Hotels cop it under Council plan

Queenstown Lakes District Council’s (QLDC) proposal to recover costs associated with visitors will unfairly penalise the commercial accommodation sector, especially hotels, says Tourism Industry Association New Zealand (TIA) Sector Manager – Hotels, Rachael Shadbolt.   

“While TIA is not opposed to the use of targeted rates if they are re-invested into the visitor industry, the hotels will bear the brunt of this QLDC proposal,” says Ms Shadbolt.  

Most hotels are likely to see an average rates increase of nearly 12% on already significant rates bills.

According to TIA calculations, a 250 room hotel will see an increase in its rates bill of about $25,000, while an 85 room hotel will see an increase in its rates bill of approximately $15,000.         

Motels and bed and breakfast establishments will not be spared, with increases of about 10%.

TIA Queenstown Regional Chair – Hotels Penny Clark says hotels have a stark choice of either having to pass on the increased cost to customers or reduce services.   

“In targeting hotels, the council does not seem to realise that visitors spend just a small portion of their money on accommodation.  They spend much more in local cafes, shops, restaurants, supermarkets, petrol stations and on outdoor activities in the region”, says Ms Clark.  In the year ended 2010, visitors, both domestic and international, spent $700 million in the wider Queenstown-Wanaka area. 

Meanwhile, owners of many apartments and holiday homes that are rented out to visitors will not pay commercial rates under this plan.  Such properties are active in the visitor industry, but because of council reluctance to target them, they are essentially ‘free-riders’ who don’t pay their way. 

In light of the impact of the council proposals on commercial accommodation, TIA is calling on the QLDC to reconsider its plans with a fairer apportioning of rates across all businesses.   

Click here to read TIA’s submission to QLDC. 

About Queenstown Hotels 

The 20 TIA member hotels in Queenstown:

• Operate 2794 rooms
• Employ over 1800 staff
• Had a combined capital value of almost $602 million
• Generated revenues of over $108 million in 2011
• Accrued almost 75% of total operating expenditure back into the local economy ($63 million in 2011)
• Paid over $1.7 million in rates in 2011
• And invested almost $4.4 million in sales and marketing initiatives for their hotel and the region in 2011.