Auckland's controversial bed tax has survived a legal challenge in the High Court after a claim the multimillion-dollar rate is unlawful was rejected.
Auckland mayor Phil Goff's policy was under attack from four major hotel owners who went to court claiming the rates were unfair.
But today a judgement released by the High Court ruled in favour of the targeted rates.
The tax applies to hotels, motels, serviced apartments and online accommodation providers like Airbnb if they're rented for more than 28 nights per year.
It raises $14 and a half million annually, which the council uses to help promote tourism and hold major events.
"Before the ratepayer was paying the full amount. Now the industry that's benefitting the most is sharing in the cost of doing that promotion," Mayor Phil Goff told Newshub.
The four hoteliers wouldn't be interviewed but in a statement said they're disappointed by the decision. They say they're reading through the judgement and aren't ruling out an appeal.
"When a visitor comes to Auckland...they spend money on tourist attractions, restaurants. It seems very unfair that hotel owners should have to foot the entire bill on behalf of the industry," New Zealand Hotel Owners Association Executive Director Amy Robens told Newshub.
Robens said tourism is already taxed more heavily than other export earning industries.
"Hotel owners are spending hundreds and millions of dollars in developing and building hotels and tourism infrastructure. They shouldn't be thwarted with bed taxes and targeted rates," Robens said.
But Mayor Phil Goff says without major events like next year's America's Cup, those hotels wouldn't fill up.
Now that the court agrees it's a price businesses will have to pay.
