Motel Association of New Zealand chief executive Michael
Baines makes a plea "to stop tourism dollars heading
The tourism sector, like so many other industries, has been
massively and profoundly affected by the growth of the
Just one aspect of this is the ability for someone on the
other side of the world to make all their accommodation
arrangements using an online booking provider.
This is undoubtedly a boon when it comes to promoting Godzone
to the world.
But this benefit comes with a cost, and it is something that
the industry and politicians need to consider. Domestic
booking providers such as Jasons.com, AA Tourism and BookIt
do a great job and the best thing is that bookings done
through these companies ensure that the commission stays
within New Zealand and is reinvested into our economy. It is
the international booking providers that I am worried about.
When a tourist from Europe, Asia or America books
accommodation through one of the big international booking
agencies that is commission that is lost to our tourism
sector. This can be up to 10% of the booking cost, and being
zero-rated for GST, means that the accommodation provider
here cannot reclaim GST paid on that commission.
These companies have no vested interest in New Zealand and
our tourism sector. They are only there to clip the ticket.
They charge a commission, which is not reinvested into our
economy, and does not contribute to the wages or taxes which
keep our economy afloat. Many of them are squeezing
accommodation providers hard by forcing them to push down
prices in order to drive sales, a worrying trend in a sector
where profits are under pressure across the board, thanks to
the tough economic climate.
Another aspect of this is a form of "Googlisation"; where
companies with the biggest clout fight to be at the top of
the search list on any online search for accommodation. The
big international companies can use this ability to steer
traffic away from the Kiwi sites, and our tourism sector,
like our economy, contains a lot of small businesses who
struggle to resist the demands of companies far larger than
they are. Perhaps it is timely to consider introducing a
Commissioner for Small Businesses who can go in to bat for
these companies that employ locally, pay taxes and make sure
profits remain within New Zealand.
It is time for the government and the tourism sector to join
forces to figure out how we can stop more cash from flowing
offshore. This is not a problem that has sprung up overnight,
or one that is unique to New Zealand, but it is one that we
should tackle in these tough economic times, where we need to
retain every dollar we can to help our economy.