Tourism operators say ACC rises would add to problems

Tourism bosses say proposed ACC levy increases threaten the industry's recovery, as some businesses face more than a 100 per cent rises in their ACC bills.

Proposed levy increases for the 2010-11 financial year would put significant strain on an industry already trading through difficult times, said Tourism Industry Association (TIA) chief executive Tim Cossar.

Some industries will be hit harder than others.

Submissions to ACC on its proposed levy increases closed yesterday and the TIA, the Bus and Coach Association and NZ Hotel Council, said they wanted staged increases to give them more time to manage and adjust.

Mr Cossar said a ski company with more than 100 staff would face levy increases in excess of $300,000 each year.

Some sport and physical recreation, amusement and outdoor guiding businesses will face levy increases of around 100 per cent. Accommodation, cafes and restaurants were eyeing rises of more than 80 per cent, and bus transport 63 per cent.

Operators need time to adjust to the levy rises, he said, because operators set their prices up to two years in advance.

Mr Cossar said the increases would compound the challenges many tourism businesses faced as a result of the global economic downturn.

Hospitality Association NZ chief executive Bruce Robertson urged ACC to undertake a rigorous cost-cutting approach prior to imposing levy increases.

"In the past 12 months we have had 100 members close their doors and many more are marginal at best and struggling to survive. Given the labour intensive nature of the hospitality industry and the level of these increases, others are likely to fail," he said.

ACC said it had spoken to tourism groups and was aware of their concerns that the proposed increases were large and unpalatable.

"However, the levies collected from tourism operators, like many others, have for some years been less than required to cover the true cost of injuries in that sector," said general manager Keith McLea.

Introducing levy increases in stages, as the tourism operators suggested, would not allow ACC to collect enough to continue to meet injury costs and remain viable, he said.

ACC also covered tourists, so tourism operators do not have to take expensive liability insurance, Dr McLea said.

"The best way for these businesses and others to reduce levy costs is to reduce the number of accidents."

Submissions on levy increases for 2010-11 are being considered.

- NZPA