Auckland hotel tax 'unfairly targeted'

  • 03/06/2017
Novotel Auckland Airport
The Novotel Hotel at Auckland Airport (Facebook)

The Tainui iwi has come out against Auckland's bed tax, saying new hotel developments and jobs are at risk because of it.

A proposed tax on hotels to fund Auckland's tourism promotion was narrowly voted through by the super city's councillors on Thursday.

Tainui received $170 million of Treaty of Waitangi settlement money 20 years ago and has used it to build a portfolio of investments, including hotels, that now tops $1.2 billion in value.

Tainui Group Holdings has a joint venture with Auckland International Airport Ltd which opened Auckland Novotel Auckland Airport Hotel in 2011 and plans to build a second hotel under the Pullman brand.

TGH chairman Sir Henry van der Heyden said construction and operational costs were already on the rise and the bed tax was another burden.

"On TGH's current and committed hotel developments in Auckland the bottom line impact will be around $10 per room per night across the stock of approximately 500 rooms, which quickly adds up and is certainly not all recoverable from hotel guests," he said.

Goff 'certain' cost can be passed to visitors

Auckland Mayor Phil Goff says he is "absolutely certain" businesses can pass on the tax in the same way they pass on any other business cost.

The hospitality industry has mentioned the possibility of taking the issue to court, but Mr Goff says the industry must pay its fair share. 

"I've had very clear legal advice… and I believe that we're on very firm ground," he told The Nation.

"It's up to the industry as to whether they now want to spend money on legal fees and put Auckland ratepayers to the expense of legal fees.

"This is about a fair sharing of the burden of promoting their industry, and they need to think about the community and the reaction to this."

"Don't expect the ratepayer to meet the full burden of promoting your industry, from which you benefit."

Rahui Papa, chairman of Waikato-Tainui executive committee Te Arataura, said the new rate flies in the face of Auckland's Council's own findings that the city needs some 4300 additional rooms by 2025 to support tourism development.

"This unfairly targeted new rate is no way to encourage new investment in hotel infrastructure such as our recently announced joint development between TGH and Auckland Airport," said Mr Papa.

He asked why should the hotel sector pick up the tab when only a quarter of visitors to Auckland stayed in paid accommodation.

Hoteliers would be forced to recover the additional cost by making reductions in other areas, he said.

"Jobs make up 30 percent of operating costs in the accommodation sector, so it is reasonable to expect that reductions in hours and shifts will be an obvious targeted area with a direct impact on workers and consequently their spending in Auckland's economy," said Mr Papa.

NZN / Newshub.