Tuesday, 7th March, 2017

Targeting Auckland’s accommodation sector with a tax designed to raise $28 million to cover tourism and event promotion creates more problems than it solves and will backfire on Auckland.

Auckland Chamber of Commerce head, Michael Barnett, said the proposed targeted rate that around 300 hotels, motels, backpacker's and camping grounds would have to pay was anti-business and failed against numerous tests:

  • City hotel and motel rates will increase on average by 150 per cent with some facing hikes of more than 250 percent the industry has advised – a complete failure of the Mayoral promise to keep Auckland rate increases to 2.5 per cent;
  • Council is thinking only of the good times. What the situation will be in say 10 years from now is an unknown – “You don’t build a church because you’re full on Easter Sunday.”
  • Hotels and motels can decide whether to carry the cost or pass it on – that will be hugely unfair on the many hotel and motel guests who are not ‘tourists’ visiting Auckland attractions or major events – they are here for other reasons, especially business. They will look to stay in places not adding a tourism tax.
  • Accommodation accounts for just 10 per cent of Auckland’s $7500 million revenue from tourism last year yet is being asked to pay 100 per cent of the cost – Retail generated 30 per cent, cafes and restaurants 17 per cent transport 16 per cent and tourism activities 13 per cent.
  • Tourists already bring in billions of dollars equivalent to 17% of Auckland’s GDP – it is stupid to hit them with an explicit tax for visiting the city
  • For domestic tourists, Auckland’s brand is of a city that is hard to get around in – a tourism tax will add another negative to visiting the city.

Instead of taxing an Auckland success story, council’s first step should be to look inside its own organisation for the $28 million it wants to save – that’s where the Auckland story needs to get real, said Mr Barnett.

He called on Auckland Council to withdraw the proposal forthwith, before more damage is done to the Auckland brand.

For more information contact Michael Barnett, mobile: 0275 631 150.
Michael Barnett, Chief Executive, Auckland Chamber of Commerce.