Hoteliers in Rotorua are warning a proposed rates increase could lead to job losses and deter new tourism operators from investing in the area.
The proposal is to change from a system where rates are calculated on the value of land, to a capital value rating system.
Rotorua's Heritage Hotel general manager Marcus Keenan says it would mean mean a rate increase of between $90,000 and $100,000 a year for his business.
Mr Keenan says for some hotels the change would equate to a 48% year-on-year rates increase, which means operators would struggle to cope, and there could be job losses.
The Tourism Industry Association says new entrants to Rotorua's tourism market, especially international hotel chains, could be put off.
Rotorua District Council will hear submissions on its rating review next month.