The International Visitor Conservation and Tourism Levy (IVL) will be raised to $100 from October 1 to ensure visitors contribute to public services and high-quality experiences while visiting New Zealand.
“The Government is serious about enabling the tourism sector to grow as part of our overall goal of doubling exports in 10 years. International tourism plays a hugely important role in the New Zealand economy, with international visitors spending over $11 billion in the year ending March 2024,” says Minister for Tourism & Hospitality, Matt Doocey.
Community Costs
“But 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.
“The IVL was introduced in 2019 as a mechanism to ensure international visitors were contributing directly to these costs, the vast majority of which are paid for by New Zealand taxpayers and ratepayers.”
“Public consultation by the Ministry of Business Innovation and Employment (MBIE) found 93 per cent of submitters supported raising the IVL, with the main rationale being an increase would be reasonable to help cover the costs of tourism.
“The new IVL 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.
“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.
“Increasing the IVL means we can continue to grow international tourism to support economic growth while ensuring international 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,” Mr Doocey says.
TIA – Significant Concerns
The decision on the level of the IVL comes hot on the heels of a 62% increase to some Immigration Visa and levy charges, along with cuts to Tourism New Zealand’s budget. Tourism Industry Aotearoa members have expressed significant concern at the fast-increasing cost of entry at the border and the barriers this creates.
“By our calculations, a $100 IVL could result in 48,000 fewer visitor arrivals and strip out $273 million of international visitor spend from the economy. This would create a significant barrier at a time when the industry, our second largest export, is sitting around 80% of recovery,” TIA Chief Executive Rebecca Ingram says.
The industry cares about the IVL and the role it can play in funding gaps. Following engagement with its members, TIA said $50 was the fairest option if the IVL had to be raised, as this considered inflation and ensured appropriate funds for investment in key tourism infrastructure and conservation projects.
“Tourism is a global business and we are motivated to ensure New Zealand is competitive when high-quality visitors are making choices about where to go on holiday. We are particularly concerned about the cumulative effect of these fees, which we believe will have a material impact on visitor numbers, a vital workforce and the economic contributions they bring,” Ingram says.
Pays GST
Data shows that international visitors are more than paying their way. In the year to March 2023, tourism directly and indirectly generated about $22.1 billion for the economy (GDP) and international visitors contributed $1b in GST. Tourism is the only export sector that pays GST.
“We care about the contribution tourism makes to New Zealand and we are not alone. 93% of New Zealanders believe international visitors are good for New Zealand.”
There is also a wider conversation that must be had about tourism funding. While funds for tourism are welcome, the IVL is only one part of this solution.
“The IVL is a blunt instrument and using it as a panacea for all tourism funding requirements, and raising it to a very high level, is not the answer. Nor does it solve the problem of ensuring local councils and communities can invest in the tourism-related infrastructure they need,” Ingram says.
The industry is motivated to work with the Government and local government on solving this long-standing issue and impediment to progress by looking for new funding sources.
“We strongly support more elegant solutions that collect additional revenue while visitors are travelling through the country and do not present a large upfront cost when considering New Zealand as a destination.”
