Auckland hoteliers take Mayor Phil Goff's 'bed tax' to Court of Appeal

Thursday, 5 March 2020

Auckland has the hotel rooms but not enough staff to cope with the influx of visitors expected for major events in 2021.

A group of hotel and motel owners is launching another round of legal action against a $14 million additional rates bill brought in by Auckland Mayor Phil Goff.

Auckland Council won in the High Court in February, where a judge upheld the legality of the 'targeted rate'.

CARP – the Commercial Accommodation Rate Payers – will argue in the Court of Appeal the law had not been properly applied.

The rate took effect from mid-2017, having been proposed by Goff as his first key initiative soon after his election in 2016.

Auckland Mayor Phil Goff unveiled the plan to introduce a targeted rate on hotels after election in 2016.

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The targeted rate on hotels and motels has been applied since 2017.

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The new layer, which is aimed at funding half of the city's tourism promotion costs, can add hundreds of thousands of dollars to the annual rates bill of a big downtown hotel.

'CARP's steering group and four plaintiffs were unanimous that an appeal was justified given the significance of the issue and its impact on Auckland hotel owners and operators,' the group said in a statement.

The High Court in February rejected all the main planks of the case argued by CARP to challenge the council's Accommodation Providers' Targeted Rate (APTR).

CARP's appeal decision has been supported by the Hotel Owners Association, NZHOA.

'The impact of this targeted rate on Auckland hotel owners, who are already under financial strain with Covid-19, is significant – increasing their rates threefold in some cases and costing them hundreds of thousands of dollars,' Amy Robens, the executive director, said.

'Only a quarter of visitors to Auckland stay in commercial accommodation such as hotels and motels.

'The APTR should be spread fairly across all those who benefit from tourism, including retail, food and beverage outlets, transport and tourism attractions, or be addressed at a national level by central government.'

Auckland Council has so far spent $1.2 million defending the legal challenge to the rate.

The Singaporean owner of Auckland's Stamford Plaza hotel said in 2017 its rates bill would almost double from $620,000 to about $1.2m.