Tourist levy unlikely as government fears losing out to Australia, Canada

The government remains unconvinced on the merits of a tourist levy. Photo / Mike Scott

The government remains unconvinced on the merits of a tourist levy, with fears it could "turn off the tap" on New Zealand's largest export earner as Chinese tourist numbers drop.

At parliament's commerce select committee on Monday, Tourism Minister Paula Bennett said central government had already stepped into new areas of funding such as carparking and footpaths in recognition of the importance of tourism to regional growth, but that a further levy was unlikely.

"I do seriously worry about the cost of getting to New Zealand, and some of our Chinese travel agents will say a package to New Zealand is more expensive than to Melbourne or to some places in Europe," Bennett said. "That's fine, I don't mind us being expensive, but that doesn't mean our standards are always the same. If that tap went off, that would literally lose jobs."

Ministry for Business, Employment and Innovation figures show Chinese tourism was worth $1.45 billion in the year to March 31, down 17 per cent on a year earlier. The median Chinese tourist spent $3,000 while here, 18 per cent less than a year earlier.

Tourism Board chair Kerry Prendergast told the committee that Chinese tourism has dropped off "significantly" in the last year. The government is watching for the outcomes of deals made by the Chinese government with Canada and Australia to promote tourism into those two countries ahead of 2019 when New Zealand's memorandum of understanding with China kicks in, she said.

Bennett said tourist hotspot Queenstown "cries out" for a bed tax, which would require government permission, but it would be "incredibly confusing" for tourists if there were varying levies around the country. There were also complexities with distributing funds from any tourist levies, she said. Auckland Council introduced a targeted rate on accommodation providers this month, which it plans to use to fund the council agency Auckland Tourism, Events and Economic Development for tourism promotion and events sponsorship.

The cruise industry is also unhappy, Bennett said, with major operators refusing to book beyond the end of 2018 as they don't feel there is sufficient investment in port infrastructure.

"Cruise was down, not significantly but enough that if we don't invest in it, we are going to lose them," Bennett said. "The cruise ships we want the most are the ones that deploy from Auckland - they fly into Auckland, they stay the night in a hotel and spend some money in the city, and the ships get loaded up with our wonderful produce and wine.

"They're not doing that at the same numbers that we want them to, and they've said to me, we're not sure that you're serious about wanting cruise here if you're not willing to invest in the infrastructure we need. I think we've got some big challenges there."