A Sustainable Path: The Case for a Visitor Levy in New Zealand
Michael Crosby, Head of Public Policy, Airbnb Australia and New Zealand
Tourism is not just travel; it’s a thriving ecosystem that supports economies, cultures, and communities. Here in New Zealand, tourism is the second-largest export earner, injecting over $13-billion annually into the economy. With the rising tide of tourists comes an increased strain on infrastructure, underscoring the need for innovative funding strategies to help local governments tackle this challenge. It’s time for a sustainable solution to help meet the need: a visitor levy. Visitors should help fund the infrastructure they use.
As a significant player in New Zealand’s tourism industry, Airbnb supports a modest levy on all accommodation providers. In fact, Airbnb contributed $2.8-billion to New Zealand’s Gross Domestic Product (GDP) and supported over 22,000 Kiwi jobs in the 12 months to March 2023.1
It is crucial that a visitor levy be inclusive, extending beyond the Short-Term Rental Accommodation (STRA) market to encompass all accommodation service providers. Any levy that disproportionately favours the hotel sector at the expense of the average Kiwi is not a viable solution.
A visitor levy is not a novel concept; user-pays systems are well-established globally and locally. For the better part of a decade, Airbnb has been the industry leader in the collection and remittance of tourism taxes. In the last seven years, we have collected more than $USD10-billion2 in tourist taxes globally, making Airbnb the largest collector and remitter of such taxes in the world.
A visitor levy could similarly provide sustainable infrastructure funding to councils while fostering an environment where the entire tourism ecosystem can flourish.
Mayors and councils across Aotearoa have long advocated for a visitor levy and now is the right time for the central government to empower local councils to do what’s best for the communities they represent. Locally Stewart Island already has a visitor levy in place. A thriving short-term rental community is a vital component of the tourism economy. Airbnb hosts welcome over 40 percent of all international visitors3, offering stays across the country and providing a variety of price points. Airbnb host and guest spending accounts for roughly one in every five tourism dollars spent.
Airbnb also supports the growth of ancillary services and local jobs such as domestic cleaning, gardening and property management. Over a quarter of surveyed hosts on Airbnb in New Zealand engage professional services to manage their listings and bookings.
This not only supports the local service industry but also helps hosts remain in their homes and communities, by providing them with the ability to supplement their income. In a recent survey of hosts on Airbnb, 35 percent said the primary reason they started hosting was to ‘make ends meet’4.
In turn, these hosts help drive economic growth and job creation, with many local businesses relying on the valuable tourism dollars spent by Airbnb guests – a total of over $3-billion on accommodation and other goods and services such as dining and retail5.
A sustainable visitor levy across all accommodation providers is a forward-thinking solution that is needed. It ensures that the tourism industry remains a robust backbone of the Kiwi economy while addressing the infrastructure challenges posed by its success. We need to embrace the opportunity to establish a fair, consistent and sustainable approach that will create a real difference for New Zealand.