Hold on to your wallets, folks. New Zealand is about to slug international tourists with a new tax hike that’s anything but gentle.
As of October 1, the Land of the Long White Cloud is nearly tripling its International Visitor Conservation and Tourism Levy (IVL), from NZD 35 to NZD 100.
New Zealand’s government, under the stewardship of the National Party, is pitching this tax hike as a double whammy of good news: it’s meant to bolster conservation efforts and enhance the visitor experience. In other words, your extra $65 will supposedly go towards maintaining those stunning vistas and national parks that make you want to pack your bags in the first place.
Tourism Minister Matt Doocey has argued that this increase is a drop in the ocean compared to overall visitor spending, predicting it will constitute less than 3 per cent of a tourist’s total expenditure. This, he assures, should not deter travellers.
However, the reality is more nuanced.
Cue outrage from the Tourism Industry Aotearoa (TIA), the sector’s peak body. According to TIA, this hike is akin to putting a ‘For Sale’ sign on New Zealand’s tourism industry. Adding the new levy to the recent 60 per cent increase in visitor visa fees, a trip to New Zealand could now set you back NZD 500—a steep price compared to visiting Canada or Australia.
The levy does not apply to Australians. But the ripple effect of all the new levies being imposed is partially blamed for the slow down in ships coming to Australia.
Rebecca Ingram, CEO of TIA, is less than thrilled. She argues that this latest move is a severe blow to New Zealand’s competitiveness on the global stage, especially as the country is struggling to recover from the pandemic’s tourism slump.
Earlier this year New Zealand also made a decision to slap an 88 per cent increase on “customs border processing” fees for cruise passengers. This move comes as the country is grappling with a 22 per cent decline in cruise passenger numbers. Just when New Zealand was trying to attract more US-based cruise lines, it’s effectively building a moat of fiscal barriers around its shores.
This tax hike on cruise passengers is particularly ill-timed. With costs soaring and new charges set to hit in December, cruise lines are left scrambling to absorb the costs. Unfortunately, they can’t pass these new charges onto passengers whose itineraries are already set, making this a lose-lose situation for the industry.
New Zealand’s ambitious conservation funding strategy might be noble, but the execution is, well, problematic. While the government insists the increased levy won’t dramatically impact visitor numbers, the tourism sector is sceptical. The combination of rising fees and stringent regulations could dampen New Zealand’s appeal as a tourist destination.
There’s also the broader context of New Zealand’s tourism recovery, which is lagging compared to other regions. With visitor numbers still at around 80 per cent of pre-pandemic levels, this tax hike could very well be the final straw for potential tourists who might choose to vacation elsewhere.
While New Zealand is betting that a higher tax will translate into enhanced conservation and visitor satisfaction, the immediate aftermath might be a more significant challenge. For now, if you’re planning a Kiwi getaway, brace yourself for a heftier bill.
