If you are an accommodation provider in Auckland you are likely aware of Auckland Council's proposed targeted rate to be introduced as part of its 2017/2018 Annual Plan. Hospitality NZ have been very vocal on this issue and have taken a strong stance to voice concerns at inequality of this targeted rate on only one sector (accommodation).
If the Council is successful in introducing this targeted rate, this will significantly impact the Auckland accommodation sector and it could have wider national implications. Progress on our advocacy efforts can be viewed here as well as regular updates sent directly to our commercial accommodation members.
What does this actually mean?
Initial figures prepared by the Auckland Council suggest a targeted rate on a particular accommodation type in Auckland would be around:
- Large CBD Hotel - $860,000 per annum
- Suburban Motel - $34,000 per annum
- Backpackers - $50,000 per annum
- Holiday Parks - $69,000 per annum
Source: Auckland Council Annual Plan Discussion Document.
This is over and above the general rates a business already pays. We don't agree with the introduction of a targeted rate and consider a far better approach would be a national discussion about a nation wide visitor levy/tax.
What have we been up to?
Since this proposed targeted rate came to light, Troy Clarry, Auckland Accommodation Sector Group Chair and Rachael Shadbolt, GM Accommodation have been involved in meetings with the Auckland Council about the proposed targeted rate and are part of a Steering Group on this issue. Throughout these meetings we have stressed the inequity of the proposal, the potential risk to business profitability and sustainability and have urged the Council to reconsider its position.
On 20 February Hospitality NZ CEO Vicki Lee, General Manager Rachael Shadbolt, Advocacy Manager Dylan Firth and Auckland based regional management team members presented to the Auckland Accommodation Sector Group to discuss the proposal, the potential impact the targeted rate might have on businesses and how the accommodation sector can have it's say as part of the Council's Annual Plan consultation process.
Hospitality NZ CEO Vicki Lee written to all the Auckland Ward Councillors, outlining our concerns. Each Ward Councillor was provided with a list of our members' businesses, current general rates information and the amount the proposed targeted rate represents for each member. A number of Councillors have since made contact and we will continue to talk to them about this issue.
We have voiced our concerns in various Auckland media forums - including local community papers, starting with the latest article at the top.
Inside Tourism Column - Auckland Targeted Rate: an inelegant proposal based on convenience
Airbnb: open to bed tax here, already collecting in Europe, USA
Phil Goff: Bed tax should pay for Auckland's promotion
If you are an Auckland commercial accommodation provider:
Following Vicki's letters to all Ward Councillors, this now presents an excellent opportunity to contact your local Councillor and continue that discussion.
Don't be shy, they are there to gauge the mood of their electorate and they need to know what this really means for people - if it is going to mean the end to future development or refurbishment or, worse still, mean a business is simply no longer profitable - they absolutely need to know.
Your voice being heard
It is our view that Auckland Council does not have a clear understanding of how commercial accommodation in the city is owned or leased or even how room rates are set and contracted. They are of the view that the targeted rate can just be absorbed by the commercial accommodation business or passed on to the guest at check-out, which we know is not true. We need to ensure that as many people as possible, not just the Associations, make a submission and tell them what is wrong with their proposal.
to go to the Annual Plan consultation page for more information and to read the consultation document.
The Association will put their submission to the Auckland Council on 27 March 2017. When ready, members will be notified of our submission it will be made available for public viewing here