Monday , October 15 2018

Queenstown bed tax giving operators sleepless nights

A Queenstown accommodation owner says locals fear a bed tax could ruin businesses and drive visitors away.

Nik Kiddle, the owner of the luxury waterfront apartment complex Villa del Lago, says a levy under consideration by Queenstown Lakes District Council is strongly opposed by tourism operators fearful it will raise prices and discourage overnight stays.

He has written an open letter to Queenstown mayor Jim Boult highlighting the sector’s concerns.

Mr Boult is campaigning for the targeted rate to help pay for new tourism infrastructure to support the town’s burgeoning visitor population.

The Otago skiing mecca has seen an explosion in tourist number in recent years, with guest nights up 5.7 percent in May 2018 on the previous year, to 226,130 for the month.

That growth has put local services and infrastructure under pressure while leading to a proliferation of Airbnbs throughout the region.

The bed tax would allow the local council to charge accommodation businesses, including short-let Airbnb and Bookabach properties, a targeted levy which would help pay for tourism services.

However, opponents of the tax say the cost could drive people away and damage business.

Mr Kiddle said: “The bed tax, as it’s currently proposed by the mayor, would in fact increase costs for particularly small and medium-sized accommodation service providers to an extent that would probably bankrupt us.

“People are genuinely concerned for their businesses and their livelihoods.”

The mayor has previously touted a $10 per bed per night additional cost for visitors as an option which, Mr Kiddle says, translates to hundreds of dollars extra for family groups planning to stay more than a couple of nights.

He has called on Mr Boult to abandon the bed tax proposal – a scheme which is already proving contentious in Auckland for the difficulty it presents in targeting Airbnb operators – and instead lobby for 15 percent of the GST generated by international visitors to Queenstown each year.

Queenstown Lakes District Council chief executive officer Mike Theelen said this week: “We certainly don’t want to keep adding more burden onto ratepayers to support that industry. A bed tax is a well-known, internationally-recognised tool for that.”

Hospitality New Zealand Central Otago accommodation sector group chairperson Bridgit Parker said members were hesitant about the proposal but she did not rule out a bed tax as the solution to tourism issues, saying any proposal needed rigorous discussion between all stakeholders involved.

Queenstown Chamber of Commerce chief executive officer Ann Lockhart said tourist numbers have grown to the point where finding a solution is “extremely urgent”.

The proposal will likely be tabled for further discussion once consultation on the Ardern government’s international tourist tax ends in August.

About Kate Jackson

Kate Jackson
Kate Jackson is the editor of Accomnews and Accom Management Guide. You can reach her at any time with questions or submissions: editorial@accomnews.co.nz

One comment

  1. Businesses already pay commercial rates ostensibly for the extra people they bring into the town. This commercial rate is at least twice the residential rate and brings the businesses i.e. the accommodation provider, no extra benefit or service from the council.
    Then what is the infrastructure needed? Yes the tourist may need toilets, also used throughout the year by locals. Extra benches in the parks? Also used by locals. What else? Roads and buses are needed by locals probably more than tourists. Events? Again locals benefit more.
    The bed tax imposed implemented by Auckland Council was to pay for ATEED events, again heavily and mostly patronised by Auckland ratepayers and nearby Kiwis. The bed tax has been expanded to Airbnb hosts, again supposedly for ATEED. We have seen reports of the excessive salaries, over $100k, being paid to Auckland staff. Not to mention the 50 Electric Vehicles on order at twice the cost of the petrol equivalents.
    So the Auckland formal accommodation providers are paying the commercial rate, pan tax, and bed tax. Now the Auckland Council imposed the petrol tax on top of the 6% rate increase. Where will it stop? What is the next tax to be invented to pay for the ever increasing staff payroll? Given that formal accommodation providers only receive 9% of the tourist spend, should the council be taxing the cafes a ‘coffee’ tax, the restaurants a ‘plate’ tax, the car hire companies a ‘rental’ tax, etc.

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