
"The only way the price can change is if it's a government tax - if GST went up, we could pass that on".
Hotels were becoming profitable again and needed to invest in refurbishment and improving staff pay, MacIntyre said.
"What's ironic is that the mayor is trying to introduce the living wage, but he's taking that opportunity away from hospitality workers.
"The implications of that sort of cost on our bottom line that we can't really recoup is hugely significant".
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