Proposes ACC levy increases will put a significant strain on an already challenged industry, the Tourism Industry Association says.

Chief executive Tim Cossar said under the proposed changes, operators would face increases of up to 100% or more – compounding the challenges many tourism businesses still faced as a result of the global economic downturn.

A ski company employing more than 100 staff would face a $300,000 annual increase, he said.

The association has made a submission asking for a staged introduction to allow businesses time to adjust.

It made a “snapshot” of the effects of the proposal, showing sport and recreation, amusement and outdoor guiding businesses would face increases of around 100%, accommodation, cafes and restaurants more than 80% and bus transport 63%.

“Tourism operators set their prices up to two years in advance. Sudden increases in compliance costs such as those being proposed by ACC are difficult to factor into product pricing,” Mr Cossar said.

“We are also concerned about the wider impact of the ACC levy increases. The rise in levies for wage earners, together with a significant jump in the annual motor vehicle levy, will see real levels of disposable income fall. This could impact negatively on New Zealanders’ holiday plans, at a time when domestic tourism is needed to support our industry.”

New Zealand Hotel Council executive officer Sharon Jennings said the changes would prolong the downturn in demand, as any decrease in disposable income had a direct affect on accommodation.

Hospitality Association NZ (HANZ) chief executive Bruce Robertson called the proposed increases “draconian” and said other measures could be adopted, including cost-cutting.

“In the past 12 months we have had 100 members close their doors and many more are marginal at best and struggling to survive. Given the labour intensive nature of the hospitality industry and the level of these increases, others are likely to fail,” Mr Robertson said.

The Ski Areas Association, which represents 15 commercial ski areas, has asked ACC to consider experience rating and contract with each employer to determine levies based on the employers’ direct cost of claims against the scheme.

Chief executive Miles Davidson said this would provide a fairer assessment of levies.

“We are making every effort to reduce costs and maintain prices. A 100% increase in ACC levies imposed by a government agency works against this effort, and will impact severely on our profitability and future growth.”