Increase in IVL impact on future visitation
“We are disappointed to learn the value of the IVL fee is increasing from $35 to $100 (185% increase) and very concerned the increase will come into effect from the 1 October 2024. TECNZ’s submission on the IVL recommended Government did not rush their decision to implement an increased IVL fee without careful consideration of the entire visitor economy, booking trends and research into price sensitivity from source markets because the recovery of returning visitors had stalled.
We said if there was to be an increase in the fee the timing of implementing an increase must be carefully considered on the impact with regards to Inbounds selling itineraries 1-2 years in advance. We requested any increase of the fee be implemented from 1 October 2025. This would allow offshore travel trade to price accordingly for their clients and maintain goodwill with major offshore travel sellers. Visitor fees (and visa processing times) do influence visitors to press go or no go to visit New Zealand. Time was needed for prospective visitors to consider the value proposition of coming to New Zealand.
Another area of concern is about how the collected hypothecated IVL fees will be distributed in the future. This is still unknown. TECNZ supports IVL funds be distributed across the Department of Conservation to support visitor infrastructure and services and also to local government to support visitor infrastructure developments (as it has been in the past). Visitors appreciate knowing where their visitor levy is being spent to help improve conservation and visitor services. We’d be concerned if the IVL pool of funds were to be allocated to a raft of different projects that were not directly related to improved visitor services.
Has New Zealand reached a tipping point with recent increased visitor visa fees, border and customs fees, and the IVL? We think yes and suspect the recovery will stall over the next 1-2 years. i.e. limited growth in the 24-25 and 25-26 seasons. TECNZ has downgraded its international arrival forecasts of reaching pre-Covid international arrivals from YE May 2025 to YE May 2026. There is no doubt government decisions are making it harder for offshore travel agents and tour wholesalers to recommend New Zealand to their clients. We mustn’t become complacent that because we think New Zealand is a great place to visit to presume every prospective visitor feels the same way. There’s a whole world out there that offers lots of affordable options.
New Zealand needs to look at implementing initiatives that are enablers of international growth, not initiatives or decisions that may stifle growth (handbrake).
Time will tell what the impact will be.”