The Court of Appeal has found Auckland Council's controversial bed tax 'invalid'

The targeted rate -- charged to accommodation providers -- is used to fund the operations of the council's tourism arm, and was introduced in 2017.

The judgement says the council doesn't have the power to target visitors directly through a bed tax or a visitor levy.

Hotel Council Aotearoa strategic director James Doolan says accommodation is one small piece of the tourism pie.

He says it was always unfair to make hotels and motels pay an oversized portion of marketing spend.

Auckland Council's reviewing the decision, and won't comment on if an appeal has been made.