The Tourism Export Council of New Zealand (TECNZ)’s shares the industry’s concern that the recently announced increase in visitor visa fees by Immigration NZ could become a handbrake for New Zealand’s international tourism recovery.
Chief Executive Lynda Keene said, “The Tourism Export Council of New Zealand was asked for feedback on the proposed increase in fees earlier this year. TECNZ’s submission requested Immigration NZ review the increase in fees and levies and reduce by 50%. We appreciate the proposed increase for group tour fees has been reduced. However, the standard visitor visa fee and working holiday visa fee increases might just be high enough to take New Zealand off the must-visit destination list.
We expressed our concern alongside Tourism Industry Aotearoa (TIA) that now was not the right time to increase visitor visa fees whilst the tourism recovery was still in progress. The inbound sector and airlines price tickets and itineraries one to two years in advance, so an appropriate ‘runway’ is needed for prospective visitors to have all the relevant information to base their decision upon to pay a deposit to travel to New Zealand, or not.
Whilst appreciating some cost recovery is required for visa services, the timing for full cost recovery is counterproductive in offshore markets to drive growth. Our preference would have been for increases to be implemented on 1 October 2025, not this year. The increase in visitor visa fees is going to impact the high growth market, India, and the recovery of New Zealand’s second-largest visitor market, China. Both markets can be major influencers in helping our international tourism recovery, but there is price sensitivity in the markets and the increase in fees might work against New Zealand.
TECNZ’s April 2024 international arrival forecasts 2024-2026 predicted that by YE March 2025 pre-Covid arrivals by YE March 2025 would be 88% and by YE March 2026 we would be back to 100% of pre-Covid arrivals.
Our latest forecast (August 2024) has taken into consideration a range of new assumptions including the lower-than-expected airline bookings reflecting a softening in many markets. Although the US, Australia, India and Canada have been star performers over the past two seasons, we are also seeing a bit of softening in those markets for the 24-25 season. In particular, the holiday segment is still sitting at 75% of pre-Covid arrivals so there is a lot more work to be done to push this higher.
We predict by YE May 2025 the recovery will be at 85%, by YE May 2026 we should be back to 96% of pre-Covid arrivals reaching a 100% recovery of arrivals by YE May 2027.
We’re aware the International Tourism Conservation & Visitor Levy (IVL) is under review. Given the mounting increases in border, customs and immigration visa fees all at the same time in 2024, we hope the Government will consider taking the IVL review off the table until we are back to 100% pre-Covid arrival numbers. If an increase is destined to occur, we advocate for the IVL increase to come into effect in 2025 or 2026.
New Zealand must not become complacent that just because we are here that visitors want to visit. We must provide an affordable and compelling proposition for visitors to tick New Zealand on their list of places to visit. We need to continue to work hard in a very competitive global marketplace for airlines to keep New Zealand on their schedules and price points do affect decisions for visitors to say ‘yes’ or ‘no’ let’s go (or not).
ENDS