Queenstown sets bed tax rate

Queenstown landscape.

Queenstown Lakes District Council has set its proposed visitor levy tax rate at five percent.

The Council had previously announced the controversial levy rate applied to accommodation costs would land somewhere between 5 to 10 percent.

“The proposed visitor levy provides a sustainable revenue stream that directly corresponds with the scale of visitor-related activity and any growth into the future,” said Queenstown Lakes District Mayor Jim Boult.

The levy will not come into effect until 2021, which the QLDC believes is “ample time for accommodation providers to plan”.

Accommodation industry representatives such as Accor and Hospitality NZ voiced concerns for the levy, especially because the tax will be collected and administered by only the accommodation sector, and does not affect domestic tourists who may stay in Queenstown overnight.

However, Mayor Jim Boult doesn’t think the costs should have any real effect on visitors.

“If people genuinely thought that a small increase in accommodation fees would have visitors running off to stay in Gore of Invercargill or Cromwell, we probably wouldn’t have seen this steady increase in room charges over the past 5 or 6 years whilst retaining exceptionally high occupancy rates,” said Boult.

“If people are put off coming here by a charge of $6, maybe that indicates those visitors are not ones that are contributing economically to the District.”

The Council considered other levy options such as charges at the airport, but the idea was dismissed because only around 40 percent of visitors fly through the airport.

Boult also said that the Council tried to get a percentage of GST from the Government, but both the current Labour government and the previous National-led Government refused.

Voting on the non-binding referendum will be held from 14 May to 5 June 2019.