Hawke's Bay bed tax idea to fund tourism could hit Airbnb hosts

"Bed tax" on the way? Photo / File

Hawke's Bay people making money renting out rooms through online platforms like Airbnb could end up paying a "bed tax" to help fund tourism promotion in the region.

Hawke's Bay Tourism last week had its funding reduced by $300,000 after the Hawke's Bay Regional Council confirmed its Long Term Plan.

The council originally wanted to strip back funding by $1.8 million over the next three years, but changed its mind after nearly 300 public submissions against those plans.

It will now reduce funding by only $300,000 in year one, keeping funding at $1.52m for the first three years of the Long Term Plan, and asked the region's tourism organisation to investigate other funding avenues, such as a bed tax.

Hawke's Bay Tourism general manager Annie Dundas said the council's decision to provide a consistent level of tourism funding for the next three years was incredibly important for the region.

"While our budget has been reduced in year one of the council's Long-Term Plan, the compromise to maintain that funding level for three years ensures Hawke's Bay will continue to be competitive and therefore maintain its share of the growing tourism market," she said.

"We understand Hawke's Bay Regional Council was under considerable pressure to fund their proposed plan, and we acknowledge the support they have provided the tourism industry over an extended period."

The revised proposal also contains several additional directives including investigating alternative funding streams, which Hawke's Bay Tourism will discuss with the council and the local and national tourism industries over the coming months.

One potential avenue involves a rating reclassification for peer-to-peer properties, such as those who list on websites like Airbnb, who meet a defined threshold of visitor nights.

A similar proposal is being debated in this week's Auckland Council budget.

"Queenstown and other regions are investigating this potential revenue avenue as well," Dundas said.

"This would go some way to ensuring peer-to-peer accommodation operators who directly benefit from the growth of the tourism industry are making an equitable rates contribution."

She said the debate over visitor or bed taxes is currently being had at a national level and Hawke's Bay Tourism will feed into that discussion.

However, it would require considerable discussion and consultation and ultimately a change in legislation.

"Hawke's Bay Tourism, alongside Hawke's Bay Regional Council, will continue to be actively involved in the national discussion relating to the funding of tourism, as the industry navigates a path towards sustainability."

Tourism Industry Aotearoa chief executive Chris Roberts welcomed scrutiny of peer-to-per accommodation providers but pointed out that could only be achieved through property rates, rather than an actual "bed tax".

"It is not currently possible for any council in New Zealand to charge a bed tax. Only central Government, through IRD, is able to collect taxes. Councils can only collect rates, although these are sometimes incorrectly referred to as taxes.

"A bed tax - a charge to the guest for each night stayed in accommodation – is not possible in New Zealand and there is no indication that the Government would change the law to make it possible.

"What can be considered, in Hawke's Bay and elsewhere, is changing the council rate on properties that are promoted through online platforms like Airbnb.

"TIA supports moves towards a more level playing field. Many of the listings on Airbnb are clearly being run as a commercial enterprise and should be rated accordingly."