Bernard Orsman is Super City reporter for the NZ Herald.

Goff accuses hotels of exploiting Masters Games

Auckland Mayor Phil Goff says the hotel industry is being disingenuous about his bed tax. Photo / Dean Purcell
Auckland Mayor Phil Goff says the hotel industry is being disingenuous about his bed tax. Photo / Dean Purcell

Auckland Mayor Phil Goff says the hotel industry is being disingenuous about his bed levy by exploiting events like the Masters Games to hike room rates.

Goff has gone on the offensive with a new version of his proposed targeted rate for hotels and other accommodation providers, which has been toned down to appease industry and political concerns.

Under the latest version, hotels will pay more than motels and lodges and the targeted rate is expected to collect $15 million to $18 million, rather than the original $27.8 million.

In an exclusive interview with the Weekend Herald, Goff said hotels are the best "proxy" to pay the levy to fund spending by Auckland Council's Auckland Tourism, Events and Economic Development(Ateed) to attract visitors and support major events.

He said the hotel industry wanted council to broaden the levy on to restaurants and taxis, of which 75 per cent of their customers were Aucklanders, compared to 90 to 95 per cent of hotel bed nights coming from visitors to the city.

"When people come for the Masters Games the restaurants don't put their rates up by 50, 70, 80 per cent, but the hotels and motels do. They get the benefit and they push their costs up and they best reflect the visitor element component," Goff said.

"The huge benefit from the Masters Games was 244,000 bed nights... worth $30 million to the city."

Goff said 75 per cent of public feedback on the original proposal supported the targeted rate.

A Weekend Herald investigation last month revealed New Zealand-bound Lions fans are facing huge surges in accommodation prices, including The Quadrant in Auckland CBD charging $1125 on the night of the first test, more than three times its room rate the following week.

Goff said he had listened to arguments from the hotel sector and made changes, such as taking local events like Diwali and the Lantern Festival outside the levy and giving a 35 per cent discount in the first year for forward, contracted bookings for the likes of airline crew.

"Basically what the industry is coming back and saying is 'we don't want to contribute anything to that cost even though we are a major beneficiary'," said Goff.

Speaking from Melbourne last night, Tourism Industry Association chief executive Chris Roberts said the industry was happy to pay a fair share of Ateed's costs, but it was unfair being asked to make a 100 per cent contribution when it benefits from 9 per cent of the tourism spend.

He said claims by Goff that the industry benefited from the Masters Games were false.

The hotel occupancy rates for April when the Games were held was 88 per cent, the same as April last year.

Roberts said Goff's revision only succeeded in making the original poorly designed proposal make even less sense.

Under the latest revision, holiday parks, backpackers and hostels will be excluded. So will accommodation providers in the Rodney, Waitakere Ranges, Great Barrier Island, Papakura and Franklin local board areas because they generally do not benefit from major events.

Hotels will pay more than motels and lodges and two zones have been created with different rates.

The latest proposal is expected to result in the targeted rate collecting $15 million to $18 million, compared to $27.8 million under the original proposal.

Said Roberts: "A backpackers in Queen St won't pay the rate but the hotel next door will. There is no logic behind that."

The revised proposal would strengthen a legal case if the targeted rate, which is on property owners not hotel operators, is passed, Roberts said.

Hospitality New Zealand accommodation general manager Rachael Shadbolt said the revised proposal was proof that what the council thought was simply an easy fix to fund Ateed is actually a much more complex discussion.

She also said it was more unfair than the original proposal​.

"Hotels and motels remain in the revised proposal while backpackers and campgrounds are now likely to be exempt. It's all very confusing and done with no consultation with the commercial accommodation sector, which is really disappointing," she said.

- NZ Herald

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