Alarm bells over tourism funding
Tourism Minister Kelvin Davis has been warned a long-term more substantial visitor levy may be needed if international arrivals continue to climb.
A briefing paper prepared by the Ministry of Business, Innovation and Employment (MBIE) said it was not clear whether the current tourism infrastructure fund, or other measures such as a targeted visitor levy, would be sufficient to catch up with growth in international arrivals.
International visitor numbers grew 9 per cent for the year to August, which represented 3.67 million arrivals, and were forecast to reach 5m by 2023.
The tourism portfolio has an annual budget of $175 million and Tourism New Zealand receives $117m to promote the country internationally.
MBIE said there was mounting concern about costs to communities from tourism, and local government’s ability to pay for visitor infrastructure in places like Queenstown, where there were 39 visitors to every one ratepayer.
If high growth continued longterm, a more substantial visitor levy might be needed to keep the sector on a sustainable footing, the briefing paper said.
It did not specify an amount, but warned that continued public support for the industry required an assurance that central and local government could offset the costs.
‘‘Continuing visitor growth could lead to concerns about ‘over tourism’, particularly if New Zealanders feel the costs outweigh the benefits, or if they feel they are being ‘pushed out’ due to overcrowding at some attractions, pressure on local infrastructure and amenities, or hotel prices increasing,’’ the briefing said.
MBIE said it was looking at who paid for tourism and who received the revenue from it in order to come up with the right funding model.
Freedom camping, visitordriver behaviour, and the ability to respond to sudden changes in the number and types of visitors coming to New Zealand were other challenges outlined in the briefing.
It also noted that despite the continued rise in international tourists, spending for the year to June was flat and in the case of China, it had dropped 16 per cent.
The need to look more closely at how to fund tourism amenities is likely to receive widespread support, even if there are varied opinions on the best way to do it.
Tourism Industry Aotearoa has opposed Labour’s idea of a $25 a head levy on international visitors on the grounds they already contribute through GST on the $14.5 billion they spend here annually.
Local Government New Zealand president Dave Cull said sustainable funding – whether it was from a levy or a portion of GST – was vital to cope with the pressures from booming tourism numbers.
But it had to be fairly raised and allocated, and available to cover capital, operational and maintenance expenses related to tourism infrastructure.
‘‘Asking visitors, who spend on average more than $3000 over 19 days when they visit, to contribute $25 to go towards the infrastructure they use when they are here is not unreasonable,’’ Cull said.
‘‘Many of New Zealand’s tourism hotspots have small ratepayer bases and funding water systems, roads, toilets, pathways and other infrastructure used by numbers much greater than the resident population should not fall solely on them.’’