Like many in the tourism sector, accommodation providers are struggling financially under the lockdown response of COVID-19, and a proposed rates increase by the Queenstown Lakes District Council (QLDC) is causing additional pressure under already stressful circumstances.

Many local accommodation providers have joined a newly established representative group, the Lakes District Accommodation Sector (LDAS). LDAS, which has 135 members (over 40 per cent of whom are based in the Upper Clutha), has made a submission to the QLDC’s Annual Plan detailing a proposal to have rates increases deferred until the economy improves. 

“Our group of over 130 businesses rejects the proposal to increase rates on our premises while COVID-19 has such a devastating effect on district incomes,” LDAS convenor Nik Kiddle said. Membership ranges from hotels, motels and lodges to managed apartments, backpackers and holiday park operators.

“We anticipate that there will simply be almost no money coming into our businesses for the foreseeable future.” 

Any proposal at this time to increase rates reflects not only a lack of empathy but a serious misjudgement of financial and economic fundamentals – no money in means no money out. We simply do not expect to have the income streams to pay existing rates, let alone increased rates.” 

Nik said the LDAS is urging the QLDC to join others throughout New Zealand in exercising restraint at this time of national emergency. 

“We seek a decision to defer any rates increases until the economic situation returns businesses and households to positive income streams,” he said.

Nik said the group will consider a range issues including rates increases and differentials; the banking sector’s merchant services fees for cancelled transactions; and formulating and coordinating action with online booking agents/discount ticket shops. Getting representation on the Chambers of Commerce and taking a closer look at Destination Queenstown’s funding and strategic direction would also be considered. 

The best next step would be for the council and chambers to offer the LDAS a seat at the table to discuss COVID-19 response and recovery plans, Nik said.

“Up to now the [accommodation] sector has been poorly represented,” he said.

Local government could best assist the sector recover from COVID-19 impacts by avoiding adding costs to businesses and households alike at this time of national emergency, Nik said.

Council should consider accessing new central government funds and borrowing instead of relying on rates and business taxation, he said. Its revised annual plan should present proposals to downsize operational expenditure, including wage and capacity adjustments, he said.

As part of the economic recovery, Nik said the group would like to see the blanket lockdown and travel restrictions replaced by enhanced targeted health protection measures.

“We want to preserve as many jobs as possible,” he said. “Central government must start to outline its plan for reopening domestic and international travel. We need timelines and pathways to help everyone move into a post crisis environment.” 

Hotelier Nik Kiddle, who stood for the role of mayor in the last local body elections, is also known as the spokesperson for the Tax Equity Group (TEG) which led a campaign to stop the introduction of a visitor levy, also known as a bed tax, on local accommodation providers. TEG remains focussed on achieving fair and equitable taxation of the tourism sector. 

Queenstown’s mayor Jim Boult, who promoted the bed tax, recently advised that under the current circumstances the proposed visitor levy had been put aside. However, the TEG is seeking confirmation the levy, including the work underway to introduce a parliamentary bill supporting it, has been permanently terminated, Nik said. 

PHOTO: Supplied