A $278 million government fillip is needed to maintain Queenstown as New Zealand's tourist mecca, a new report shows.

The Queenstown Lakes District Council-commissioned business case, delivered to the Government ahead of this year's Budget, calls for Central Government investment to boost infrastructure and ease pressure on ratepayers.

It found "while strong tourism growth has benefited Queenstown, it has also led to serious capacity constraints and infrastructure pressures, which risk compromising the international visitor experience, constraining future growth, and negatively impacting New Zealand's tourism industry".

There are 34 international visitors to every Queenstown resident.


The report says the council has taken steps to mitigate the issue, but cannot fund the level of investment required without compromising other services.

"At peak times, 58,580 people are using Queenstown's infrastructure, of which only 21,288 are residents."

After weighing up three options, it settled on one that asks the Government to loosen the purse strings to the tune of $278 million over five years.

"The sustained scenario would maintain Queenstown's visitor experience and underpin further growth in international visitors, and would provide a more proportionate balance between the residents and local businesses who fund the majority of tourism-related infrastructure, and the international tourists who benefit from it."

Much of the Crown money would be spent on transport projects and the Town Centre.

If the Government decided against the proposed investment, a bed tax has been suggested as an alternative.

Tourists flock to Queenstown every to marvel at the beauty of the area. Photo/123RF.
Tourists flock to Queenstown every to marvel at the beauty of the area. Photo/123RF.

Mayor Jim Boult has been a strong advocate for a bed tax, but has faced equally strong opposition from some of the resort's accommodation providers, who say it could drive visitors away.

The report also highlights the benefits of Queenstown as a drawcard for the rest of the country.


Visitors who come to New Zealand because of Queenstown spend a total of $1.44–$1.74 billion per year nationally, it found.

But if Queenstown cannot maintain its visitor experience, some of that benefit may be lost, it warns.

Finance Minister Grant Robertson, visiting the resort on Tuesday, told Chamber of Commerce members he was open to the conversation with Queenstown about finding different ways to fund close to $1 billion of infrastructure over the next 10 years.

First, though, he wants to know "what it's for" and says it needs an infrastructure plan.

Three weeks ago Queenstown's council adopted its most ambitious long-term plan, which includes the $327 million town centre masterplan.

It outlines $990m of work to be done between now and 2028, when that work will be done and how the council was planning on funding it.

- Mountain Scene