Wednesday, December 12, 2018

QTIC’s idea to rort visitors angers industry

Tourism is booming. Visitors are flocking into Australia from everywhere. Domestic visitor arrivals have never been this good.

Isn’t it fantastic?

Yes, let’s tax them.

That’s the Australian way – it seems. Fortunately, at last, federal and state governments are not buying into it.

New moves are under way to slug hotel guests with a bed tax in Queensland to fund a major overhaul of the state’s tourism industry in an effort to curb the decline in market share, especially to NSW and Victoria.

Under the proposal put forward by the Queensland Tourism Industry Council, all visitors would be charged five percent a night on top of their bill at hotels, motels, bed and breakfasts, holiday parks, campsites and other accommodation types. Bookings through online providers such as Airbnb would also be hit.

Why? Well 20 percent of the money would go to funding a new industry-led state tourism company to replace the government’s marketing body, Tourism & Events Queensland, which seems to be doing a reasonable enough job at the moment despite having its funding savaged by the state government. The rest would be directed back to seven regional destination management groups, which also don’t seem to be doing a bad job at the moment.

QTIC thinks otherwise.

The new visitor tax could possibly raise about $150 million a year, with another $75 million to come from state government funding (down from the current $100 million). This is assuming there is no drop off in visitor arrivals as a result of the tax…

Modelling carried out on behalf of QTIC indicates the amount possibly available to market attractions on the Gold Coast would almost double from $15.6 million to $27 million, Tropical North Queensland and Townsville would jump from $10.1 million to $25.3 million and the Whitsundays-Mackay region budget would go from $1.4 million to $10.5 million.

Quite a gain, but at what cost to a country that already carries the ‘expensive’ label?

“Tourism is the golden goose at the moment. There are different ways you can get more eggs out of the goose – but taking it by the throat and squeezing it hard until you kill it is not the best,’’ Tourism Whitsundays chief executive Craig Turner said, reflecting the views of some of the tourist industry’s most reliable thinkers, like TEQ chairman Bob East who insisted “a bed tax deters people and it deters investment”.

QTIC chief executive Daniel Gschwind explains, “Throughout our forums there are a broad range of opinions and we appreciate concerns from accommodation providers that this [a bed tax] may place an undue burden on them and that is something we need to be aware of,” he said. “One attractive part of an accommodation levy is that it would bring everyone into the tent, including accommodation providers and digital service providers like Airbnb.”

Fortunately, the state government is making sense over the issue. “Our government will not introduce a bed tax. That was our election commitment and our position will not change. Tourism in Queensland is going gangbusters,” announced tourism minister Kate Jones. Opposition leader Tim Nicholls concurs: “The LNP would not support a new tax on our tourism industry.”

LNP member for Whitsunday Jason Costigan vowed: “I’ll fight this to the death.”

Tourism Whitsunday’s Turner went further: “We strongly recommend that QTIC walks the corridors of George St and Parliament House in Canberra, lobbying for a fair return of the taxes paid by the tourism industry to be reinvested back into the industry,” he said. “They [QTIC] are taking the easy option of trying to grab the low-hanging fruit, when in reality they should be going and buying a whole lot of fertiliser to ensure our tourism trees produce plenty of fruit for many, many years to come.”

Gold Coast Tourism chairman Paul Donovan has labelled QTIC’s proposed bed tax on hotel stays as “ludicrous”.

Donovan stressed: “Tourism officials won’t stand for it and more research is needed if the industry is aiming for an overhaul. Charging hotel guests with a bed tax is ludicrous and QTIC is just wasting time coming up with band aid solutions.”

Gold Coast deputy mayor Donna Gates is on a similar wavelength: “We need to make sure we are providing [the] best service possible and serve the needs of our tourists as best we can rather than slug them.”

Gates said people definitely looked at costs associated with their holidays. “We have seen incredible growth from China with increased flights, especially into our city and we want to grow it, not hinder it and I wouldn’t think there would be support for a bed tax from our city.”

Toowoomba Accommodation Providers, representing 53 hotels in the greater region, spokesman Tony Heckendorf said the tax would be unfair impost on accommodation providers. “We’re already lumbered with collection duties and are unlikely to recover the tax by increasing room rates in the current accommodation environment.”

The reaction from the Queensland tourist industry is totally expected, having been down this road before. But it does not seem to be deterring a tourist towns south of the border intent in milking more from the sacred cow.

The influx of 1.9 million visitors a year is being blamed for infrastructure and amenities cost increases, which means the 33,000 rate payers of Byron Bay are facing a special rate rise between 33 and 60 percent.

So, a bed tax proposal is to go before the Independent Pricing and Regulatory Tribunal. Greens mayor Simon Richardson said a “bed tax” would provide vital new revenue for council, which can barely keep up with the potholes, sewerage and rubbish generated by the “constant stream of national and international visitors” (forget the oppressive parking charges levelled at motorists).

Both the NSW government and opposition have consistently knocked back pleas for a bed tax but Richardson said he plans to lobby NSW tourism minister Adam Marshall to reconsider the plan. Marshall has already stated the NSW government did not support a bed tax on visitors to Byron Bay.

The Accommodation Association of Australia says it would oppose any move to impose a bed tax in popular tourist destinations.

But Richardson insists: “It’s something that most visitors fully expect to pay and have the capacity to pay.”

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About Graham Vercoe

Graham is one of our most popular industry reporters. Check out his monthly special reports in Resort News by becoming a subscriber!

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