Rises in NZ tourism levy and visa fees are ‘double whammy’

The International Air Transport Association (Iata) has criticised the New Zealand government’s decision to increase the International Visitor Conservation and Tourism Levy (IVL).

The levy is currently NZ$35 (£16.50) but will rise to NZ$100 (£47) in October.

Dr Xie Xingquan, Iata regional vice-president for North Asia and Asia-Pacific (ad interim), said: “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.”

Iata said the recovery of the New Zealand aviation market currently lags behind major markets such as Australia, Canada, France, Spain, the UK and the US.

These markets have either recovered to pre-pandemic passenger levels or will achieve full recovery in 2024.

Dr Xie added: “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.”

He noted that Thailand, for example, scrapped plans for a tourism tax on air travellers in June to encourage tourist spending in other areas.
During the public consultation process for the IVL, Iata had provided a submission urging that the IVL not be increased.

“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,” said Dr Xie.

He also said that the government did not indicate how the funds collected by the IVL will be allocated.

“I urge the government to consider allocating the funds collected to projects that support the decarbonisation of the aviation sector.”