It is about to get more expensive to visit and do business in New Zealand

21 June, 2018

Tourists visiting New Zealand are about to face a price hike with the introduction of a new tourism tax, known as the International Visitor Conservation and Tourism Levy. The fee of between NZD25 and NZD35 (USD17.2 and USD24.1) has been slated to assist environmental and infrastructure pressures facing the country.

The tax is expected to provide an additional NZD57 million to NZD80 million (USD39.4 million to USD55.4 million) a year, and according to New Zealand Tourism Minister Kelvin Davis it is likely be in place by the end of 2019. The tax will be added to all visiting tourists (visiting for 12 months or less) except Australian citizens and permanent residents, people from Pacific Islands Forum countries, and children under two.

Reaction to the international levy has been cautiously optimistic, with a general consensus that more money is needed both to cater for increased tourist numbers and to protect the environment.

Visa fees and immigration levies are also set to increase, hitting business travellers and those looking to move to New Zealand the hardest. This includes proposed increases on work visas (up by 54%), as well as on visitor visas (up by 10%) and immigration levies for those moving to New Zealand (up by 43%).

On 14-Jun-2018 the New Zealand Government launched a consultation process on these changes, which will affect many international visitors travelling to New Zealand. It will be interesting to see the results of this process once it closes on 15-Jul-2018.

Reactions from the industry

Tourism Export Council of New Zealand (TECNZ) said New Zealand inbound tourism operators and key tourism suppliers are "heartened" that the country's levy will be used to improve tourism infrastructure and also to support conservation. TECNZ reported (18-Jun-2018) the results from its member survey about the proposed international visitor levy and the key findings include:

  • Overall support for the levy.
  • On the proviso that the money is invested back into the tourism industry.
  • The two predominant areas of agreed expenditure were:
    • conservation;
    • infrastructure.
  • Government is the preferred organisation to control payment and distribute funds to ensure correct management and transparency.
  • Assuming the money is used wisely - being focused on fully supporting the growing tourism industry - the majority of members felt positive about the levy proposal, saying that it has the potential to manage resources better in the tourism industry.
  • Those members not in favour cited key reasons being:
    • a lack of understanding about the levy;
    • concerns that this additional fee would make NZ too expensive in the international travel market, resulting in a decline in tourist numbers.

Tourism Industry Aotearoa (TIA) CEO Chris Roberts said the New Zealand tourism industry would like to be consulted on how funds from the proposed tourist levy would be allocated and invested.

Mr Roberts said that the body's key priority is to ensure that revenue raised is "directed to where it can do the most good, relieving pressure on infrastructure and ensuring we continue to deliver outstanding visitor experiences".

Mr Roberts also stated that international visitors would be "more accepting of being charged to come to New Zealand if they can clearly see it is going to support infrastructure and services that enhance their visit".

New Zealand Recreation Association (NZRA) welcomed the tourist levy, with NZRA CEO Andrew Leslie stating that the increase in visitors to New Zealand came with "associated costs and pressure points that need to be addressed", notably in the areas of recreational infrastructure and access.

Mr Leslie noted that the Department of Conservation was bearing the burden of this and funding for the department "has not been adequate to cope with the pressures" placed on infrastructure.