Coronavirus: Support for Auckland hotel sector may be unveiled next week

Tuesday, 31 March 2020

Most Auckland hotels have remained open, but with a skeleton staff. Hotels want relief from an additional council rate they pay (file photo).

Auckland mayor Phil Goff says the council needs to do something to help the beleaguered hotel sector which is struggling due to the coronavirus restrictions.

Goff said the nature of assistance could be known 'as early as next week' as part of a re-assessment of the council's own financial position.

Auckland mayor Phil Goff said the hotel sector is going through the hardest time it's been through.

The accommodation sector has a unique financial burden in Auckland, paying an extra rate totalling $14 million since 2017, to part-fund major events and tourism promotion.

'We need to do something to assist them through the hardest time they have been through,' Goff told Stuff.

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Goff did not detail the options with the Accommodation Providers Targeted Rate, (APTR) which he introduced, but said 'we'll do what we can to help'.

The accommodation industry had opposed the rate from the start, arguing it gained only about 10 per cent of the benefit from tourism, but was carrying an oversized share of the promotional costs in Auckland.

Hoteliers sought a judicial review, but the High Court found in the council's favour, which has now been appealed.

'The impact of the rate has always been significant, even before this hit,' Amy Robens, chief executive of the New Zealand Hotel Owners Association, said.

'Playing around with some form of relief for a year or so, I don't think is viable - it must go,' she told Stuff.

Robens said most hotels remained open, but had skeleton staff, and some major properties had as few as 60 guests.

'Coronavirus won't be forever and the hotel owners are resilient - they are driven, and sound business people,' she said.

The APTR was introduced to replace general ratepayer funding for 50 per cent of the costs of staging major events, and promoting tourism, through the council agency ATEED.

Major events backed by ATEED have been postponed or cancelled, and promotional initiatives such as a mutual marketing deal with New York City are on hold.

ATEED is involved in the running of a Covid-19 Mayoral Business Advisory Panel, announced on Monday,

Auckland Council is working through several scenarios on how its own finances will be hit by Covid-19, and any help for ratepayers is a part of that.

Revenue is expected to be down due to lower public transport use, the closure of facilities such as leisure centres, and a slowdown in consenting and construction.

Goff said the council would be facing a 'new future.'

'Prior to the end of December we had good revenues, and big expenditure plans - to now where revenue falls and the ability to pay rates may diminish,' he told Stuff.