LEVY CAN WORK FOR CITY
New visitor tax a chance for FNQ to control its own tourism destiny
A NEW visitor tax is emerging as a critical component to the Far North’s tourism success. Long-time advocate Mayor Bob Manning said a levy could raise $16 million per year to be spent on marketing. It would allow FNQ to chart its own successful course but who will pay is proving contentious.
HOTELIERS have been warned to back a tourism levy now or risk becoming a cash cow for skint future governments desperate to balance the books.
Cairns Regional Council Mayor Bob Manning has been agitating since March last year for legislative changes to allow councils to boost tourism marketing funds by charging levies on accommodation.
The long and bumpy journey is far from over, with the accommodation industry divided over the added impost, no matter how modest.
The Queensland Hotels Association rejected any levy that put all of the onus for collection on accommodation providers and now the boss of the largest hotel group in the Far North has joined the ranks.
“Now is not the right time for any new cost impositions,” Accor Pacific chief operating officer Simon McGrath said.
“This would be devastating to hotels who are already under extreme pressure.
“A broader-based tax, not one just targeted mainly at hotel accommodation providers, would be fairer.”
Airbnb has become the biggest room provider in Cairns, wielding a massive 17 per cent of the city’s accommodation.
It has backed calls for a levy which would supercharge the hotel industry, according to new economic modelling.
The proposed 2.5 per cent bed tax would raise $16 million per year for the Cairns tourism industry based on 2017-18 figures.
That sum, according to work undertaken on the council’s behalf by independent economic advisory firm AEC Group, would drive $140 million of extra spending in the region once leveraged.
Since about 32 per cent of all tourist expenditure in the Far North was spent on hotels, motels and other board, that $140 million spike in visitor spending would inject $45 million straight into the accommodation sector.
Cr Manning believed hoteliers would gradually come around once they realised they stood to be some of the chief beneficiaries.
“Tourism levies are not novel – they’re novel for Australia but they are not novel for the rest of the world,” he said.
“They have been used effectively and they’ve worked for the rest of the world.”
He cautioned opponents against dismissing a levy that was guaranteed to spend all funds on tourism marketing.
“We want room rates to be going up by 20, 30, 40 per cent because the demand is there – we want the hoteliers to all be super profitable,” he said.
“(Otherwise) this will end up with state and federal governments hijacking this proposal, giving themselves a cash cow, flicking a little bit more to the industry, and saying: ‘Well, you were better off than you were before, don’t whinge’.”
However, he did not think any government would be stupid enough to use a levy to shirk its existing tourism funding commitments.
“You don’t kill the goose that lays the golden egg,” he said.
NOW IS NOT THE RIGHT TIME FOR ANY NEW COST IMPOSITIONS. THIS WOULD BE DEVASTATING TO HOTELS WHO ARE ALREADY UNDER EXTREME PRESSURE. ACCOR PACIFIC CHIEF OPERATING OFFICER SIMON MCGRATH