CINZ opposes Auckland accommodation targeted rate proposal

30 March 2017

Proposed Auckland accommodation rate will damage high-yield business events sector

Conventions and Incentives New Zealand (CINZ) is adding its voice in opposition to Auckland’s proposed targeted rate hike for commercial accommodation providers.

CINZ Chief Executive Sue Sullivan says it is vital the business events sector of the visitor industry is represented in this discussion.

“Auckland Council’s targeted rate proposal would create long-term damage to the city’s high-yield and growing business events industry,” she says.

“We bid for large conference events at least three to five years in advance, with hotel rates set at the time of bidding. New costs cannot be added onto existing contracted rates,” she says.

“The average event will require at least 1000 beds per night. If the supply of high-quality, well-priced accommodation is not available in Auckland, conference delegates will go elsewhere.

“Hotels also provide vital city event venue space from everything to large ballroom functions, to smaller corporate meetings. It is vital we keep them at high standard and add new capacity as business to the city grows.

“We believe there are other, more commercial ways to secure the $27.8 million Auckland Council is seeking through the targeted rate, and with wider sector input and greater sharing a more productive solution can be found.

“There is a fundamental flaw in the Auckland Council’s claim that the immediate direct beneficiaries of their visitor attraction and major events funding are the accommodation providers. This is incorrect,” Sue Sullivan says.

Spending on accommodation in the year to January 2017 was $697 million – just 9.3 per cent of the total annual $7,486 million tourism spend in the Auckland region. In comparison retail spend was $2,249 million or 30 per cent of the total annual spend. (MBIE Monthly Regional Tourism Estimates).

“The Council has failed to recognise visitors to Auckland have options other than commercial accommodation. The number of travellers using Airbnb, holiday houses and staying with friends and family has increased significantly. Auckland Council has not considered this in their calculations.

“The large percentage of guests of the hotel and motel properties who would be hit with the targeted rate are not tourists, they are corporate or government travellers.

“CINZ will work closely with the tourism and hospitality sector in Auckland, and Auckland Council to seek a suitable solution,” Sue Sullivan says.

ENDS

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