The council’s draft long-term plan proposed an annual 3.2% increase, but the DQ board announced last month it wanted an additional 6.8% — taking the total to 10% — over the next three years.
The funding is collected through the targeted tourism promotion levy, which is applied to commercial rates in Queenstown.
Mr Budd said the last time DQ’s funding was increased was in 2008 — the 60% increase resulted in a $1 million annual boost, although much of that had been absorbed by operational costs, meaning marketing activity had remained "stagnant".
The funding was sought to ensure the regional tourism organisation could continue to market the resort domestically and use other opportunities with key partners, including Tourism New Zealand.
Following two member forums on the proposal, members were asked to vote at a meeting in Queenstown on Wednesday night.
DQ needed 75% in support to advance the proposal but only 67% were in favour.
Board chairman Matt Hollyer asked the 51 members at the meeting if they would be more comfortable with asking for a 5% or 7.5% increase instead. That question was met with silence.
Amity Lodge owner Doug Champion questioned the need for DQ to continue marketing Queenstown given technological advances and that businesses already did their own marketing.
He felt the additional money being sought by DQ would be better spent on more rubbish bins and boosting police numbers.
"Council are struggling just to clean the streets. It’s becoming a slum and I’m embarassed to see this town deteriorate the way it is.
"We don’t need to [encourage] more people when we can’t even handle what we’ve got."
However, Totally Tourism general manager Tim Barke said if DQ did not have sufficient funding available it would struggle to target the "high value" visitors Queenstown desired.
"Trying to get the right people here that are the right fit for our community ... they can’t do that on a shoestring.
"If you strangle them, we’re just going to get more of what you’re talking about.
"If we don’t have the funding ... we’re going to get the wrong sort of people here," Mr Barke said.
After the meeting, Mr Budd told the Otago Daily Times he was "surprised" at the vote.
"Ultimately, it boiled down to 60-something people turning up at our meeting.
"Perhaps we didn’t have the right mix."
The decision meant DQ would have to "compromise" on some of its marketing plans for the next three years and would now work on amending its business plan to reflect the lower level of funding available.
"We are still going to get a small increase.
"We can all get on and do great stuff for Queenstown and we will.
"If you like, it’s business as usual."
