Battle over proposed Queenstown 'bed tax' looms

Monday, 15 April 2019

Queenstown accommodation providers are rallying against a proposed bed tax and a council referendum they consider a farce.

Queenstown Lakes District Council mayor Jim Boult has proposed a levy of between 5 and 10 per cent on short-term accommodation to cover tourism-related costs of infrastructure.

A non-binding referendum on June 5 will test community support for the levy.

Should all companies that benefit from tourism in Queenstown contribute to a visitor levy?

Boult hopes to raise between $25 and $40 million each year but full details of how it will be administered are yet to be released.

**READ MORE:

A sizeable bed tax could lead to a downturn for the wider tourism sector, providers says.

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Lakes District Tax Equity Group organiser Nik Kiddle calls on accommodation providers to fight a proposed bed tax.

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Accommodation providers, including high-end hotel operators, backpackers and motels, are concerned the tax will hurt their businesses as well as the wider tourism industry.

Lakes District Tax Equity Group organiser Nik Kiddle told about 30 providers on Monday the tax was grossly unfair and inequitable, and the referendum was a 'farce'.

'This referendum is going to deliver an overwhelming result in favour of the visitor levy, as long as most people voting for it don't think they're going to have to pay.'

The council's suggestion accommodation providers could pass on the charge was 'misleading and naive'.

The increased tariffs would have to be advertised, administration would be expensive and it could put people off visiting the town or push them to nearby towns like Cromwell for their overnight stay.

Imperium Group manager James Cavanagh, who includes the exclusive Eichardts and The Spire hotels in his offerings, said New Zealand was an expensive place to visit.

'Queenstown is even more expensive. If all accommodation providers put the price up again then it becomes prohibitive and puts more barriers in place for people coming here.'

Providers said they were also fighting increased wages and working visa administration costs.

Kiddle said the council had not consulted with the industry on the proposal and had declined a request for background reports and records. That decision was appealed to the Ombudsman.

The council had not put forward alternatives to be considered, he said.

It would be preferable that a percentage of the $437 million in GST generated in the district in the year to February was used for infrastructure, Kiddle said. The idea was supported by Tourism Industry Aotearoa.

Other options included a targeted rate or visitor levy across all businesses that benefited from tourism, including retail, activities, food and beverage, transport and accommodation. Such a tax would be much smaller and less obvious to visitors than a bed tax.

A sizeable bed tax could lead to a downturn for the wider tourism sector, providers said.

Adventure Hostels New Zealand managing director Brett Duncan said it could also lead to a reduced number of available tourism workers if backpackers did not want to pay the increased cost of accommodation.

Accommodation providers make up about 14 per cent of the tourism sector in Queenstown.

Peer-to-peer accommodation providers would also be included in the proposed bed tax and that has been welcomed by the largest provider, Airbnb, which has taken a different view to other accommodation providers.

'Airbnb has long argued that broad-based tourism levies are a fairer and better way to raise more revenue from tourism,' Australia and New Zealand manager Sam McDonagh said at the time it was announced.

On Monday, the Queenstown accommodation providers agreed the Lakes District Tax Equity Group, which has 128 members, should start collecting a donation from members for a 'fighting fund'.

The group is holding a meeting in Wanaka on Wednesday.

A council spokesman said more information on the proposal would be distributed with the council's monthly newsletter, Scuttlebutt, which would be distributed over Easter.

Full details would be included with referendum voting papers, which would start arriving in mailboxes May 14.