New Zealand Plans Major Increase in Tourism Levy
New Zealand’s government is considering a significant increase in the International Visitor Conservation and Tourism Levy (IVL), potentially raising it from $35 to $100 for international visitors. This proposed hike is a response to inflation, rising costs associated with tourism, and similar tariffs in other destinations.
The IVL, introduced in 2019, requires most foreign visitors to pay a $35 fee upon entering New Zealand to support sustainable tourism projects. In 2019, the IVL generated approximately $80 million annually, but the government has identified several reasons for proposing an increase:
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Inflation and Rising Costs:
The rising costs of maintaining tourism infrastructure and conservation efforts have outpaced the current IVL revenue.*
Inadequate Funding:
The government estimates that the unfunded costs of international visitors are around $250 million annually, creating a funding gap.*
International Benchmarking:
Similar levies are in place in other popular tourist destinations, and New Zealand aims to align with these tariffs.The government has outlined four potential options for the IVL increase:
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Option 1:
Increase the IVL to $502.
Option 2:
Increase the IVL to $753.
Option 3:
Increase the IVL to $1004.
Option 4:
Increase the IVL to $125Each option represents a different approach to balancing the need for increased funding with the potential impact on tourism demand. The government is also seeking public feedback on how the additional funds should be allocated within the tourism and conservation sectors.
If approved, the highest proposed increase to $100 would mean international visitors would pay nearly triple the current fee. This significant hike could potentially affect travel decisions, particularly for budget-conscious travelers. However, the government argues that the additional revenue is essential for maintaining and improving New Zealand’s tourism infrastructure and conservation efforts, which ultimately enhance the visitor experience.
The government is considering several areas for allocating the increased IVL funds:
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Tourism Infrastructure:
Maintenance and improvement of tourism-related facilities, such as roads, trails, and visitor centers.*
Conservation Efforts:
Protecting and managing natural areas, including national parks and wildlife sanctuaries.*
Cultural Preservation:
Supporting the preservation and promotion of New Zealand’s cultural heritage.The Ministry of Business, Innovation and Employment (MBIE) emphasizes the importance of public input on these allocations, encouraging citizens to participate in the decision-making process. Feedback can be provided through surveys and online applications until June 11.
Impact on Tourism Sector and Public Input
Tourism is a vital sector for New Zealand’s economy, providing jobs and investment opportunities. The proposed IVL increase aims to ensure that international visitors contribute more significantly to the costs they impose on the country’s infrastructure and conservation efforts. Assuming visitor numbers return to 2019 levels, the IVL is expected to generate about $80 million annually between 2024 and 2026.
The New Zealand government values public opinion on the proposed IVL increase. Citizens are encouraged to share their views through surveys and online applications until June 11. The feedback will play a crucial role in shaping the final decision and ensuring that the levy reflects the needs and preferences of both the tourism industry and the general public.
New Zealand’s tourism sector is gradually recovering from the COVID-19 pandemic. The proposed IVL increase aims to support this recovery by providing necessary funding for tourism infrastructure and conservation projects.
