The bed tax on visitors being proposed by Napier and Hastings mayors is a 'lazy tax' that will unfairly penalise travellers who stay in commercial accommodation such as hotels and motels, says the Tourism Industry Association New Zealand (TIA).
"It won't capture the many visitors who stay privately with friends and family or those who stay in rented homes for example," says TIA Chief Executive Martin Snedden.
"It also doesn't target other businesses that benefit from visitors such as vineyards, restaurants, bars and cafes, supermarkets and petrol stations."
Mr Snedden says New Zealanders as well as international visitors will be hit by the tax.
"Kiwis who pay council rates in their own region will have to fork out again for another tax when they holiday in the Hawke's Bay.
"A bed tax is also expensive to administer. Major hotels would need to employ extra staff just to process the red-tape associated with a bed tax on visitors.
"It will leave accommodation operators with the stark choice of increasing prices or absorbing costs in order to stay competitive in an already difficult trading environment. Many tourism businesses operate on slim margins, so absorbing the cost of a bed tax may risk the viability of some smaller operators such as backpacker hostels and B&Bs.
"I will be writing to both mayors outlining the industry's position on bed taxes and why we do not support them and suggesting alternative rating proposals for them to consider."
Mr Snedden says a bed tax will make visitors feel they are being unfairly used as a cash cow when they already pay GST of $1.7 billion annually, pump millions of dollars into local economies and support thousands of jobs, not only directly in tourism but all the downstream businesses that also benefit from the visitor economy.
"We are seeing an unwelcome trend from councils in many parts of the country to unfairly penalise people for visiting their regions.
"TIA only supports targeted rates if such a rate is evenly distributed across all businesses and the revenue generated from the rate is reinvested into tourism promotion and visitor infrastructure and services."
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