Auckland Council is joining mayors and some of New Zealand’s biggest tourism organisations in calling for a fundamental overhaul of how the country pays for tourism, arguing local ratepayers can no longer be expected to carry the cost of infrastructure and attractions used by millions of visitors.
A proposed New Zealand Tourism Funding Charter, already backed by more than 50 representatives from local government and the tourism sector, is seeking an enduring national funding system worth about $220 million a year.
The proposal would effectively allocate an amount equivalent to five percent of GST generated by tourism expenditure back into the visitor economy, ideally through either a nationally coordinated visitor accommodation levy or a dedicated tourism dividend from existing government revenue.
Auckland Mayor Wayne Brown says National’s newly announced plan to redirect International Visitor Levy revenue to councils is a welcome breakthrough, but does not provide the permanent solution Auckland and other tourism destinations are seeking.
$19.1 MILLION FOR AUCKLAND — BUT $27 MILLION NEEDED
Under National’s proposed tourism funding model, Auckland would receive about $19.1 million in its first year from a redistribution of International Visitor Levy revenue.
Brown says that is a significant step because it recognises two things councils have been arguing for — there is a funding shortfall, and more money generated through tourism needs to return to the regions supporting the visitor economy.
But Auckland Council estimates it needs around $27 million annually for major events and destination marketing, leaving an immediate gap of almost $8 million.
The council has previously used temporary funding arrangements to maintain major events while advocating for a permanent visitor-funding mechanism, acknowledging that its existing approach was not sustainable.
Deputy Mayor Desley Simpson says National’s proposal shows sustained advocacy by councils and the tourism industry is beginning to have an impact.
The advantage of redirecting existing IVL revenue is speed because it could begin without waiting for entirely new legislation.
But Auckland says speed should not be confused with permanence.
THE $220 MILLION PLAN
The Tourism Funding Charter goes considerably further.
Its starting point is an annual national tourism funding pool equivalent to around five percent of GST generated through tourism spending — approximately $220 million.
At least 90 percent of revenue would be returned directly to the region where it was generated, rather than disappearing into general government spending.
The funding would be governed through a transparent formula written into legislation, providing councils and tourism organisations with greater certainty when planning major events, infrastructure and destination marketing.
Regional funding decisions would also operate through independent governance arrangements with public reporting and audit requirements.
The principle is straightforward — communities attracting and servicing visitors should receive a greater share of the economic value those visitors generate.
PUBLIC TOILETS TO WORLD CUPS
The funding debate is not simply about advertising New Zealand overseas.
Councils are responsible for much of the infrastructure visitors encounter after arriving.
That can include public toilets, roads, parks, reserves, walking infrastructure, public spaces and amenities, while major destinations also invest heavily in events and destination promotion.
Brown warns the consequences of inadequate funding can operate at both ends of the scale.
Large cities risk losing international sporting and entertainment events, while smaller tourism communities can struggle to fund basic facilities such as public toilets.
Auckland has already identified visitor attraction and major events as an area requiring a more sustainable funding mechanism rather than continued reliance on rates and temporary budget fixes.
The stakes are also economic.
Major events bring visitors into hotels, restaurants, bars, transport services, shops and tourism businesses, meaning losing an event can mean losing spending across an entire local economy.
VISITORS OR RATEPAYERS?
Brown’s position is that Auckland households should not be required to carry an increasing share of those costs through their rates.
The charter instead adopts a user-pays principle.
Visitors would contribute towards the services, infrastructure and experiences they use while travelling, either through a national accommodation mechanism or through tourism-generated revenue already collected by central government.
The proposal also calls for any new funding to supplement existing central and local government investment, rather than simply allowing governments to withdraw current funding once the new revenue arrives.
That distinction is critical.
A $220 million tourism fund would achieve little if it merely replaced money already being spent.
AIRBNB AND SHORT-TERM RENTALS ALSO IN THE FRAME
The charter also tackles one of the more difficult issues created by the growth of Airbnb and other short-term accommodation platforms.
It proposes a national short-term rental accommodation register.
Supporters argue that would create a more level playing field between traditional hotels, motels and other commercial accommodation providers and properties operating in the short-term rental market.
It would also give councils better information to administer rating policies consistently.
The objective is to ensure that whatever national tourism funding mechanism ultimately emerges, one part of the accommodation sector is not carrying an unfair share of the burden.
AUCKLAND DEAL NOW PART OF THE ARGUMENT
Brown is also tying the issue directly to the Auckland Deal signed with the Government earlier this year.
That agreement established a new long-term partnership between Auckland and central government and includes jointly developing a destination and major events strategy to grow tourism, events and hospitality.
Auckland Council argues the next Government should use that relationship to co-design a durable tourism funding system with local government and industry.
The Mayor intends to make the Tourism Funding Charter one of the first components of his manifesto to the Government formed after the November election.
His argument is that tourism funding should survive changes of government rather than being repeatedly renegotiated through annual Budgets.
TOURISM FUNDING BECOMES AN ELECTION ISSUE
That puts tourism firmly into the Election 2026 debate.
National has now acknowledged the funding problem and proposed redirecting more IVL revenue to councils.
ACT has claimed the move validates its own Local Tourism Dividend approach and has strongly opposed a new bed tax.
Auckland, meanwhile, says the mechanism matters less than establishing the principles permanently.
The Tourism Funding Charter leaves the door open to either an IVL-style tourism dividend or a visitor levy, provided revenue reaches the communities carrying the costs.
For Māori tourism businesses, iwi destinations and communities hosting some of Aotearoa’s most significant cultural and natural attractions, the outcome also matters.
Tourism relies heavily on whenua, culture, landscapes, heritage and experiences rooted within local communities. Sustainable funding therefore has implications for regional employment, Māori enterprise, infrastructure and the ability of communities to manage visitor pressure while protecting the places people come to experience.
FROM TEMPORARY FIX TO NATIONAL SYSTEM
Auckland Council’s message is that the argument has moved beyond whether a tourism funding problem exists.
The debate now is about how New Zealand fixes it.
National’s proposed $19.1 million for Auckland would provide immediate relief.
Auckland says it still needs $27 million annually for major events and destination marketing.
And the national charter proposes something considerably larger — around $220 million every year, distributed under legislation and overwhelmingly returned to the regions generating the visitor activity.
For Brown and the coalition of councils and tourism organisations behind the charter, the objective is ultimately to end the cycle of temporary fixes.
If tourism is a national economic asset, they argue, paying for the infrastructure and communities that sustain it needs to become a national responsibility — rather than another bill left sitting with local ratepayers.
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