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Industry has expressed concern over the New Zealand government’s plan to increase the country’s International Visitor Conservation and Tourism Levy (IVL).
The IVL – paid when visitors request an NZeTA (New Zealand Electronic Travel Authority) or apply for a visa – is set to increase from NZ$35 (around AU$32) to NZ$100 (around AU$92) from 1 October. Visitors on Australian and NZ passports are exempt from the fee.
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Introduced in 2019, the IVL aims to “address current challenges in the tourism and conservation systems” by funding various related projects around the country.
NZ’s Minister for Tourism and Hospitality Matt Doocey and Minister of Conservation Tama Potaka said 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,” said Minister Doocey.
“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.”
According to Minister Doocey, 93 per cent of submissions on the IVL supported raising the fee “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,” he said.
“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.”
The International Air Transport Association (IATA), however, has expressed disappointment in the decision, saying it could hurt NZ’s tourism recovery post-COVID.
“It has been a double whammy for the New Zealand travel and tourism sector, starting with New Zealand Immigration announcing steep increases in visa fees, and now the increase in the IVL. These changes make travel to New Zealand more expensive and less attractive and could further delay the recovery in visitor numbers to beyond 2026,” said Dr Xie Xingquan, IATA’s regional vice-president for North Asia and Asia-Pacific (ad interim).
“The travel and tourism sector is an important contributor to the New Zealand economy. The government’s analysis indicated that more than three times of economic activity will be removed from the country for every dollar generated from additional IVL revenue.
“Instead of stifling its development, the government should be looking at ways to improve the country’s competitiveness as a destination compared to other markets.”
The IATA had submitted against raising the IVL, but now wants to see the funds it raises go towards aviation sustainability projects.
“Unfortunately, the government announced the increased levy and its application in the 2024 budget while the consultation process was still ongoing, casting doubt on the process’ effectiveness,” Dr Xie said.
“I urge the government to consider allocating the funds collected to projects that support the decarbonisation of the aviation sector.”
In a statement, Air New Zealand chief executive officer Greg Foran said the carrier supports the government’s intention to “grow trade, tourism and the broader visitor economy”, but expressed concerns over the increase.
“Aviation will play an important supporting role in helping these ambitions to be realised, and Air New Zealand looks forward to playing our part,” he said.
“However, in realising this ambition, it is important that we consider the accumulative impact of increasing cost imposts on visitors in order for New Zealand to remain competitive as a destination. It is very important that New Zealand has its cost settings right.
“This means balancing cost recovery with a broader, joined up strategy aimed at ensuring New Zealand remains competitive with its peers as a destination of choice.”
While Australia does not have a similar fee for incoming passengers, it does have a Passenger Movement Charge for outgoing passengers, which was increased last year.
