1 Jul 2020

Tourism levy investment plan further delayed

7:58 am on 1 July 2020

It's been a year since most international visitors started paying an additional fee before entering the country.

Auckland Airport arrivals

File photo. Photo: 123RF

The International Visitor Conservation and Tourism Levy (IVL) is a $35 fee collected through visa applications.

So far $57 million has been collected with more than $720,000 amassed since the border closure in March.

About $18m has been earmarked across four tourism and six conservation projects back in August last year.

Ministry of Business, Innovation and Employment (MBIE) tourism director Karl Woodhead said considerable progress had already been made despite the pandemic causing delays.

"We have also pivoted where appropriate, for example, the Building the Tourism Workforce Programme has supported people in the tourism workforce to find alternative employment," he said.

A long term investment plan was expected in October, but the deadline continued to be rolled back.

In April, the government announced it would review the best uses of the levy - but no timeframe was set.

On 29 June, Woodhead said ministers would consider the levy in the coming months.

The annual levy investment report is also expected later this year, detailing the progress of existing projects.

When it was first announced, the levy was expected to raise more than $450m over the first five years to be split between conservation and tourism, but Woodhead said it was unclear how much that forecast had changed in the wake of the pandemic.

"It's not possible to establish accurate forecasts for visitor numbers at this time, as the management of Covid-19 globally will affect both New Zealand's border policy and the appetite for international travel."

Previously the tourism industry called for the levy funding to be used as targeted loans and grants to help the struggling sector.

But Woodhead said that would not be considered as part of the review as that type of support was available through the Tourism Recovery Programme.

When asked if the visitor levy was still relevant in a post-Covid travel economy, he said there were no plans to change the levy from $35.

"When introduced, the analysis noted that it is difficult to assess the likely impact of the levy demand, there are many factors that will affect travel - exchange rates, global economic growth, airfares and other holiday costs - all have an effect, and these are all changing rapidly at the moment," Woodhead said.

"The levy is at most about 1 percent of the average visitor spend of $3600 (according to the International Visitor Survey for the year ended March 2020).

"Based on available evidence, MBIE believes that the IVL will continue to have minimal impact on visitor numbers."

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