An international tourism levy charged to visitors to New Zealand will increase to $100 – a jump of almost 200% – in a decision the Government believes will help boost economic growth and support conservation.
But it has some in the sector concerned the increase will be a barrier to visitors coming to New Zealand.
The International Visitor Conservation and Tourism Levy (IVL) is currently set at $35 and is charged to most tourists, people on working holidays, some students and some workers coming to New Zealand.
The levy goes towards maintaining public services utilised by tourists during their stay in New Zealand and supporting tourism sites.
The Government consulted on the increase and says 93% of submitters supported raising the IVL, with many believing an increase was reasonable to help cover tourism costs, Tourism and Hospitality Minister Matt Doocey said.
“The Government is serious about enabling the tourism sector to grow as part of our overall goal of doubling exports in 10 years,” Doocey said.
“International tourism plays a hugely important role in the New Zealand economy, with international visitors spending over $11 billion in the year ending March 2024.
“But international tourism also comes with costs to local communities, including additional pressure on regional infrastructure and higher upkeep and maintenance costs across our conservation estate.”
He said the new rate, which comes into effect on October 1, was competitive with other countries like Australia and the United Kingdom and the Government believed New Zealand would remain “an attractive visitor destination”.
“A $100 IVL would generally make up less than 3% of the total spending for an international visitor while in New Zealand, meaning it is unlikely to have a significant impact on visitor numbers,” Doocey said.
“Increasing the IVL means we can continue to grow international tourism to support economic growth while ensuring international visitors contribute to high-value conservation areas and projects, such as supporting biodiversity in national parks and other highly visited areas and improving visitor experiences on public conservation land.”
Speaking to NewstalkZB, Doocey said advice he’s received showed “this won’t significantly impact” the number of tourists arriving in New Zealand.
“The Government’s got an ambitious target to double exports over the next 10 years. I’ve tasked Tourism New Zealand with growing the value of international tourism by $5 billion over the next four years in off-peak and shoulder season. I want to grow tourism, but I want to do that with social license.”
But Rebecca Ingram, chief executive of Tourism Industry Aotearoa (TIA), said the move was disappointing and would “dent our global competitiveness”.
She said modelling had found the increase could result in 48,000 fewer visitor arrivals, taking $273 million of visitor spending out of the economy.
“So far, we’ve received no signal from government on its investment plan for the increase in funds from the levy. We need transparent, meaningful spend that makes New Zealand better and ensures our tourism offering is world-class.
“Visitor expectations will be significant, we invite the Government to work with industry on a plan for how the money is spent to improve the visitor experience and solve problems.”
The Government said proposals for investment would be considered in due course.
The Board of Airline Representatives (BARNZ) is also “extremely concerned” about the hike, saying it showed the Government didn’t “appreciate the impact of softening demand for destination New Zealand”.
“Airlines know that the outlook for inbound tourism to New Zealand is soft,” said executive director Cath O’Brien.
“As we look ahead to what should be New Zealand’s peak season, we see just 2% growth of air services to New Zealand’s international airports year on year. New Zealand’s aviation recovery is now the laggard of the Asia Pacific Region.”
The IVL was introduced in 2019 to ensure tourists were contributing to the costs of tourism in New Zealand.
Conservation Minister Tama Potaka said taxpayers already contribute about $884 million a year on tourism and conservation.
“This money funds Tourism New Zealand, protects biodiversity within the Department of Conservation estate and provides quality experiences at the likes of Milford Sound, Aoraki/Mt Cook and the Tongariro Alpine Crossing.”
Not everyone entering New Zealand needs to pay the levy. Those exempt include anyone travelling on an Australian or New Zealand passport, a passport from many Pacific Island nations, transit passengers, and those holding a New Zealand or Australian resident visa.
The IVL is paid when someone requests a NZeTA (New Zealand Electronic Travel Authority) or applies for a visa.
Jamie Ensor is a political reporter in the NZ Herald Press Gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub Press Gallery office.