“We were hoping for, and had actually forecast, a bit more of a surge through parts of 2026/27 until the tariffs came through,” Tourism Ticker reports.
“We are expecting again more subdued activity through parts of 2025/26 and then starting to take off a bit more then.”
Not everyone welcomes tourism growth. A study done for Tourism NZ and released in March found that seven out of 10 of those surveyed felt tourism had negatively affected them — though more than 80% said they had personally benefited from activity in their local area.
The Government apparently woke up to the importance of tourism for the economic rebuild earlier this year, with a Cabinet reshuffle in which Louise Upston took over the tourism and hospitality portfolio, and James Meager was appointed Associate Transport Minister with responsibility for aviation. Both appointments have been welcomed by the sector. There’s also been a restoration of funding to the country’s marketing agency, Tourism NZ, and a series of funding and policy announcements — including the possible introduction of a fee for overseas tourists to visit marquee attractions. While there’s nervousness about the impact of that, it’s seen as less of a blunt instrument than the near-trebling of the International Visitor Levy (IVL) this Government introduced.
But what was shaping up as the key market to supercharge tourism and the wider economy remains in the doldrums, showing a much weaker bounce-back than the already subdued recovery across the sector.
China travel to New Zealand
In 2018, MBIE (Ministry of Business, Innovation & Employment) forecast continued strong growth for the Chinese tourism market, projecting it to become New Zealand’s largest by expenditure by 2024.
But following the pandemic, figures from Infometrics show Chinese visitors spent $1.2 billion in the year to March — behind Australians ($1.9 billion) and visitors from the bright travel recovery story, the United States, who spent $2.9 billion.
Ivan Kinsella, a board member of the New Zealand Business Roundtable in China (NZBRiC) – NZ’s chamber of commerce based in Shanghai – is worried about the business travel and the tourism outlook generally — in particular the country’s ability to attract Chinese visitors back.
“Our overall foreign travel market has only recovered to 87% of the pre-Covid peak. While the Australian and the US markets have fully recovered, travel from China is only 55% of what it was back in 2018. And it’s going backwards.”
The key reason for this is the 75% increase from October 2024 in the total cost of the New Zealand visitor visa, including the IVL and translation fees charges.
For an individual traveller, these costs how add up to around $500, making New Zealand by far the most expensive country for most Chinese to gain access to – and that’s before the cost of the ticket, says Kinsella.
“That’s about 30% of the cost of a return economy fare from China. That’s keeping the Chinese away in droves.”
The visa cost increases have particularly affected travellers from China. Among the countries still needing a visa, China is the largest source of visitors to NZ. Most of their supporting documents are in Chinese and require expensive translation.
Latest Statistics NZ figures show that for the three months to July, Chinese arrivals were down 7% compared to the same period last year — before the visitor visa fees went up.
“That’s a disaster for the NZ economy. Ten years ago China was our second-largest tourism market in what was then our largest export sector. They have now fallen back to third place, well behind the USA.”
While there’s recently been some relaxation in which Chinese translation companies can meet Immigration NZ’s requirements, the costs still need to be paid.
The high visa costs are also having a toll on Chinese business links with New Zealand. In July, Chinese business travellers visiting NZ were down 24% on the same month last year (before the fees increased), while Chinese travelling to NZ for conferences fell 81%.
Outside of the Covid years, these business arrival numbers were the lowest since 2016.
The downturn in Chinese travel has also had a knock-on effect on NZ’s connectivity with China. In April, following the fee increases, Air New Zealand cut the long-standing daily service from Auckland to Shanghai to five flights a week while its Air China partner reduced weekly flights from Beijing from four to three.
Even more concerning is that the pipeline of future Chinese travellers to New Zealand is drying up. Immigration NZ data shows that in the 11 months since the big hike in visa and border fees, Chinese visitor visa applications have fallen 17% compared to the same period a year earlier.
But while New Zealand’s Chinese visitor traffic is dropping, other companies in the region are seeing double-digit growth in arrivals from China.
Australia’s Chinese visitor arrivals were up 12% in the last three months to July on the same period last year, while Chinese visitors to Japan increased a massive 29%, Kinsella says.
“It’s not a case of the Chinese not travelling, they’re just not coming here.”
“The situation has reached a critical stage. At this rate we run the risk of NZ’s place among Chinese tourism destination markets fading away to irrelevance.”
NZBRiC argues the government should drop the visa requirement for Chinese and replace it with the NZeTA, a simplified form of border entry approval required for travellers from visa-waiver countries which is valid for two years and costs only $17.
It’s not a case of the Chinese not travelling, they’re just not coming here.
Ivan Kinsella, NZBRiC board member
“The Government has already announced that the NZeTA will be replacing the transit visa for Chinese in New Zealand. This could be extended to all Chinese visitors.”
At the same time, the IVL should also be ditched for everyone, he says.
“The near-trebling of the levy to $100 for everyone except Australians and South Pacific countries was a mistake.
“More than half of our visitors arriving from around the world now have to pay for the IVL as well as the NZeTA. For a family of four, that adds $500 to the costs. New Zealand is the only Western country to tax visitors up front like this.”
The downturn in Chinese travel to New Zealand is shrinking GST revenue. This is much more significant source of revenue for the Government’s coffers than visa fees and the IVL, since all foreign visitors have to pay 15% on their New Zealand spend, without exemptions or refunds.
“The Chinese are among the visitors with the highest average spenders in NZ. Typically this is over $5000 per person, which works out at around $750 in GST.
“If some regions have pressure points in their travel infrastructure, let them charge a bed tax on visitors after people arrive — but let’s stop taxing visitors before they even set foot in the country.”
In the 12 months to July
3.4m total arrivals (86.8% recovered on 2019)
1.7m holiday (85.5% recovered)
59,000 conference 1.1m visiting friends and relatives (VFR)
Total holiday spending
Australia 2b
US $1.82b
China $842m
Britain $519m
Germany $384m
Source: Tourism NZ
The Government’s tourism roadmap aims to:
Increase the number of international visitors to New Zealand to at least 2019 levels by 2026 to 3.89 million)
Double the value of 2023 tourism exports of $9.9 billion by 2034 to $19.8b.