File pic Photo: 123RF
Auckland Council is a step closer to reinstating its controversial hotel bed tax after the Supreme Court ruled in its favour.
A targeted rate was introduced in 2017 as a way of raising money for its tourism and events arm, Auckland Tourism, Events and Economic Development.
The super city's governing body wanted to overturn a Court of Appeal decision from 2021, where it was ruled accommodation groups like the Copthorne and Millenium hotels were only receiving a small amount of funding.
On Friday, the Supreme Court ruled in favour of the council, meaning the legislation can be reintroduced but will have to go through consultation.
Auckland Council chief executive Jim Stabback said appealing a Court of Appeal judgment was not a matter the council took lightly.
"We are pleased that this decision gives us clarity to consider our future options," Stabback said.
"This decision fully endorses the approach taken by the council and emphasises that, provided we meet necessary process requirements, as we did here, the funding tools available to us may be used in this way."
The decision has disappointed Millennium and Copthorne Hotels NZ, who was a part of the appeal.
Company secretary Takeshi Ito said the rate upheld by the court was unfair and inequitable, and the decision potentially had longer term implications for hotel owners and ratepayers.
"We are terribly disappointed by the judgment," Ito said.
"We consider that the Supreme Court has missed a unique opportunity to provide guidance to local government across New Zealand and, in our view, should have clarified the position on how targeted rates should work," he said.
"We believe that the judgment is bad news not only for hotel owners and operators but also for any other group who will be subject to inequitable targeted rates in the future."
The Accommodation Provider Targeted Rate (APTR) previously funded 50 percent of Tātaki Auckland Unlimited's destination expenditure, particularly on visitor attraction and major events.
The rate was suspended, and associated expenditure reduced, when borders closed in 2020 due to the Covid-19 pandemic.
The levy cannot be reintroduced in the Annual Budget 2023/2024 but could be considered as a funding option in the 2024-2034 Long Term Plan.
