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Tainui disappointed at Auckland hotel tax

NZ Newswire logoNZ Newswire 2/06/2017

The Tainui tribe in Waikato has come out against Auckland's bed tax, saying new hotel developments and jobs are at risk because of it.

A proposed tax on hotels to fund Auckland's tourism promotion was narrowly voted through by the super city's councillors on Thursday.

Tainui received $170 million of Treaty of Waitangi settlement money 20 years ago and has used it to build a portfolio of investments, including hotels, that now tops $1.2 billion in value.

Tainui Group Holdings has a joint venture with Auckland International Airport Ltd which opened Auckland Novotel Auckland Airport Hotel in 2011 and plans to build a second hotel under the Pullman brand.

TGH chairman Sir Henry van der Heyden said construction and operational costs were already on the rise and the bed tax was another burden.

"On TGH's current and committed hotel developments in Auckland the bottom line impact will be around $10 per room per night across the stock of approximately 500 rooms, which quickly adds up and is certainly not all recoverable from hotel guests," he said.

Rahui Papa, chairman of Waikato-Tainui executive committee Te Arataura, said the new rate flies in the face of Auckland's Council's own findings that the city needs some 4300 additional rooms by 2025 to support tourism development.

"This unfairly targeted new rate is no way to encourage new investment in hotel infrastructure such as our recently announced joint development between TGH and Auckland Airport," said Mr Papa.

He asked why should the hotel sector pick up the tab when only a quarter of visitors to Auckland stayed in paid accommodation.

Hoteliers would be forced to recover the additional cost by making reductions in other areas, he said.

"Jobs make up 30 per cent of operating costs in the accommodation sector, so it is reasonable to expect that reductions in hours and shifts will be an obvious targeted area with a direct impact on workers and consequently their spending in Auckland's economy," said Mr Papa.

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