A month-long consultation period on Auckland Mayor Phil Goff’s proposal for an accommodation targeted rate opened this week.
Over the next month submissions are expected on the measure which would see a targeted rate based on capital value applied to hotels, motels and B&Bs from 1 July.
A council report on the move suggested that the accommodation sector would pass the cost on to visitors by adding a circa 4% surcharge to guest bills.
However the move has been slammed by industry representatives including Hospitality New Zealand which says it is unfair that only accommodation is being targeted given the wide reach of the tourism dollar.
It also suggests it is unrealistic to expect that the increase can be passed on to the visitor when prices are contracted in for up to three years in advance for accommodation for some group bookings.
The Auckland Chamber of Commerce has also waded into the debate pointing out that imposing a rate increase will stymie investment and development in the sector.
It cites an average 150% increase to city hotel and motel rates, with some facing hikes of more than 250%.
This means that if a hotel or motel operator is paying $1m in rates now, it will increase to $2.6m assuming that the hotel’s capital value doesn’t also increase.
Auckland Chamber of Commerce head, Michael Barnett, said: “Charging in and slamming a targeted rate on the accommodation sector is no way to encourage the sector to build more bed space for tourists; surely, the council can see that.”
Goff mooted a visitor levy late last year as part of a plan to raise up to $30m annually to replace ratepayer funding currently spend by council bodies on attracting visitors and supporting major events.
At the time he said: “We are taking a responsible fiscal approach by ensuring that Auckland Council is more efficient and delivers value for money while finding innovative ways to raise extra revenue to support growth.
“Accommodation providers and other businesses benefit most directly from the funding the council puts into attracting visitors to the city and supporting major events. That is why I am proposing a new visitor levy to be collected by hotels, motels and B&Bs to replace ratepayer spending by ATEED in this area.”