A bed tax is firming up as the best way of helping Queenstown cope with increasing pressure from tourists, the local mayor says, despite industry opposition.
Queenstown Photo: 123RF
Queenstown Lakes District mayor Jim Boult outlined the proposed levy in an open letter following criticism from the accommodation sector.
The district council voted unanimously to hold a non-binding referendum to test community support for a visitor tax last month.
However, members of the accommodation sector have raised concerns their businesses would bare the brunt of any tax when all types of businesses were benefiting from tourism.
Mr Boult said he was concerned about the commentary being based on assumption and potentially deliberate misinformation.
"This is our one and only chance to change the way we finance our district. Let's not waste the opportunity," he said.
"The government is finally offering our community the chance to express its support for a local visitor levy which will help fund the crucial infrastructure we need, and will take the full burden off our ratepayers. This will be a first for Aotearoa New Zealand."
The proposed levy would be a 5 percent to 10 percent charge added to the costs of short term accommodation, he said.
Lakes District Tax Equity Group organiser Nik Kiddle welcomed the release of information, saying it had been deliberately withheld before.
The group would continue to fight to have their voices heard by the government, Mr Kiddle said.
"Many accommodation businesses operate on very small margins."
His hotel Villa Del Lago operates on a 15 percent margin
"Adding a 10 percent tax on us is almost the equivalent of running the entire operation here, it's two thirds of it," Mr Kiddle said.
"It's classic smoke and mirrors to suggest that this tax is somehow not going to be paid by us, the accommodation providers, but instead by visitors."
The levy would have to be in the advertised price on the internet, Mr Kiddle said this would shock the market and dampen desire to visit the resort town.
"We have a very strong economy here, why weaken it?"
Mr Boult said without a levy, Queenstown would be left between a rock and a hard place - either increasing the burden on ratepayers or reducing investment and the visitor experience.
"We have been clear in the 2018-2028 Ten Year Plan that the scale of investment needed is three times bigger than the previous plan at nearly $1 billion over the decade," he said.
While freedom campers are off the hook with the current proposal, Mr Boult said the council was investigating how to apply the fee to freedom campers.
"The government has acknowledged that we are a unique case and they have opened the pathway to a unique solution, and it's within our power to now say whether we want it or not."
Eligible residents will receive voting papers between 14 to 19 May, before the 5 June referendum.