Industry VoicesManagementTourism

Mayor’s accusations prompt “incredulity” from hospitality body

Hospitality NZ has censured Queenstown mayor Jim Boult after he accused the accommodation sector of spreading misinformation ahead of a community vote on a proposed new bed tax.

Mr Boult sent out an open letter last week saying: “I have grown increasingly concerned about the commentary emerging from parts of the local accommodation sector regarding the proposed visitor levy on which we will all be asked to vote in June.

“I am concerned because much of this commentary is based on assumption, and perhaps even in some cases, deliberate misinformation.”

Opponents of the Queenstown Lakes District Council (QLDC) plan, led by Villa Del Lago Hotel operator Nik Kiddle, say it lacks clarity and argue a blanket tax on local accommodation unfairly targets one sector of the tourism industry to fund initiatives which will benefit the entire community.

Kiddle’s Tax Equity Group, comprising 128 businesses, has been holding meetings across Wanaka and Queenstown to discuss the council’s plan with locals and put forward alternatives.

In his letter, the mayor attempts to address those alternatives and explain why the bed tax is councils preferred option, arguing it targets visitors, not accommodation providers, and is not anticipated to “have a significant effect on the majority of people choosing to visit and stay in the district”.

But Julie White, chief operating officer of representative body Hospitality NZ, said: “We’ve read QLDC mayor Jim Boult’s open letter of 18 April with a mix of concern and incredulity.

“It is interesting that mayor Boult has signed off his letter with a plea for all concerned parties to ‘stick to the facts’ having admitted in his opening statement of the letter that ‘I accept that council has not been able to provide detailed information to date’.

“The difficulty in doing so, is not a viable excuse for not coming up with a long-term and sustainable solution for funding for the QLDC area.

“QLDC’s residents and business owners are within their rights to continue to demand greater clarity from local government on what it is they are being asked to cast their vote on, especially since Boult’s letter seems to imply (rather concerningly) that he intends to forge ahead with his proposed visitor levy regardless of the feedback received by his constituents.”

In his letter, the mayor says the levy equates to between $12.50 – $25 on a $250 per night hotel, or “less than the cost of a couple of drinks in many hotel restaurants and bars”.

He continues: “At a $40-per-night backpackers it’s only $2 – $4 per night. I doubt anyone could call that a ‘sizeable’ levy that prefaces a wider tourism sector downturn as some have suggested.”

Ms White argues accommodation providers will inevitably be forced to absorb the levy by charging lower rates.

“Boult gives the example of a $250-a-night room as an upper level of the accommodation sector (showing his limited knowledge of the full range of the sector in his area), arguing that a visitor levy of five to ten percent would only be an additional $12.50-$25.00,” she said.

“Under Boult’s plan, if a guest stays in that same $250 room for four nights, they will find themselves paying up to $100 extra for their stay.

“While Boult insists that the visitor levy can be simply and cleanly passed on to guests, accommodation providers will no doubt find themselves forced to take a price reduction and absorb the levy by offering a lower rate.

“It is a fact that owners cannot pass the cost of the levy on completely, and that it will come at the cost of the owner.”

The council’s 2018-2028 Ten-Year Plan identifies the scale of tourism investment needed within the district equates to $1 billion over the decade.

Mayor Boult says the bed tax can deliver the funds necessary to sustain the sector but without it, tourism  across Aotearoa will be put at risk by Queenstown’s diminished appeal.

“I am not prepared to burden our ratepayers with those costs to support the visitor industry, no matter how important it is to New Zealand,” he said.

“It’s important that a discussion within the community sticks with the facts and that above all our community makes its voice heard.”

Julie White acknowledges there is an “infrastructure funding issue” in QLDC, saying Hospitality NZ is “prepared” to contribute to finding a solution.

“But, is everyone prepared to contribute? If you or your business stand to benefit from funding to infrastructure, it is fair and reasonable to expect you to contribute fairly towards it?” she said.

“If the council’s proposed visitor levy goes ahead, the real winners will not be either QLDC’s tourists or residents, but tourism businesses in QLDC’s neighbouring districts who will no doubt welcome an influx of visitors not willing to pay over the odds for a night in Queenstown.”

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Kate Jackson

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

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One Comment

  1. From Rayma Jenkins, President of the Bed and Breakfast Association New Zealand

    “The Butcher, the Baker and the Candlestick Maker”–The story of how everyone benefits from Tourism.
    As Accommodation providers we need to reinforce the story that all of the New Zealand economy benefits from Tourism – besides the obvious: cafes, restaurants, tour operators, supermarkets and petrol stations.
    As business owners accommodation providers have obligations for which we need professional advice so we employ; insurance brokers, accountants, H&S advisors and lawyers to name a few.
    Our Government has many employed at MBIE and of course we have those in TIA and various I-sites, and Councils have employees focussing on the tourism products they oversee.
    Our Universities have Tourism departments employing professionals and researchers.
    And then there are the providers of the supplies the visitors consume. The products of our agricultural industry: eggs, meat, fruit, wine and dairy products.
    Even those in the construction industry, whether it be new builds, renovations or repairs, benefit from the industry.
    It is very difficult to think of employment options that do not in some way profit from the tourist dollar and if not directly certainly through the distribution of the money from GST and other taxes.
    TIA’s Sprint working group have come to the conclusion that apportioning part of the GST collected directly from Tourists be distributed to the councils needing to improve infrastructure. So let us re-inforce this by telling the story of how widely the economy is supported by tourism. Distributing a portion of GST is undoubtedly the most fair and equitable. Targeting Accommodation is not.

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