Carbon tax pinches hotels for $115m
The carbon tax will hit the accommodation industry with costs of almost $115 million in its first year of operation, a new report has revealed.
The AEC Group research, commissioned by Tourism Accommodation Australia (TAA), showed the levy, implemented in July, will also see the sector's profitability shrink by up to 12% over the same period.
TAA managing director Rodger Powell confirmed the sector is struggling to cope with the additional tax burden, with the costs coming "straight off the bottom line".
"The ultra-competitive nature of the industry means that operators simply can't pass on their increased costs to consumers," he said.
"This is compounded by the fact that price competitive international destinations are not subject to a carbon tax by their governments."
In addition, the report revealed the tax as a "significant risk" to accommodation investment, estimating the impact on hotel profit margins and the sector's overall outlook would cause the value of a benchmark 200-room hotel to fall by up to 16.5%.
The decline will put at risk efforts from the industry and Tourism Australia to attract investment in new and upgraded properties from overseas, according to Powell.
"TAA's position is that this inefficient tax needs to be repealed to put Australia's accommodation industry back on a more level playing field with international competitors and other investment classes and to facilitate opportunities to attract new investment in high-quality accommodation stock," he said.
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