Mountain Scene - Let’s use Hawaii for tax inspiration

I've  stayed out of the bed tax debate thus far. It’s not that I don’t have an opinion or five but more that it’s such a complex issue and there are so many valid points of view. However having just visited Hawaii to enjoy a wedding in stunning Waikiki, I have been able to draw on some comparisons from another rapidly developing tourist mecca.

We agree Queenstown’s resident population is unable to fund via rates the infrastructure required to be a world class resort.

I’m not defending the council’s average planning record of managing our growth but I will acknowledge the significant challenge they face.

Council needs to secure more funding and it can only come from three places — locally via rates, nationally from the government or from our visiting guests.

Capturing it from guests seems logical and a bed tax is the hot topic.

Hawaii is home to 1.5 million people and attracts 6.5 million visitors each year. Nothing like the Queenstown local to visitor ratio but a bustling tourist mecca all the same.
   
The first thing you notice in Hawaii or the United States in general is that you see an advertised price and it’s nothing close to what you will actually pay. Prices are usually advertised without tax.
 As a guest you can add the state sales tax of 4 per cent or 4.5 per cent in Oahu (the half a percent is for Honolulu’s new rail system).
  
Your accommodation will attract a 9per cent bed tax to help cover your contribution as a tourist towards infrastructure.
   
There is also the epic swindle of a resort fee ($US25 usually) which basically gets you free Wi›Fi and free local calls and a load of other rubbish services you don’t even use.
   
The rental car has a state highway fee of $US3 per day added along with a raft of other charges.
   
Add a gratuity or tipping to that mess for what I often found to be pretty average service in Honolulu and you can be looking at prices 20›35 per cent over what is advertised —with visitors being charged a premium to fund infrastructure.
   
Yet the tourists still come, the hotels are still full.
   
As shambolic and annoying as it appears this is a long› established taxation system which has come to be well› accepted.
   
For Queenstown to add a new tax will obviously come with considerations, such as negative PR along with implementation, collection and administration costs. There are also visitors a bed tax won’t catch — like people staying in private homes, Air B&B or day visitors.
   
Here’s a simple idea that will unfortunately never fly.
   
We generate a lot of GST in Queenstown from our huge visitor spend, far more than we would ever get back in government services.
   
GST is a tax that is already established and covers all spending by all visitors and locals.
   
There could be a special fund set up by the government for regions whose bed night›to› ratepayer base ratio exceeds a certain number.
   
Councils can then apply for funding of infrastructure projects. It won’t be popular for regions that can’t apply nor with the government — as they already spend this collected GST on other things.
   
There is plenty of complexity surrounding the issue and I don’t think a bed tax is the perfect silver bullet but it works in Hawaii, and other regions. What also works is better long› term council planning.

Mark Wilson is a Queenstown marketing consultant