To Tax or not to Tax?

Cairns Mayor Bob Manning has been floating this idea of a dollar per room, per night bed tax for a few years now and looks like he won’t give it up. It’s not a bad way to fund local government infrastructure upgrades due to the influx of millions of non-rate paying visitors.

Imagine the new experiences that could be built or old and tired infrastructure improved, some councils could even provide parking at the beaches or local roads to manage over 12 million visitors a year on the Gold Coast. Spending it all on tourism marketing would be a huge mistake.

The mechanics of a bed tax would be a nightmare and how would one grab a dollar per room per night from Air BNB etc. A robust third-party system can be implemented and audited with minimal overheads.

Queensland has 13 Regional Tourism Organisations (RTO) basically, every large city/town or region has an RTO, we have an overarching body Tourism and Events Queensland pulling the strings, a state government Department of Tourism and the most active and outstanding Queensland Tourism Industry Council (QTIC), a tourism sector funded lobby and policy group. How could I forget Tourism Australia and Kylie Minogue's Matesong TV Campaign!

I’m told there is broad industry support for a tourism levy (bed tax) however given the above structures one could suggest a root and branch review of all these overlapping bodies (excluding QTIC) that could result in a productivity and economic dividend resulting in millions more being spent directly on marketing and growing visitor numbers, longer stays and higher expenditure.

Queensland competes with many single brands such as New Zealand, Tasmania, Melbourne, etc and our tourism message is fragmented 13 ways via destination and to a much lesser extent, experiences.

The dilution of messaging, duplication of resources and effort seems misplaced in a digital world of tourism marketing and promotion and don’t forget those highly paid Instagram influencers. In Queensland, we have a good dose of parochial focus at the expense of the overall Queensland result.

If Cr Manning can bring the 13 RTO’s and Tourism and Events Queensland to the negotiating table and produce real structural change then let’s have a bed tax, however if the status quo remains this $1.00 tax will be consumed in increased overheads and further entrench the 13 parochial messages across Queensland.

Currently, the Gold Coast City Council imposes a tourism levy on commercial rateable properties in specific tourist locations in the city and this raises $16.61 million per year (77% of their RTO's revenue) so I guess their existing revenue could be offset by the 26 million visitor nights spent on the Gold Coast. On the Gold Coast this would be a win, win, business no longer pays the council levy at the current rate and the RTO pockets more cash then they have ever dreamed about.

A bed tax along with reform would fundamentally change the way all RTO's operate and I am convinced this change would grow Queensland's share of the highly competitive tourism market, increase the length of stays and grow yield.

Cr Mannings timely suggestion of a bed tax requires the full consideration of the Tourism Minister the Hon Kate Jones, the state government, the Local Government Association of Queensland (LGAQ), Councils, RTO's, the tourism and hospitality industry including the airlines and major airports as well as the local communities.

What better time than 2020 to introduce a bed tax when Queensland is on the cusp of winning the 2032 Olympic Games. Prior to 2032, we would have twelve years of taxes directed into a united, revived and focussed tourism industry in Queensland ready to meet the opportunity of hosting the world's largest event in 2032. Bring it on!

On the last day of 2019, Councillor Manning should be congratulated for his courage in suggesting a new tax for the benefit of all Queenslanders, his city and region.

Tourism Levy Cairns Post