Home' Hospitality Business : HB APL 2017 Contents Auckland Council’s proposed $28
million targeted rate on commercial
accommodation will have massive
unintended consequences for the city
and must be dropped, Tourism Industry
TIA has made a comprehensive
submission to the council, saying the
proposed rate unfairly targets just
one sector that makes up less than 10
percent of Auckland’s visitor economy.
“The facts are very clear and these
have been presented to the council,”
says TIA Chief Executive Chris
Roberts. “This targeted rate would be
a disaster for Auckland and must be withdrawn.”
Visitors to Auckland spend $7.5 billion a year across a diverse
range of services, including retail, hospitality, transport and activities.
The commercial accommodation sector receives only nine percent of
that spend but is being asked to pay 100 percent of the targeted rate.
“The commercial accommodation sector is willing to pay its fair
share. We want to work with the council to find an equitable and
sustainable way for the sector to make an appropriate contribution
to visitor promotion activities provided through the council’s
economic development agency, ATEED,” Mr Roberts says.
“All Aucklanders benefit directly or indirectly from the
economic value visitors bring to the city. They also get a social
return. Many of the events supported by ATEED are mainly
enjoyed by locals. These include the Lantern Festival, Pasifika,
Diwali, the Waka Festival, Santa Parade and Pride Parade, which
contribute to the social fabric of the city but result in very little
increase in demand for commercial accommodation.
“The new rate is not a bed tax or visitor levy. It is a massive rate
increase based on capital value to be paid by the building owner,
irrespective of the number of guests in each property.
“The Council continues to insist that the rate can easily be
recovered by accommodation providers adding $6 to $10 to
the daily bill. This is quite simply wrong. The complexity of the
ownership arrangements in the commercial accommodation
sector has been ignored. These include property developers,
building owners, hotel management contracts and franchise
arrangements. Often the party paying the rates bill is one or
two stages removed from the provider of the guest services. “In
heaping $27.8 million a year in additional charges on commercial
accommodation providers, the council is also failing to recognise
the wider contribution this sector makes to Auckland through
employment, sponsorship, community support and marketing.”
“The building owners include hundreds of ‘mum and dad’
investors, who have invested in strata title properties. Contractual
arrangements mean they must pay any rate increase and cannot
pass it on to the accommodation operator,” Mr Roberts says.
Additionally, only a quarter of Auckland’s visitors stay in
commercial accommodation, with the majority of visitors staying
with family and friends, or in other paid accommodation like Airbnb.
“The Council wants all visitors to Auckland to pay up, but three-
quarters of them are being missed entirely in this proposal,” Mr
The proposed rate risks seriously damaging Auckland’s
economy, with a number of hotel owners and developers
reviewing their commitments to the city.
“Both the Auckland Council and the Government have identified
the need for new hotel developments in Auckland to keep pace with
population and tourism growth. Half a dozen hotels are planned,
but this is nowhere near enough. An estimated 4300 more rooms
are needed by 2025. The targeted rate would immediately wipe
$400-$450m off the value of existing accommodation assets and
threaten the feasibility of new projects.
TIA urges Auckland Council
to drop targeted tax
New Apartment Hotel For Manukau To Open 2017
New Zealand’s largest hotel operator,
AccorHotels, has announced that its
apartment hotel brand – The Sebel will
expand with the opening of a new-build
hotel in Manukau, Auckland in 2017.
Currently under construction, the
4.5 star apartment-style hotel – The
Sebel Auckland Manukau - will have
152 rooms over six floors and house
a café/restaurant, conference space,
gymnasium and car parking. It is
located in the centre of the commercial
district of Manukau, home to New
Zealand’s largest theme park, Rainbows
End, Westfield Manukau City and nearby
Vector Wero Whitewater Park, New
Zealand’s first ever man-made river and
white water course.
“This is a strategic and exciting new
development for Auckland, and we
are delighted to be partnering with
developers Rayland Enterprises to
provide high quality, international
standard accommodation for south
Auckland, ” said Chief Operating Officer
AccorHotels Pacific, Simon McGrath,
The Sebel is an apartment and hotel
brand offering guests a greater level of
independence and control at more than
25 addresses across Australia and
The new Sebel Auckland Manukau
address will be the fourth hotel to
operate under The Sebel brand in New
Zealand, complementing its hotels -The
Sebel Quay West Auckland, The Sebel
Auckland Viaduct Harbour and new-
build The Sebel Wellington Lower Hutt,
scheduled to open in 2019.
KEY TOURISM FACTS
• Tourism in New Zealand is a $95 million per day industry.
Tourism delivers around $40 million in foreign exchange to the
New Zealand economy each day of the year. Domestic tourism
contributes another $55 million in economic activity every day.
• Tourism is New Zealand’s biggest export earner,
contributing $14.5 billion or 20.7% of New Zealand’s
foreign exchange earnings (year ended March 2016).
• 13.2% of the total number of people employed in New
Zealand work directly or indirectly in tourism. That means
332,322 people are working in the visitor economy.
• The Tourism 2025 growth framework has a goal of growing
total tourism revenue to $41 billion a year by 2025.
CEO of Tourism
6 | April 2017 | Hospitality BUSINESS
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