Tauranga City Council is eyeing ways to take a cut of millions of dollars in profits generated by homeowners renting their houses and spare rooms to tourists online.

The council's finance staff have been asked to look into options for a targeted rate on short-term rental properties advertised on sites such as Airbnb and Bookabach.

The move has been welcomed by Tauranga's commercial hospitality sector, which says it would even the playing field between home businesses and commercial accommodation providers.

Bookabach's general manager, however, has warned the rate could be bad for holidaymakers and tourism, as well as a huge hassle for homeowners.


Hospitality New Zealand's Bay of Plenty manager Alan Sciascia lobbied Tauranga's council follow the lead of councils in Queenstown and Rotorua and charge commercial rates to what he described as "boutique accommodation businesses running under the guise of a private residence".

"I am very pleased the council is considering making this move. It's only appropriate that all businesses should be treated alike," he said.

He said his market research had shown there were Airbnb hosts in holiday hotspot Mt Maunganui, where multiple listings made more than $80,000 a year.

In the 12 months to February, Airbnb hosts in Tauranga took in more than $12 million, he said.

The number of Tauranga listings marketed on the international site had risen from 34 in 2013 to more than 1000 this year - a number that could double in summer.

Many hosts had multiple listings. Between them, three of the city's top 10 hosts controlled 61 properties, he said.

"This is no longer play money generated during peak season holidays," Sciascia said.

"This is serious business."


Tony Bullot, owner of 850 Cameron Motel, was also pleased.

He said his business faced costs a homeowner did not, such as commercial rates, health and safety compliance and business insurance.

There was room for all accommodation types in Tauranga, but they should be rated equally.

Landlords changing long-term rentals into short-term leases was also contributing to Tauranga's housing shortage, he said.

"You've got tourists taking houses that needy families need and needy families being put in motel rooms by Winz."

Bookabach general manager Peter Miles said he thought there were better ways of raising funds for tourism infrastructure than property rates.


He said the approach proposed by Auckland Council - a sliding scale where more rented nights meant higher rates - was ripe for abuse.

"The approach encourages under-reporting and will see some property owners decide it's not worth renting out short-term rentals for the added cost/hassle."

"So, it's bad for holidaymakers and families as it'll mean less choice, and potentially a price increase as owners look to pass on the cost.

"Also, hosted accommodation is not covered by this – so it's still not a level playing field."

He said Bookabach favoured a bed tax jointly administered by councils and central government.

"We feel travellers would accept a nominal fee added to their accommodation bill if it was clear the funds were going towards tourism infrastructure."