Tourism dollars heading offshore - industry leader

Kiwi accommodation providers are losing out to big international booking agencies, says the head of NZ's Motel Association. Photo / File

New Zealand's tourism sector is losing out to big international booking agencies who "have no vested interest" in our country and are only there to "clip the ticket', says an industry leader.

While Kiwi tourism has benefited hugely from the growth of the internet, the industry and politicians need to consider the costs, said Michael Baines, Motel Association of New Zealand chief executive.

When tourists book accommodation here through domestic providers, it ensures the commission stays within New Zealand and is reinvested into our economy, Baines said.

But Baines said he is worried about the international booking providers.

"When a tourist from Europe, Asia or America books accommodation through one of the big international booking agencies, that is commission that is lost to our tourism sector."

That means New Zealand is missing out on up to 10 per cent of the booking cost and accommodation providers here cannot reclaim GST paid on that commission because it is zero-rated for GST.

"These companies have no vested interest in New Zealand and our tourism sector; they are only there to clip the ticket," Baines said.

"They charge a commission which is not reinvested into our economy, and does not contribute to the wages or taxes which keep our economy afloat."

Baines argues that international booking agencies are squeezing local accommodation providers by forcing them to push down prices in order to drive sales.

The Government and tourism sector need to join forces to look at ways to stop cash flowing offshore, he said.

"Perhaps it's timely to consider introducing a Commissioner for Small Businesses that can go in to bat for these companies that employ locally, pay taxes and make sure profits remain within New Zealand."

- HERALD ONLINE