Auckland council passes 'hotel tax'

The 'hotel tax' will be taken to the full Governing Body, consisting of Auckland Mayor Phil Goff, pictured, and the other 20 councillors. Photo / Greg Bowker

Auckland councillors have voted in favour of a targeted rate on accommodation providers.

The rate will fund the council agency Auckland Tourism, Events and Economic Development, for tourism promotion and events sponsorship.

The council's finance committee have voted in favour of a hotel tax by 11 votes to 8.

It will then be taken to the full Governing Body, consisting of Auckland Mayor Phil Goff and the other 20 councillors.

The final details of an accommodation levy will be confirmed at a later date.

Tourism Industry Aotearoa and Hospitality New Zealand said they were disappointed because most of the councillors recognised the unfairness of the proposal but a majority still decided to vote for the measure.

TIA chief executive Chris Roberts said the targeted rate proposal was based on bad information and a poor understanding of how the visitor economy works.

"There is an alternative approach to the targeted rate. The commercial accommodation sector has repeatedly offered to work with the council to find a fair and sustainable way to make an appropriate contribution to the city's visitor and event promotion activities. That offer still stands," Roberts said.

HNZ chief executive Vicki Lee said the targeted rate would have a devastating impact on Auckland's commercial accommodation sector and the wider tourism industry.

"An unbudgeted cost increase of this magnitude would create serious challenges for any business, and Auckland's motels and hotels are no exception," Lee said.

The groups would work with their affected members to decide on their next steps.