A proposed targeted rate on accommodation providers may cause local organisations to miss out on prime funding from the Mount Wellington Charitable Trust.
The proposed rate forms part of Auckland Council’s annual budget for 2017/2018 and will replace $27.8 million of general rates funding spent by council annually on visitor attractions and major events.
All commercial accommodation providers, including hotels, motels and bed and breakfasts, will be required to pay a rate that works out to be approximately 4 per cent of their revenue, which is expected to increase the cost of a nightly stay by around $6-$10 for a typical hotel when passed down to visitors.
It is expected some accommodation providers will face rate increases of up to 250 per cent.
General manager of Waipuna Hotel and Conference Centre and chief executive of the Mount Wellington Licensing Trust, David Comery, is expecting a rates increase of $400,000 for the hotel if the proposal goes ahead.
He said the difference may need to be deducted from charitable giving in order to maintain operations at Waipuna, where 80 per cent of business is New Zealand-based.
“Our gifting programme to needy entities within our community, amounting to some $1.6million this year, may have to be cut short by the additional $400,000 Council is considering taking from us in the 2017/18 year.
“It’s not a certainty… but [if the proposal goes ahead] the work of the Charitable Trust will inevitably be impacted.”
Owned by the Mount Wellington Licensing Trust, all profits from the hotel (after capital expenditure and debt repayment) are gifted to the Mount Wellington Charitable Trust and donated back into community organisations.
In the past year, more than $1.6 million has been given to community organisations by the Licensing Trust in total through its charitable subsidiaries.
Recent donations have helped local students pursue tertiary studies, built a new pontoon on the Tamaki River, supported the building of a bariatric ambulance for St John, provided care for senior citizens and built a smarter messaging system for a primary school.
A donation to the Middlemore Foundation from the proceeds of the Waipuna Fun Run and Walk (sponsored by the Waipuna Hotel and Conference Centre) has helped to ensure an accuvein becomes part of the standard equipment in use on the medical floor of Middlemore Hospital.
An accuvein is a special tool used to light up veins in a patient’s arm, increasing the ease of putting in lines and injections, particularly for children and staff at Kidz First.
Mr Comery said while he appreciates the funding challenges faced by Council and agrees the accommodation industry at large would not be opposed to contributing to the cost of attracting visitors to the city, it is unreasonable the industry should bear the full cost.
“Of the $7 billion revenue that comes in for the tourism industry, the accommodation sector only enjoys 10 per cent of that… and when people decide to book elsewhere, staff start missing out on work and the community is also affected by that.
“The Mayor has been advised by council advisors it will be an easy pass on, and it won’t.”
Public consultation on the 2017/2018 Annual Budget has now closed.
