The proposed tourism levy by the eThekwini municipality in KwaZulu-Natal is going to hit hotels, travel agencies, car rental companies, and tour operators.
The proposed levy will also increase the cost of doing business, as there is already a tourism levy that was imposed on these businesses a few years ago.
This information is contained in an internal document meant for the economic development and planning committee to rubber-stamp a proposal to undertake a feasibility study on the proposed levy.
The proposed levy will come as tourists nationally are subjected to a 1% Tourism Levy South Africa, charged to tourists for their use of various travel and tourism services in South Africa.
According to the document, the levy is needed to stop Durban Tourism, the tourism wing of eThekwini, from heavily relying on the municipality for funding, as they claim its budget is limited and it has to fulfil other needs.
Levy based on international models
Durban Tourism is going to use the funds to market the city as a tourism destination both locally and internationally. The proposed levy is based on other successful models in the US, Spain, and Mauritius.
“This [lack of funds] limits the scope for sustained destination marketing, infrastructure development, and large-scale event attractions,” reads the document.
“Without a dedicated and consistent revenue stream, Durban Tourism faces challenges such as limited funding for marketing campaigns, which restricts the ability to compete with other global destinations.
“Inability to host or attract large-scale events: reduce the economic impact and job creation. Insufficient support for tourism product developments hinders innovation and growth in the tourism sector, and overreliance on municipal funding cycles leads to budgetary constraints and inefficiencies in long-term planning.”
It further says that Durban tourism needs this money to reignite confidence in the city after being hit by disasters such as floods, which have become common in the past few years.
The proposal would still have to be taken to stakeholders for input before it is adopted and implemented.