NEW ZEALAND TRIPLES TOURISM FEE: Travel industry not amused

Starting Oct. 1, New Zealand will raise its visitor fees, nearly tripling the levy to NZ$100 from NZ$35 (about $84 Canadian). The move is designed to support public services (including tourism sites and facilities) and conservation, says the government, but critics claim it will discourage visitors.

Tourism Industry Aotearoa (TIA) said it is “very disappointed the industry’s cumulative voice hasn’t been heard (against raising the fee)” and believes “tripling the International Visitor Conservation and Tourism Levy (IVL) to $100 is a barrier making New Zealand incredibly expensive to visit.”

The government move followed public consultation earlier this year on whether it should remain at $35, or be increased to $50, $70 or $100.

“New Zealand’s tourism recovery is falling behind the rest of the world, and this will further dent our global competitiveness. Airline connectivity isn’t a nice-to-have for a country at the bottom of the world – it’s essential,” stated TIA Chief Executive Rebecca Ingram.

She added, “At a time when the government has goals to grow exports and the tourism industry, MBIE’s own impact model from 2022 shows the increase to a $100 IVL alone could result in 48,000 fewer visitor arrivals and strip out $273 million of visitor spend from the economy. This would create a significant barrier at a time when the industry, our second largest export, is sitting around 80% of recovery.”

“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.”

She continued, “You might say visitors should pay their way – and they are already through the current IVL of $35, and also with GST and their substantial GDP contribution. The ROI on any government investment in tourism is positively rosy given the billions of dollars of GST that the government receives directly from visitors.”

The announcement on the increase to the IVL, has come shortly after a more than 60% increase in government charges for visitor visas which also comes into effect on Oct. 1, with the TIA noting that, including the increase to the IVL, visitors requiring a visa will need to pay up to $500 p.p. to cross the border into New Zealand.

“This means New Zealand is more than double the cost of Canada (around NZ$220pp) and 66% more than Australia (around NZ$300pp) for those visitors. For a family of four from a visa required country, they will now be weighing up costs of around $2,000 to visit New Zealand vs $880 for Canada.”

The International Air Transport Association also criticized the move.

“It has been a double whammy for the New Zealand travel and tourism sector, starting with New Zealand Immigration announcing steep increases in visa fees, and now the increase in the IVL,” said Dr. Xie Xingquan, IATA’s Regional VP for North Asia and Asia-Pacific. “These changes make travel to New Zealand more expensive and less attractive and could further delay the recovery in visitor numbers to beyond 2026.”

During the public consultation process for the IVL, IATA says it provided a submission urging that the IVL not be increased. “Unfortunately, the government announced the increased levy and its application in the 2024 budget while the consultation process was still ongoing, casting doubt on the process’ effectiveness,” said Dr. Xie.

Anthony Saba, VP South Pacific for Goway, which is leading Canadian tour operator selling New Zealand, told Travel Industry Today, “While we don’t like to see such increases, we don’t expect to see much impact on the desirability of New Zealand to Canadian travellers. We are still waiting clarity on how it will be implemented, but we expect it will be built into airfare pricing or via some other means which will see it wrapped up in a total trip cost. New Zealand should remain at the top of travellers minds regardless.”

He added, “Unfortunately, New Zealand is not the only country to impose new taxes, restrictions, or fees in recent years.”

Not everyone entering New Zealand needs to pay the levy. Exemptions include anyone travelling on New Zealand and Australian passports, as well as from many Pacific Island nations, transit passengers, and those holding a New Zealand or Australian resident visa.

The IVL, which was originally introduced in 2019 to ensure tourists were contributing to the costs of tourism in New Zealand, is paid when someone requests a NZeTA (New Zealand Electronic Travel Authority) or applies for a visa.