Custom Travel Itineraries to New Zealand since 1990
Custom Travel Itineraries to New Zealand since 1990
On October 1 the New Zealand government will increase the International Visitor Levy (IVL) to NZ$100 from $35 NZD. Recent headlines about the “nearly triple” increase has sparked debate within the country and within the tourism industry. In this blog post we examine the history and intention of the IVL, arguments for and against, and finish with a few of own observations and estimations.
To save you time, New Zealdn is wrestling with the balance of tourism’s positive effect to its GDP versus the longer-term ramifications of attracting as many visitors as possible. An increase in the IVL is to address the impact of tourism. In our opinion, the increase of ~$40USD for most North Americans will be a non-factor in their decision to travel. For more information about the IVL please visit the NZ Immigration website here.
What is the IVL?
The IVL is an acronym which is short for the International Visitor Conservation and Tourism Levy. It is a tourism tax that has long been talked about, and finally introduced in 2019.
Keep in mind that New Zealand as a country is only about the size of California but has a population of about 5 million vs 40 mm for California. The infrastructure is thus built for the 5 million New Zealanders plus some overhead. Yet in 2019 the number of travelers into New Zealand totaled to over 3.8 million (10% being from North America). Most of those visitors are entering between September and May.
Thus New Zealand can not accommodate the impact of an ever-increasing number of visitors. The IVL was instituted as a Tourism tax for those entering the country to help pay for conservation projects and help address infrastructure needs.
Points Cited by Proponents for the Increase
Critics to the IVL Increase Argue:
Thoughts
For years we have argued that the country needed a new strategy for tourism. We believe an increase in the IVL is a step in the right direction as long as the funds are allocated correctly. In this we do not have much confidence, based on the lack of foresight exhibited by the New Zealand government when it shuttered from the world during Covid. The silence from the Ardern administration at that time was deafening and the country wasted years without a plan as to how to improve its tourism strategy.
New Zealand has long known it cannot afford to play the numbers game, yet measured itself against total travelers into the country for years. We believe that New Zealand is a very beautiful and unique place in the world. The country should recognize what it has and how to differentiate itself in the market. It should be something that is a premium.
So we ask: is a decline in overall visitors necessarily a bad thing? Would a lottery or application system in place allow a balance of travelers to enjoy the country?
Ultimately, the long-term impact of the IVL increase on New Zealand’s tourism industry remains uncertain. However, we do not feel that it will have an effect on the decision making process or commitment to visit for our clients. Tourism Minister Matt Doocey argued the new tax cost would not be a huge deterrent, as NZ$100 would make up less than 3% of most tourists’ average spend in the country. Conservatively, even at 2% of the average spend, this would be a holiday to New Zealand for $5k NZD (~$3150 USD). That is simply not our market or the type of experience we would be expected to deliver for our clients.
If committing the time and expense to visit New Zealand, does $40USD per person prevent one from visiting when the repercussions could be less crowds and massive buses at favorite tourism locations? We are inclined to give the country the benefit of the doubt and keep our fingers crossed it can emerge for the better.
We hope you’ve enjoyed this blog post. Dreaming of your own New Zealand adventure? Our team are experts and would love to craft a personalized itinerary to make your trip unforgettable. Let us turn your dream vacation into reality!