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A 5% visitor levy would raise $22.5 million a year for easing the burden of infrastructure on Queenstown Lakes district ratepayers, the council says.
At a media briefing on the proposed levy this morning, Mayor Jim Boult said the council would have needed to impose an 8.3% levy to cover the estimated costs of providing that infrastructure.
But consultation with the accommodation sector had convinced the council to go with the lower level.
For a $250 a night hotel room, that equated to $12.50, or $6.25 if shared by two people, Mr Boult said.
"Many people spend that on one drink at a bar.''
The council announced on March 7 this year it would hold a non-binding referendum for residents and ratepayers on the levy.
Voting papers will be sent to households between May 14 and 19.
The levy would not be introduced before July 1 in 2021.
Mr Boult defended the council's lack of analysis on the impact of a levy on visitor numbers.
"Six bucks - is that going to stop you coming here?
"It's been introduced in umpteen places around the world, and it's been proven to have absolutely no effect."
Since announcing the referendum, the council had been refining the proposal with government officials and independent tax advisers.
Council regulatory and finance general manager Stewart Burns said its analysis estimated the cost of providing services for visitors over the span of its 2018-2028 long-term plan at $374 million.
Revenue from the levy would reduce the council's projected debt by 39%, therefore lowering interest costs, and would give the council scope to reduce the rates that accommodation providers paid compared to other ratepayer sectors.
Mr Boult said the Government had not indicated the level of support it wanted to see in the referendum, but he wanted "very strong'' support. It was important for people to "stand up'' and make the effort to vote.
Mr Boult said he would prefer to see 55% support from a 90% voter response, than 80% support from a 50% response.
