The accommodation industry has expressed its disappointment with the Supreme Court ruling that the Auckland Council’s Accommodation Provider Targeted Rate (APTR) funding for tourism is valid.
The contentious hotel bed tax was introduced in 2017 by the Auckland Council to boost tourism funding and has now been given the green light after being suspended in 2020 due to the impact of the COVID-19 pandemic on the hospitality economy.
Hospitality New Zealand’s Accommodation Association Lead & Sector Chair, Troy Clarry, says the decision to overturn the Court of Appeal ruling will have long-term implications for operators; not only for Auckland but probably throughout New Zealand.
“The APTR, as proposed by the council, is unfair, inappropriate and simply does not work – Covid-19 proved that beyond all doubt.
“It did not work as intended and now Auckland has no funding for marketing and events, inevitably affecting New Zealand’s ability to attract major events going forward. But this ruling is the end of the matter and we now need to move forward.
“We pleaded with other local councils around New Zealand to work with the industry on models similar to the fairer funding model for destination marketing that has worked on with Tataki Auckland Unlimited and the wider tourism sector since the Court of Appeal ruling 18 months back.
“This is well advanced and covers the wider industry on a much fairer basis, and we ask other councils to look at what is being done and work with local tourism operators on similar models.
“At the same time we also ask the Government to work with us to develop a centralized funding model.
“This is urgent – not just for the industry but also for the benefits tourism can provide to the whole economy – GtDP, tax take, GST, branding etc.
“We still have a concern around targeted rates in general, and our concern with this ruling is that councils around New Zealand will now be tempted to implement targeted rates, not just for tourism but for other sectors going forward.
“So, we urge councils to work with the sector to find alternative fair, reasonable, and nationally endorsed funding models for tourism.
“Ultimately, we want to solve the funding for tourism problems, and this needs central government involvement.
“The hospitality and accommodation sector has always been willing to work with councils and the government, and we think this is the perfect time to do that. But it needs to be done quickly because we’re already falling behind competitively in international tourism and our ability to attract travelers from abroad.”
The Supreme Court ruling, released on May 12 determined that the APTR was reasonable and complied with the legislation in the Local Government Act 2002.