New Zealand Plans to Triple Tourist Tax in October

New Zealand will nearly triple its entry tax for international tourists starting in October to generate more money for environmental conservation projects. However, the travel industry worries the $62 fee will deter visitors and harm a sector still struggling with the aftereffects of the pandemic.

Rising Entry Tax

The country’s International Visitor Conservation and Tourism Levy (IVL) was introduced in July 2019 to offset the effects of tourism on the country’s environment and infrastructure. It’s paid at entry by tourists from most countries, excluding visitors from Australia and nearby Pacific nations.

Initially set at NZ$35 ($22) per person, the tax will rise to NZ$100 ($62) on October 1 to “ensure visitors contribute to public services and high-quality experiences while visiting New Zealand,” the government said in a statement.

Photo: Auckland, New Zealand. Courtesy of Sulthan Auliya / Unsplash

“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,” Matt Dooley, New Zealand’s Minister for Hospitality and Tourism, said.

The levy ensures those visitors “contribute to high-value conservation areas and projects, such as supporting biodiversity in national parks,” he added.

Industry Concerns

However, the travel industry, including the Tourism Industry Aotearoa (TIA), worries that the “incredibly expensive” tax will discourage tourists from adding New Zealand to their itineraries.

“New Zealand’s tourism recovery is falling behind the rest of the world, and this will further dent our global competitiveness,” said Rebecca Ingram, chief executive of TIA.

Photo: Air New Zealand, Airbus A320 tails. Courtesy of Douglas Bagg / Unsplash

TIA pointed to data from the Ministry of Business, Innovation and Employment (MBIE), which found that a NZ$100 levy could deter 48,000 visitors annually and cost the country NZ$273 ($168) million in tourist spending annually.

Many of those tourists could go to the UK or Canada instead, where there are more flights and entry costs are lower, the group warned.

Impact on Tourism

The group said the tourist industry has struggled to recover after New Zealand fully re-opened to visitors in August 2022. Tourist numbers remain at around 80 percent of pre-pandemic levels, and travel export receipts for the year ending in June were 5 percent down.

Compounding the burden for some travelers, New Zealand will also hike the cost of tourist visas required for some visitors on October 1.

New Zealand / Photo: Jon Ingall/Alamy Stock Photo

While citizens of 60 countries and territories, including the United States, are eligible for visa waivers, allowing them to stay for up to three months, holders of other passports will soon have to pay $211 for tourist visas, up from $131 today. That includes tourists from China, one of the largest sources of visitors to New Zealand.

Visa Cost Hikes

The planned fee hikes mean travelers who require visas could face charges of up to NZ$500 ($307) per person to enter New Zealand, TIA said. In comparison, tourists with visas entering Canada pay less than half that (around $135 per person), and those visiting Australia pay 40 percent less ($184).

New Zealand is also mulling increasing charges on regional airports, which would drive up airfares.

Photo: Air New Zealand, ATR72. Courtesy of Will Waters / Unsplash

Billie Moore, NZ Airports chief executive, said the three hikes would be “a triple-whammy for our sector, which is trying to work hard for New Zealand’s economic recovery.”

Tourism Minister Doocey rejected the argument that increased charges would keep visitors away, saying that the NZ$100 tourist tax makes up less than 3 percent of the country’s average spending.

He said he’s “confident New Zealand will continue to be seen as an attractive visitor destination by many around the world.”