Auckland Mayor Goff's 'bed tax' passes 10-7

Thursday, 1 June 2017

Auckland Mayor Phil Goff's controversial 'bed tax' is likely to be passed.

A controversial 'bed tax' will go ahead, with Auckland Council's Governing Body voting 10-7 in favour of the proposal on Thursday afternoon.

The targeted accommodation rate will see hotels and motels charged extra to partially offset the cost of staging major events in the city.

Tourism Industry Aotearoa chief executive Chris Roberts has slammed the decision.

It will see nightly room rates bumped up between $3-$6 for hotels and $1-$3 for motels.

The targeted rate is part of Auckland Mayor Phil Goff's first budget, the 2017/2018 Annual Plan.

**READ MORE:

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* Hoteliers cry foul over proposed rate**

Goff said it would free up $13.5 million of ratepayer funding which could be used to bolster transport and infrastructure.

He has previously said hotels and motels could pass on the cost to tourists as a surcharge.

Auckland Council's Governing Body usually has 21 voting members including the Mayor who also has an additional casting vote.

But councillors Penny Hulse and Linda Cooper, who are involved with commercial accommodation organisations, recused themselves from all bed tax voting.

Goff hailed the vote as a win for Auckland.

'With the targeted rate on accommodation we are asking accommodation providers to meet half of the cost of tourism marketing and events which previously fell totally on Auckland ratepayers,' he said.

'It's only fair that those who benefit directly from events that promote tourism share in that cost.'

Tourism Industry Aotearoa (TIA) and Hospitality New Zealand slammed the decision, labelling it 'extremely disappointing' and unfair.

TIA chief executive Chris Roberts said it was based on bad information and a poor understanding of the workings of the visitor economy.

'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.'

He said it could be a 'considerable time' before accommodation providers knew how much they would have to pay.

Roberts said he 'didn't actually know how many hotels and motels have been affected', but said it would be fewer than 300.

He expected each one would experience a different outcome.

Accommodation providers would be able to apply to the council for a rates remission, taking into account any forward bookings they might have, but there would be no guarantee, he said.

Hospitality New Zealand chief executive Vicki Lee said the rate would have a 'devastating' impact on Auckland's commercial accommodation sector.

'An unbudgeted cost increase of this magnitude would create serious challenges for any business, and Auckland's motels and hotels are no exception.'

Goff's budget also includes 'living wage' minimums for all council staff and an annual 2.5 per cent residential rate increase.

The decisions will be adopted by the Governing Body on June 29.