Most visitors to New Zealand will soon have to pay an increased levy to enter the country.
Today, the Government announced it would raise the International Visitor Conservation and Tourism Levy (IVL) from $35 to $100, starting October 1.
The levy, introduced in 2019, is a fee that most visitors entering New Zealand must pay. It ensures tourists contribute to the cost of maintaining the conservation estate.
“The Government is serious about enabling the tourism sector to grow as part of our overall goal of doubling exports in 10 years. 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,” tourism and hospitality minister Matt Doocey said.
“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.”
The Government announced it would be lifting the International Visitor Conservation and Tourism Levy (IVL) from $35 to $100, starting October 1. (Source: 1News)
He said a public consultation carried out by the Ministry of Business Innovation and Employment (MBIE) found that 93% of submitters supported raising the levy.
The Ministry of Business Innovation and Employment (MBIE) recommended an increase to $70 that would balance increasing revenue to cover the cost of tourism and ensuring the levy is not a “deterrent” for visitors.
It also said the implementation of the $100 levy could reduce visitor demand by up to 2.4%.
Doocey said “the main rationale being an increase would be reasonable to help cover the costs of tourism”.
“The new IVL remains competitive with countries like Australia and the UK, and we are confident New Zealand will continue to be seen as an attractive visitor destination by many around the world.
“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.”
Minister of Conservation Tama Potaka said taxpayers already contribute close to $884 million on tourism and conservation per year.
On the increased levy he said: “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.”
Visitors exempt from the levy including NZ and Australian citizens and permanent residents, diplomats and people from many Pacific Island nations.
‘Simply bad policy’ – NZ Airports Association
Reacting to the announcement, the New Zealand Airports Association said the increase “cemented New Zealand as one of the most expensive countries in the world for a holiday today”.
“Increasing the IVL, increasing visa fees, and proposals for new charges on regional airports have landed as a triple-whammy for our sector, which is trying to work hard for New Zealand’s economic recovery,” NZ Airports chief executive Billie Moore said.
“But this is not just about us – this is simply bad policy.”
Moore said it would end up becoming a “money-go-round,” with levies suppressing demand and forcing the Government to spend more through tourism marketing.
“We are struggling to see how this makes sense from a government that wants to be pro-business and pro-growth,” she said.
“Back when the IVL was introduced, the National Party recognised it for what it was – a tax on tourists who already more than pay their own way through billions in GST that goes straight to the Crown.
“Ministers and agencies must look beyond their agency bottom lines and realise that this is not the way a country makes money and grows its economy.
“We urge the government to go back to its roots and get agencies working on policies that will grow tourism rather than stagnate it.”
‘No justification’
The Board of Airline Representatives echoed this, saying it was “extremely concerned” about the increase.
“Lifting the levy from $35 to $100 per person demonstrates the Minister of Tourism does not appreciate the impact of softening demand for destination New Zealand,” said executive director Cath O’Brien.
“IVL consultation material gave no justification for the increased costs to be charged. Quite simply, it is not clear what the increased IVL will be spent on, beyond the need to top up funding for Tourism New Zealand following further cuts in the recent budget. Consultation material provided no evidence for what funds should be spent on.
“New Zealand is a nation famous for its manaakitanga – but our warm welcome has turned into an unjustified demand for payment at the gate.
“Airlines know that sharp cost increases to visas and to the IVL means those who might have visited New Zealand will travel somewhere else.”
