The tourism challenge: Too much of a good thing?

The Shotover Jet heads for Edith Cavell Bridge, Queenstown. Tourists are flocking to New Zealand putting pressure on infrastructure.

Tourism goes into the new year making more money than ever but facing big decisions about how to fund its unprecedented growth.

Traffic jams around Auckland Airport this summer have infuriated travellers, tourists have fouled trails on the Coromandel and about a fifth of New Zealanders say they are worried about the impact of too many visitors.

Tourism Industry Aotearoa chief executive Chris Roberts said there were concerns about sustainability.

"We know and acknowledge that there is rising public and industry concern that tourism is growing faster than our ability to cope," he said.

"Without a co-ordinated response from industry and central and local government, we risk being unable to fully capture the future potential of tourism and protect the long-term sustainability of our industry."

In the past year, more than 3.4 million visitors arrived and with a bumper summer season in full swing new records are forecast.

The country's biggest tourism business, Air New Zealand, reported a record profit and Tourism Holdings' shares increased by nearly 70 per cent to levels last seen in 1993.

Total annual tourism revenue has grown from $28 billion to $34.7b in just two years.

New Tourism Minister Paula Bennett has served as an associate in the portfolio but will face having to make a tough call on whether to fund facilities by imposing new taxes.

A powerful group of tourism leaders has got behind a push for the Government to contribute $65m a year to a dedicated infrastructure fund - to match funding by a bed tax and a $5 increase in the border levy.

The bed tax suggestion has been floating around for some time and while those in the accommodation sector have raised concerns about how it would be collected and how they would be disadvantaged, it will be seriously considered by the Government.

The possibility of charging more for overseas visitors to use national parks will also be on the agenda.

And the Government will face renewed pressure as a TIA report detailing the infrastructure deficit - especially in small centres - is unveiled early in the year.

Roberts said every issue the country has, arises from challenges of that growth where the contribution of tourism has grown from $28b a year to $35b during the past two years.

"In that regard they're nice problems to have. Key amongst those are early signs of public concern about the growth rate of tourism and where we can cope as a country," he said.

"We are very aware of that social licence to operate."

A survey for the TIA and Tourism New Zealand showed 19 per cent of respondents were worried the country may be attracting too many tourists.

Its possible overseas visitors could be charged more to use nation parks like Tongariro National Park in the Central Plateau.

This was up from 13 per cent in a previous survey with road accidents and traffic congestion the top concerns. Overcrowding, a lack of infrastructure and environmental impacts were also mentioned.

"There are a small minority of visitors causing those concerns but we acknowledge the public gets very concerned about them," said Roberts.

John Pask, an economist with BusinessNZ, said that although bed taxes were common overseas there are risks.

"A bed tax would be fairly discriminatory against a small group of service providers [i.e. those providing beds] given that tourists consume a wide range of other services when they are here. Also, many people using accommodation aren't tourists but locals on business or holiday," he said.

Taxing tourists an additional amount on arrival or departure would be administratively simple.

"But there are dangers in simple overlays of additional tax - which tend to get siphoned into funds which over time attract uses other than originally intended."

Pask said that as a general principle, additional taxes were pretty much always bad news and there were good reasons to keep New Zealand's relatively simple broad-based tax system.

"Allowing one new tax always encourages calls for more, and allowing a new tax in one new industry [like tourism] sets a precedent for taxing any other new industries that might become established."

Roberts said a dedicated infrastructure fund advocated in the McKinsey report for the heads of Air New Zealand, Christchurch and Auckland airports and Tourism Holdings would need some very strong governance.

"How the money is collected is going to be open to a lot of debate. The Government's increasing tax take from tourism suggests that they should seriously thinking of funding it [all] themselves."

There's also a persistent issue facing the tourism industry; the honesty of the 100% Pure New Zealand promotion.

Lord of the Rings actor and New Zealand tour guide operator Bruce Hopkins is not surprised, calling our rivers and lakes "gutter holes" and "sewer pipes".

Bennett has defended it. She told National Radio: "When it comes to our image overseas New Zealand is seen as clean and green and why on earth should we get rid of something that is working and marketing us so well."

Incoming Tourism New Zealand chief executive Stephen England has said he will learn more about the 18-year-old campaign when he joins the organisation in April, but is a supporter.

"I don't think we're being dishonest at all - I think what we have to do is figure out the right path for the nation because it's not just about tourism - it's about industries and agriculture."