City Rail Link construction on Albert Street in February 2022. Photo: RNZ / Nick Monro
Auckland businesses and city leaders are renewing calls for a bed tax to levy tourist accommodation in the city to fund major events.
Despite the government's $70 million boost for tourism announced last month, businesses hit by the highly disruptive construction of the City Rail Link and Heart of the City chief executive Viv Beck are calling for a long-term funding model.
Could a bed tax be the answer?
Rakesh Chauhan owns Supermarket To Go on Albert Street and after suffering through eight years of disruption due to the City Rail Link, he is desperate for some certainty.
"Whenever they do the construction, they block the whole, you know, driveway and everything.
"They still give access, but there is, you know, the long way access, and my store is not like a monopoly store, so people used to just come to my store.
"There are a lot of other options around, so people just go to other stores."
Due to the huge drop in sales, Chauhan had to sell his house three years ago to pay the shop's rent, let three staff go and has not taken a salary for eight years.
He is cautiously optimistic about one idea that has been floated as a solution to rev up Auckland's economy: a bed tax.
That is when a local government fee is put on short term stays in hotels or the like and is usually added to the room rate.
It is estimated a 2.5 percent bed tax in Auckland could raise around $27 million a year for the city that could in turn be used for more big ticket events to draw international visitors in.
Tourists are crucial for Rakesh; his supermarket is surrounded by hotels and apartments.
"If tourism increases, I get really good benefits like two weeks ago, All Blacks and South Africa game, whole city was pumping, right."
So far, the government has resisted the idea of bringing in a bed tax.
But the government did announce a $70m funding boost for events and tourism last month.
Viv Beck says a bed tax is one way to get the economy going. Photo: Supplied / HOTC
Heart of the City chief executive Viv Beck welcomes that boost but is calling for a more sustainable funding model.
"The government has responded to the fact there needed to be something immediate, and that's a really good start, that will enable some major events to come sooner rather than later.
"But the work needs to continue, continue to ensure there is a mechanism to fund and plan longer term."
Beck said with retail spending down in the city centre, a bed tax was one way to get the economy going and start leveraging for major events.
"We can't dip in and out, we need to create that certainty, we need to have that long-term planning because many of these large-scale events take many years to bid for, to plan, to host, that work does need to start now."
Harald Zeiss Photo: Supplied
Bed taxes are already established in other big cities around the world.
Harald Zeiss is a professor for International Tourism and Sustainable Tourism at Harz University in Germany.
Where he lives in Berlin there is a 7.5 percent tax on short-term accommodation.
Zeiss said the key to making a bed tax work was making your city as attractive and user-friendly to tourists as possible.
"What we see in some of the cities is that you pay your hotel and everything through, let's say, booking.com... then you arrive at the hotel and they will present you an extra bill, an extra charge for the city tax, which is kind of an annoyance for the tourists."
But Zeiss said it comes with concerns like whether the bed tax would apply for business trips.
"If you are travelling for business purposes to, let's say, Auckland, will you be exempted from that tax?
"This is what some cities do in order not to penalise business trips, which are helpful and very important for the economy."
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