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Tourism industry opposes taxes on Auckland visitor

Media Release

Tourism industry opposes taxes on Auckland visitors

15 November 2006

Tourism operators from around the country are overwhelmingly opposed to taxing visitors to Auckland to fund a new or redeveloped stadium, according to a new survey.

In releasing the survey results today, Tourism Industry Association New Zealand (TIA) Chief Executive Fiona Luhrs said 97 percent of respondents opposed using bed or airport taxes to fund the stadium.

“TIA and the wider tourism industry are in full support of the Rugby World Cup 2011 and look forward to the event being a huge success. But the funding lines for a stadium should not be from bed taxes and departure taxes,” Ms Luhrs said.

“The strength of feeling in the tourism industry on this issue is clear and affirms that TIA is correct in arguing against visitor taxes to fund this facility. Our online survey attracted close to 500 responses from our 2000 Members – certainly the biggest response we have had to any issue in the last few years.”

Respondents to the survey recorded mixed views on whether the stadium should go ahead on Auckland’s waterfront or at Eden Park, though they were not specifically asked about the stadium location.

However, only four percent (18) of respondents indicated any support for the introduction of visitor taxes to pay for a stadium, Ms Luhrs said.

“And 99 percent of respondents wanted a mix of government funding, local government rates, commercial investment and sponsorships to fund the construction.”

Of the respondents to the survey:

* 24 percent were from the Auckland region

* 68 percent were accommodation providers

* 32 percent were involved in other areas of the tourism industry

* 83 percent rated the stadium funding issue as being of high importance to the tourism industry

* 6 percent expected their business to benefit directly from a new stadium, while 19 percent expected some indirect benefits

* 75 percent expected marginal or no direct benefits to their businesses from a new stadium.

“Only 13 percent of respondents said that a visitor tax would make no difference to visitors’ travel patterns, with the balance expecting visitors would spend less and stay for shorter times,” Ms Luhrs said.

Numerous respondents warned that visitor taxes would make many small accommodation businesses unviable, particularly at the budget end of the market. Larger operators said they would have to absorb any taxes as tariffs have been quoted to international travel wholesalers through to 2008, she said.

“There was also widespread concern that imposing visitor taxes to pay for facilities that would not be used by those visitors was setting a dangerous precedent.”

The results of the survey clearly demonstrate that TIA has the tourism industry’s backing for its efforts to fight the use of visitor taxes to fund a stadium, Ms Luhrs said.

A selection of respondents’ comments from the TIA survey:

* “Reaction will be extremely negative to what will be seen as a totally inappropriate funding mechanism and will likely draw significant negative press around the world.”

* “I thought we were trying to encourage international visitors to come, not penalise them for coming. The venue is where the money is to be made; the price of the ticket should reflect the cost of the venue.”

* “It will destroy the backpacker market in New Zealand. While a $10 bed tax may not have a large effect on visitors at the top end of the market, a $10 tax will price New Zealand out as an affordable backpacker destination.”

* “We are already one of the more expensive destinations on the planet, and this would be another deterrent.”

* “Accommodation providers and airports may be the easiest from which to collect payments but they are not the only businesses to benefit from tourism. Restaurants, bars, entertainments, internal travel providers, shops, in fact almost every form of business makes a profit from our visitors. Why not put a tax on those whose activities will benefit from this proposed structure?”

* “It is extremely important that tourists feel they get a fair deal and if the perception becomes that they are a cash cow it could have a huge impact on our reputation as a destination. Any future development must be funded by the people who will eventually get the benefit and that certainly isn’t the football loving European tourist who hasn’t even heard of rugby who arrives in Auckland five years before a game is even played in the stadium. Airport taxes are for the benefit of those using the airport and associated facilities and are in some ways user pays, which is acceptable. As a general form of taxation it is robbery. Tourists pay GST and fuel tax now so get real and leave them alone.”

* “Corporate business is a huge part of the accommodation sector; making select businesses pay tax because they visit Auckland is ludicrous.”

* “Rugby has a very low profile in many of New Zealand's main tourism markets (e.g. United States, Korea, Taiwan, China, Germany, India) and I expect their visitors will feel highly ripped off being 'gouged' in this way. If I was passing through Hawaii I wouldn't expect to have to pay for the construction of a baseball stadium or in the UK a cricket ground.”

* “If a bed tax is introduced, it will probably put us out of business.”

Key statistics about tourism:

* Tourism is the world's fastest growing industry

* New Zealand tourism arrivals have doubled in size since 1994 to 2.38 million

* Forecast annual growth is 4% on average for at least the next five years

* Tourism is New Zealand's single largest export sector and contributed $8.1 billion dollars to the economy in the year ended March 2004. That is 18.7% of exports

* Domestic tourism contributes $9.4 billion to the economy each year

* Tourism directly and indirectly employs 10 percent of the work force. That is one in 10 jobs in New Zealand.

* Tourism represents 9% of gross domestic product and generates nearly $526 million in GST returns from international visitors each year. Tourism is the only export sector whose international clients pay GST.


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