Short term rental accommodation owners in Central Otago could soon be faced with a targeted rate similar to what the Queenstown Lakes District is proposing with its visitor levy.

A report to the Central Otago District Council (CODC) by group manager - community vision Dylan Rushbrook, to be considered at this evening’s meeting, will discuss its position on localised visitor levies, and give direction to staff on whether they should rate short term rentals in preparation for consultation through the Long Term Plan.

Tourism Central Otago has long advocated for a national solution to tourism system funding, and the Queenstown Lakes District Council (QLDC) already has the approval of central government to explore that option.

The report said the international visitor levy, which has just been raised to $100 per visitor, is still under review, and staff understand this will be used nationally rather than regionally.

Central Otago has enjoyed significant growth in its visitor economy, with spend up 39 per cent since 2019 - primarily in the domestic market, although operators are reporting a slight slowdown in that market due to cost-of-living pressures.

“At the same time, growth is happening in international markets, particularly the Australian market which is well served by direct flight connections into Queenstown Airport. With further investment from both the public and private sectors into the visitor economy, it is expected Central Otago will continue to experience growth,” Dylan said in his report.

The QLDC propose a levy for accommodation spend per night of a visitor stay.

It aims to capture commercial and short-term rental accommodation such as Air BnB.

Tourism Central Otago would prefer a national levy, but believe it was unlikely to eventuate in the short to medium term.

“It is now the view of staff that Central Otago District Council should publicly support the Queenstown Lakes District Council proposal for a localised levy in the absence of a national solution being forthcoming. While publicly supporting the Queenstown proposal, it would also be advantageous for Central Otago District Council to form a public position on localised visitor levies within Central Otago.”

While it was expected there would be some resistance from the commercial accommodation sector initially at the introduction of a levy that will impact on their guests, the report said it was currently intended that only standalone short-term rentals be considered - not private dwellings and those letting out rooms.

Councillors will discuss how the visitor levy funding would be used - it was proposed that a small portion be allocated towards destination management, but the bulk of the funding be directed to infrastructure upgrades and development. 

The estimated $100,000 to $250,000 would be recommended to be used towards supporting work programmes that help Central Otago navigate the challenges of rapid population growth.

Staff have recommended that council formally supports QLDC’s approach to introducing a localised short-term visitor levy and supports CODC in taking its own position on it as well.

This would be followed by staff bringing back a cost/benefit analysis of introducing a commercial or targeted rate on short-term rental properties within Central Otago.

Tonight’s CODC meeting will be held from 6pm to 10pm, starting with a public forum and submitters speaking on districtisation before a final decision is made, and followed by the discussion on visitor levies.