LOCAL tourism operators fear a tax on short-stay rental providers will hit their sector hard, at a time that visitations to the region has dropped more than 20 per cent.
Legislation recently introduced to the Victorian parliament will impose a 7.5 per cent levy from January 1, 2025 on short-stay accommodation bookings, including bookings made through platforms such as Airbnb and Stayz.
The government reported there are about 63,000 short-stay accommodation places – with almost half of these in regional Victoria.
The 7.5pc levy is expected to generate $60 million a year for building and maintenance of social and affordable housing – but only 25 per cent of funds will be invested in regional Victoria.
The government said short-stay rentals reduce the number of properties available for longer term accommodation for families who need a place to live.
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Karen Barber, King Valley Tourism Association president, said a lot of the short-stay accommodation owners have mortgages, they're dealing with high interest rates, and council rate rises.
Ms Barber conducts wine tours around the King Valley, Beechworth and Rutherglen and she said the talk on the street is that everybody is down by 30 per cent in retail on top of the visitation decline.
"The government should be encouraging people to visit the regions, but this is just another thing that will have an impact on revenue," she said.
"We've seen a drop in the number of younger people who have the big mortgages but even the retired people, they're being more frugal with their money.
"From what I understand caravan parks will not get hit with the levy, so you're up against that as well."
Alan and Rowena Tainton own 3 Black Sheds accommodation in Whitfield and their business has always been designed for short-stay tourist accommodation.
Like Ms Barber, Mr Tainton said the levy will hit at a time the industry is already doing it tough with less people booking due to the cost of living.
"We've had a huge drop in occupancy post Covid and with the decline in bookings we've had to broadened our scope to attract visitors," he said.
"Where before it was 95 per cent direct bookings with the business, now it's 60pc direct and 40pc with Airbnb and Stayz.
"People are looking for a cheaper price and to get the bookings we have to discount, so not only is occupancy down, but revenue is down.
"I understand the shortage of accommodation for rentals, but 3 Black Sheds was never built for long term rental, it was always short term, so we're not taking space off the market."
Mr Tainton said some businesses in the valley are shutting their doors early, not opening as many days because the numbers are down.
"The throughput of occupancy is a strong indicator of how the valley is doing and if I'm down 20pc, then you can bet every business is down 20pc," he said.
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Wangaratta real estate agent Garry Nash predicts that it will be another tax that will put extra pressure on people in the community who are looking to get ahead financially.
He said the series of taxes the government has been introducing all impact investors, but it has to be a two-way street where the government has to put something back into the tourism industry to encourage people to visit destinations like the rural city.
"Levies such as the short-stay levy are a disincentive and we are starting to see people, who have short-stay rentals, put them on the rental market because they can't make ends meet," he said.
"The levy is likely to have a domino effect with less people visiting the regions, directly and indirectly negatively impacting other businesses and local economies."
