Tuesday, 28th February, 2017
Hotels currently under refurbishment and new hotels that will soon open to cater for the 1- in 10 year Lions Rugby tour later this year are faced with massive cost increases long-term because of Mayor Phil Goff’s accommodation targeted rate proposal, notes Auckland Chamber of Commerce head, Michael Barnett.
This is because the targeted rate Auckland Council is proposing will increase city hotel and motel rates on average by 150 per cent with some facing hikes of more than 250 percent the industry has advised.
“In setting an accommodation targeted rate, the 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.”
Council proposes that the accommodation targeted rate will be calculated by a hotel or motel’s capital value – the same way other rates are. The industry advise that this means that if a hotel or motel operator is paying $1 million in rates now, it will increase to $2.6 million assuming that the hotel’s capital value doesn’t also increase.
The fact that tourists had to be put up at a marae because of the hotel and motel accommodation shortage is bad enough.
“But 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,” said Mr Barnett.