Tourism operators concerned levy hike will deter travellers

• Tourism operators are concerned increasing the levy will be another barrier for travellers
• The current $35 levy will be increased from next month after undergoing a review
• The majority of the 1101 submissions supported an increase
• Minister Matt Doocey says he was advised there would be no significant decrease in visitors
• There are calls for better transparency to ensure funds go where they are needed

Hiking the international visitor levy to $100 may deter some travellers who are already facing increased costs to come to New Zealand, tourism businesses say.

It has been five years since the $35 levy was introduced and following a review, the government announced the increase on Tuesday.

Rotorua Canopy Tours general manager Paul Button expected the increase but said he was still disappointed.

"Tourism's got the real opportunity to grow and contribute to increase the exports for New Zealand and we've just put another barrier to entry," Button said.

He was worried those who did travel here would restrict their spending after facing more costs to enter the country.

The levy was aimed at helping to address the visitor pressures faced by tourism and conservation.

He acknowledged that a lot of tourist destinations have low ratepayer bases, but said he was not convinced the levy was the best way to take pressure off ratepayers.

Most travellers need to pay it but Australians - our largest visitor market - do not.

"You're cranking this levy, but one of your major markets don't actually pay to come so it's not a one size fits all," Button said.

He supported finding alternatives that meant travellers spent more while they were in the country, saying there was more value in generating GST and business in communities than hitting their wallets before they get here.

Backpacker Youth Adventure Tourism Association chairperson Haydn Marriner was not happy with the timing.

"It felt like it had been sprung as opposed to a kind of consultative process where we would have hoped that partnership between industry and government would have yielded something ... with at least a little bit more warning," Marriner said.

He was onboard with the levy, and said visitors were happy to contribute, but he had an issue with the significant increase and where the money would go.

"The issue we've all got with the (levy) is that we don't know what it's for," he said.

"It's an opaque fund that has no application process, no transparency around its use. It just says 50 percent goes to conservation ... and 50 percent goes to tourism, and that's it."

The association had proposed a dynamic pricing model where the levy be raised for peak season and reduced to attract visitors in the shoulder seasons, he said.

The youth market had been slow to recover and increases in costs made travel more difficult as it was very price sensitive, he said.

He did not expect to see the impact on arrivals as many visitors would already have pre-booked their long haul trip, but he was worried new travellers would be deterred by the cost.

iFly Queenstown owner Matt Wong said the levy hike came at a challenging time for the still recovering sector, especially for parts of the industry that set their prices one to two years in advance.

"The market is really price sensitive at the moment. There's a lot of competition from international so it may put off quite a few visitors," he said.

He was not against an increase to the levy, especially in light of inflation and rising costs, but he did not believe the $65 increase was justified.

His district had not received specific funding from the levy to address the infrastructure facing the area, despite its well documented challenges and limited ratepayer base, Wong said.

"I'd like to see some really good transparency around where the (levy) will actually be spent.

"It should go towards tourism infrastructure to solve some of the community issues that we've been seeing that tourism has brought onto the community."

International traveller spending remains below pre-Covid levels

New government figures show the international visitor spending is 85 percent of pre-Covid levels over a year.

The latest International Visitor Survey for the June quarter showed international tourism contributed $2.6 billion to the economy.

That was up about 17 percent from the same quarter last year.

International tourism generated $11.6b for the year ending in June, becoming the second highest export earner after dairy.

Visitor numbers have rebounded to more than 80 percent of pre-pandemic levels, with the growth in spending now aligned to the increase in arrivals.

Tourism and Hospitality Minister Matt Doocey said tourism was a key part in the government's plans for the economy.

"These results will be welcome news for tourism and hospitality businesses who have been doing it tough over recent years. While the economy faces challenges, tourism will play a critical role in our recovery," he said.

Listen: Lack of transparency with vistors levy - Queenstown mayor

From Checkpoint, 5:14 pm on 4 September 2024 

It's a vote of slim to little confidence in both the government's super sized visitor levy and who will benefit from the cash... according to the Mayor of one the country's tourist hot spots. From next month, the international visitors tax will go from $35 to $100 a head. Queenstown Mayor Glyn Lewers told Lisa Owen there's a lack transparency about where exactly the money is going and his district has had next to none.