Like other communities in Aotearoa, New Zealand, Queenstown faces a big and growing maths problem. On one hand, more money is needed to build the infrastructure the community needs and deserves. On the other hand, revenue just isn’t keeping up.
Something needs to change. So what then is the best response to this problem?
We believe the response put forward by Mayor Boult and Queenstown Lakes District Council is the best one. It involves requesting that the Central Government change the law to allow the Council to introduce a new Visitor Levy. Under this proposal, visitors would be charged a low, flat rate of 5 percent of the cost of accommodation. For example, if a guest pays $100 for accommodation they would also pay a $5 levy. Council would invest the additional revenue raised, an estimated tens of millions of dollars a year, into projects that would benefit local families and small businesses, including those in the tourism industry.
Airbnb has long advocated for visitor levies, and believe they are a fair, proven and sustainable way to raise more revenue for local communities. Visitor levies are fairer because they broaden the tax base and don’t increase the tax burden on local ratepayers or businesses. In Queenstown’s case, a visitor levy would grow the tax base from the current 25,000 ratepayers to include the millions of visitors who stay in Queenstown every year. Without a visitor levy, Council has estimated that rates might need to rise by as much as 35 percent for certain property types and that would mean that instead of tourism paying its way, local ratepayers will continue to foot the bill.
Evidence and experiences also shows visitor levies, if designed and delivered correctly, work. They are a tried and tested way for cities and communities to raise additional revenue to fund local infrastructure or services. Airbnb has partnered with more than 400 jurisdictions around the world to collect and remit taxes, and raised more than NZD$1.5 billion to date. In Los Angeles alone more than NZD$150 million has been collected and remitted to the City of Los Angeles.
There are some in the accommodation sector who will claim these visitor levies are bad for business. They will argue that these levies will negatively impact tourism and deter tourists from visiting and staying in Queenstown. We respectfully disagree. You only need to look at the continued popularity of destinations like New York, Paris, Rome and Amsterdam which have similar visitor levies. It’s not just big cities – communities that are similar to Queenstown like Aspen and Whistler have established similar visitor levies. What’s more, by investing more in local infrastructure and improving the visitor experience a new levy could actually support the tourism industry to grow.
Mayor Boult should be commended for having the vision and courage to put to voters a fair, innovative solution to Queenstown’s thorny math problem. A new visitor levy would raise more money for the infrastructure the community needs, without burdening locals or sacrificing the economy.
Brent Thomas is Airbnb’s Head of Public Policy Australia and New Zealand.