New Zealand to nearly triple tax on international tourists

Peak tourism body says hike will make South Pacific country ‘incredibly expensive’ to visit.

New Zealand has announced plans to nearly triple a tax on international tourists, prompting backlash from the country’s tourism industry.

New Zealand’s National Party-led coalition government said on Tuesday that it would raise the so-called International Visitor Conservation and Tourism Levy (IVL) from 35 New Zealand dollars ($22) to 100 New Zealand dollars ($62) from October 1.

Tourism Minister Matt Doocey said the hike would allow the country to grow its tourism industry while ensuring 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.”

“A $100 IVL would generally make up less than 3 per cent 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.

Tourism Industry Aotearoa, the peak body for New Zealand’s tourism sector, said the increase would make the country “incredibly expensive” to visit.

The peak body said the hike, along with a recent 60 percent increase in visitor visa fees, would bring the cost of visiting New Zealand to as much as 500 New Zealand dollars ($310) per person, more than double the cost of visiting Canada and two-thirds more than visiting Australia.

“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 nice to have for a country at the bottom of the world – it’s essential,” TIA Chief Executive Rebecca Ingram said in a statement.

The International Air Transport Association also expressed disappointment, describing the hike as a “double whammy” for the sector.

“These changes make travel to New Zealand more expensive and less attractive and could further delay the recovery in visitor numbers to beyond 2026,” Xie Xingquan, IATA’s Regional Vice President for North Asia and Asia-Pacific, said in a statement.

New Zealand’s previous Labour Party government introduced the levy in July 2019, saying it would help fund infrastructure and ease the strain on services and the natural environment.

Tourism was brought to a screeching halt several months later when the arrival of COVID-19 prompted the government to close the international borders.

While the sector has recovered from the worst of the pandemic fallout, visitors are still only at about 80 percent of pre-COVID levels.

Tourism last year contributed about 13.2 billion dollars ($8.2bn) to New Zealand’s economy, accounting for 3.5 percent of gross domestic, making it one of the country’s biggest export industries.