The International Air Transport Association (IATA), an association of airlines around the world, has criticised the decision of New Zealand government to hike the International Visitor Conservation and Tourism Levy (IVL), which comes weeks after the country also hiked visa fees for several categories.

In a press statement, IATA says that the hike in IVL makes travel more expensive and likely further delays the recovery of the aviation market in the country.

According to IATA, the recovery of the New Zealand aviation market currently lags behind major markets such as Australia, Canada, France, Spain, the United Kingdom, and the United States. These markets have either recovered to pre-pandemic passenger levels or will achieve full recovery in 2024.

Xie Xingquan

“It has been a double whammy for the New Zealand travel and tourism sector, starting with New Zealand Immigration announcing steep increases in visa fees, and now the increase in the IVL,” says Xie Xingquan, IATA’s Regional Vice President for North Asia and Asia-Pacific.

“These changes make travel to New Zealand more expensive and less attractive and could further delay the recovery in visitor numbers to beyond 2026,” he adds. 

“The travel and tourism sector is an important contributor to the New Zealand economy. The government’s analysis indicated that more than three times of economic activity will be removed from the country for every dollar generated from additional IVL revenue. Instead of stifling its development, the government should be looking at ways to improve the country’s competitiveness as a destination compared to other markets,” Xingquan adds. 

IATA says that Thailand, for instance, scrapped plans for a tourism tax on air travellers in June to encourage tourist spending in other areas. 

The statement adds that during the public consultation process for the IVL, IATA had provided a submission urging that the IVL not be increased. 

“Unfortunately, the government announced the increased levy and its application in the 2024 budget while the consultation process was still ongoing, casting doubt on the process’ effectiveness,” says Xingquan. 

Xingquan adds that the government did not indicate how the funds collected by the IVL will be allocated. 

“I urge the government to consider allocating the funds collected to projects that support the decarbonisation of the aviation sector,” he adds.