Govt signals possible price hike for international visitor levy

One of our biggest tourism hotspots has raised questions over the Government's assumption that it will soon make extra revenue off a tourism and conservation visitor fee.

This year's budget has signalled the International Visitor Levy (IVL) will be hiked – despite still being under public consultation.

The rate is currently $35 per eligible person who has entered the country at the border. The levy excludes Australia and some Pacific Island nations.

Under the review, the fee could stay the same or be hiked to $50, $70 or even up to $100.

The Government has already counted an increase, according to Thursday's Budget 2024 books, and has forecast tens of millions of dollars more every year.

Finance Minister Nicola Willis told journalists at the Budget announcement: "By having a fair level, we can make sure tourists are contributing to keeping up our national parks and keeping regional infrastructure going."

But Queenstown-Lakes mayor Glyn Lewers told 1News announcing a possible increase during the consultation period "raises a few questions".

"What's the consultation for?"

The levy was opposed by National when it was introduced by the then Labour government in 2019.

Tourism Minister Matt Doocey defended the possible price hike, saying there is a "statutory requirement" for the levy to be reviewed every five years.

"Five years ago it was initiated at $35. I've seen advice that shows with today's inflation it should largely be around $42.15," he said.

The figure is a lot less than the options proposed to increase the levy.

The funds are split for both conservation and tourism purposes – but some towns say more support is needed for basic infrastructure.

Doocey said he was aware of the concerns, saying, "We have an issue around mixed-use infrastructure".

"Think of Queenstown. Low rate base, high tourist numbers."

The latest census data shows Queenstown-Lakes District has nearly 50,000 residents but 3 million visitors a year.

But while tourism numbers are back to 85% of pre-Covid levels, Lewers said the levy has so far delivered "zero benefit" to the region.

"If we are to continue with the International Visitor Levy, we would like to see it distributed amongst the 30 destination management plans apportioned to visitation," he said.

The council has long pushed for a Bed Tax instead so the town can spend the money as it chooses as rates alone cannot cover all the necessary infrastructure and services.

Mark Rose from The Rees Hotel in Queenstown told 1News the Bed Tax did not sit well with him.

"It's very 1980s," he said. "There are other ways that have been looked at [including] a percentage on every credit card spend that is from overseas, so if you have a foreign credit card it automatically gets taxed."

Tourism Industry Aotearoa wants the Government to consider any fee change carefully.

Chief executive Rebecca Ingram said, "We care about how it's spent – we want to ensure it is transparent, it solves problems, and it's really making a difference to New Zealand."

Doocey said reports he had seen suggested the country has "a deficit of around $200 million a year for mixed-use infrastructure for tourism".

"We need to look hard about how we support that."

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