Tourism Industry Aotearoa has assessed the potential impact of a NZD $100 International Visitor Levy and it makes for uncomfortable reading.
Earlier this year, the Government opened a consultation on the International Visitor Levy and whether it should be $35, $50, $70, or $100 for most visitors. A Government decision on the International Visitor Levy is pending.
“According to our calculations, an NZD $100 International Visitor Levy could result in 48,000 fewer visitor arrivals and strip out NZD $273 million of international visitor spending from the economy. This would create a significant barrier at a time when the industry, our second largest export, is sitting around 80 percent of recovery,” TIA Chief Executive Rebecca Ingram said.
The industry cares about the International Visitor Levy and the role it can play in funding gaps. Following engagement with its members, TIA said $50 was the fairest option if the International Visitor Levy had to be raised, as this considered inflation and ensured appropriate funds for investment in key tourism infrastructure and conservation projects.
The pending decision on the level of the International Visitor Levy comes hot on the heels of a 62 percent increase to some immigration visa and levy charges along with cuts to Tourism New Zealand’s budget. TIA members have expressed significant concern at the fast-increasing cost of entry at the border and the barriers this creates.
"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 said.
"We urge the Government to factor in the significant economic benefits that international visitors bring and our export earnings, rather than focusing solely on cost recovery at the expense of our tourism sector.”
She added that the TIA assessment was that it could cost around NZD $500 per person in Government border charges for some visitors, before they have spent a dollar in New Zealand if the International Visitor Levy lifts to $100.
Data shows that international visitors are more than paying their way. In the year to March 2023, tourism directly and indirectly generated about NZD $22.1 billion for the economy (GDP), and international visitors contributed NZD $1 billion 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. Ninety-three percent 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 International Visitor Levy is only one part of this solution.
“The International Visitor Levy 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 added that the industry was motivated to work with the government and local government to solve 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 travel through the country and do not present a large upfront cost when considering New Zealand as a destination.”
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