The International Air Transport Association (IATA) has voiced its disapproval of the New Zealand Government’s decision to raise the International Visitor Conservation and Tourism Levy (IVL). IATA argues that this increase, alongside recent hikes in visa fees, will make travel to New Zealand more expensive and less appealing to tourists, potentially delaying the sector’s recovery beyond 2026.
Dr. Xie Xingquan, IATA’s Regional Vice President for North Asia and Asia-Pacific, stated that the move represents a double blow to New Zealand’s travel and tourism industry. He highlighted that the recovery of New Zealand’s aviation market is lagging behind major markets like Australia, Canada, France, Spain, the UK, and the US, which have either reached pre-pandemic passenger levels or are expected to achieve full recovery in 2024.
Dr. Xie emphasized the significant contribution of the travel and tourism sector to New Zealand’s economy. He pointed out the government’s own analysis, which indicated that for every dollar generated from the additional IVL revenue, the country would lose more than three times that amount in economic activity. Instead of hindering its growth, Dr. Xie urged the government to focus on enhancing New Zealand’s competitiveness as a destination compared to other markets. He cited Thailand as an example, where the government recently scrapped plans for a tourism tax on air travelers to stimulate spending in other areas.
During the public consultation process for the IVL, IATA had submitted a proposal urging against an increase. However, the government announced the levy increase and its implementation in the 2024 budget while the consultation process was still ongoing, raising concerns about the effectiveness of the process. Dr. Xie also criticized the government’s lack of clarity on how the funds collected through the IVL would be allocated. He advocated for the government to consider allocating these funds to initiatives that support the decarbonization of the aviation sector.
