New Zealand has announced a significant increase in the entry fee for international tourists. Starting October 1, the fee will rise from NZ$35 ($22) to NZ$100 ($62).
This nearly threefold increase aims to ensure that visitors contribute more to the public services and experiences they enjoy while in the country.
The move has caused concern among New Zealand’s tourism sector, which plays a vital role in the economy. Tourism contributed over $11 billion in the year ending March 2024. However, industry leaders fear the fee hike could discourage tourists from visiting, especially as the sector continues to recover from the COVID-19 pandemic.
The International Air Transport Association (IATA) has also voiced its disappointment. The organization noted that the fee increase comes on top of earlier visa fee hikes, which collectively make New Zealand a less attractive destination.
According to IATA, these changes could delay the recovery of New Zealand’s travel market to pre-pandemic levels beyond 2026.
Tourism officials are particularly concerned about New Zealand’s competitiveness compared to other major markets like Australia, Canada, and the UK. These countries have either fully recovered their tourism sectors or are on track to do so by 2024. By contrast, New Zealand’s tourism recovery remains slow, with the recent tax hike expected to create further challenges.
New Zealand’s government defended the decision by citing the environmental and social costs associated with high tourist numbers. The current fee of NZ$35, implemented in 2019, was not enough to cover these costs. The increased fee will help manage the pressure on local infrastructure and conservation efforts.
However, tourism industry representatives, like Rebecca Ingram, CEO of the New Zealand Tourism Industry Association, argue that the timing is poor. New Zealand’s travel industry is still reeling from the pandemic, and increased fees could make recovery even more difficult. Recent data shows that travel industry profits are still down 5% compared to pre-pandemic levels.
There is also concern over the transparency of the decision-making process. Dr. Xie Xingquan, IATA’s Regional Vice President for North Asia and Asia-Pacific, criticized the government for increasing the fee while the public consultation process was still ongoing. This has raised doubts about the effectiveness of such consultations.
To make matters worse, the government has not clearly outlined how the additional funds from the fee increase will be used. Industry experts, like Dr. Xie, suggest that the funds should support sustainable tourism initiatives, such as decarbonizing the aviation sector.
As New Zealand grapples with how to balance economic recovery with environmental sustainability, the impact of the new tourist tax remains to be seen. Some fear it could deter visitors, while others believe it is a necessary step to manage the consequences of overtourism. The debate continues as New Zealand prepares to implement this controversial measure.
