New Zealand will almost triple the levy it charges foreign visitors, raising concerns that tourists could be put off as the industry struggles to return to pre-pandemic levels.
Tourism Minister Matt Doocey said Tuesday the levy will increase to NZ$100 ($62) from NZ$35, effective Oct. 1. It comes on top of a NZ$130 hike in the cost of visas for those visitors that require them to NZ$341, also from the start of next month.
“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, International Air Transport Association Regional Vice President for North Asia and Asia-Pacific, said in a statement. “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 international visitor levy.”
Tourism was New Zealand’s largest export market before the COVID-19 pandemic, surpassing dairy exports, but it has struggled to recover because of reduced airline capacity and a delay in the resumption of travel from the key Chinese market. The industry is still worth more than NZ$13 billion ($8 billion) a year with about 3.2 million foreigners arriving in the 12 months through June.
New Zealand’s spectacular scenery is often in remote areas where local councils cannot afford to maintain infrastructure, and the government wants visitors to contribute more toward those costs as well as conservation of the environment.
“The new levy 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,” Doocey said.
The government estimates that NZ$100 is about 3% of total spending for an international visitor while in New Zealand, meaning it is unlikely to have a significant impact on arrivals, he said.
But IATA’s Xie said instead of raising the levy, New Zealand should be looking at ways to improve the country’s competitiveness as a destination compared to other markets. He noted that Thailand in June scrapped plans for a tourism tax on air travelers to encourage tourist spending in other areas.
Rebecca Ingram, chief executive of Tourism Industry Aotearoa, agreed.
“New Zealand’s tourism recovery is falling behind the rest of the world, and this will further dent our global competitiveness,” she said. “This would create a significant barrier at a time when the industry, our second largest export, is sitting around 80%” of pre-COVID levels.
