Budget 2025: What the accommodation sector wants

22nd May 2025 By Staff Reporter | news@propertyticker.co.nz | @propertyticker

In a series of articles previewing Budget 2025, the Ticker hears from industry professionals about what they want from the government today.

Hotel Council Aotearoa strategic director James Doolan

“HCA welcomes recent growth initiatives. We’re keen to see central government backing the tourism industry as part of its goal to double exports. The tourism industry can only double international visitor spending if central and local government do more to support event attraction and destination marketing. 

Subvention payments to drive tourism demand are absolutely commonplace around the world, so New Zealand can only hope to compete if we start reinvesting more of tourism’s GST [goods and services tax] take back into the tourism industry in a purposeful manner. 

The hotel sector is keen to see higher levels of investment into Tourism New Zealand, major events, business events and regional tourism organisations that demonstrate their effectiveness.  

While it’s not what it was originally designed for, the IVL [International Visitor Tourism and Conservation Levy] should be spent helping to drive more tourism demand and solve systemic issues. Perhaps tourism merits a larger share of IVL receipts given current tourism funding challenges and the ability of our sector to generate tax revenues. 

HCA has repeatedly said we favour wholesale reform of tourism structures and funding – we would welcome any signs in the Budget that government is willing to work with industry on these challenges to once visitation has fully recovered and we’re back into positive growth territory.”  

Backpacker Youth and Adventure Tourism Association advocacy lead Brett Duncan

“From the upcoming Budget, primarily, BYATA would like to see funding for a small team dedicated to a Working Holiday Visa (WHV) campaign. 

In the tourism boom post Global Financial Crisis we saw the WHV numbers steadily increase to a peak in 2016 to 2017 with a little over 60,000 arrivals in each of these two years. 

With Tourism New Zealand having, at the time, a dedicated youth marketing team, youth tourism was blossoming. 

After this time, this team was disbanded and WHV arrivals began to slow in the face of overall tourism numbers increasing to record levels. By 2019 the number of arrivals by this cohort had fallen to less than 47,000, a 23% drop which saw a notable impact to the nation’s budget accommodation sector. 

This impact was acutely felt by those in the tourism industry who are reliant on youth sector, primarily the backpacker hostels, and then, to a slightly lesser extent, a hospitality industry reliant on an army of seasonal workers. 

In 2023, the first full year after the borders reopened, we saw about 43,000 WHV arrivals, short of the fast declining 2019 number and well short of the peak of 2016/17.  In 2024, this number fell further backwards to just 40,000. In 2025, arrivals have fallen further on the small sample data we currently have. 

Studies have shown that a WHV maker generates 12 times the GDP spend of an international visitor visa arrival.  WHV holders stay up to 12 months (the British and Canadians longer) spending their money in twice as many different regions and fill short term seasonal roles that lack job security for New Zealanders. They do not take jobs away from Kiwis, in fact by adding 60,000 WHVs (essentially a city of people) to our population their spend into our GDP creates more jobs than they take. 

There is further value added to our economy when friends and family of this group come to visit – a group of visitors that require no marketing whatsoever.  This WHV group is the very definition of “high value”.   By utilising budget accommodation, they not only have greater regional dispersal of their expenditure, but also more of their holiday budget to spread into many other different parts of the economy such as experiences and entertainment, compared to other visitors.

There is evidence from Australia that a dedicated campaign to entice WHV holders to come can provide successful outcomes. Post-Covid, Tourism Australia employed a dedicated campaign manager to target their similar Working Holiday Maker (WHM) program. They ran a highly successful campaign before and at the height of the FIFA Women’s Football World Cup which translated into a record number of WHMs arriving, smashing their previous record set back in 2013. 

In fact, earlier this year it was reported that Australia, alone, had 50% of all the working holiday arrivals worldwide. With a current unemployment rate of 4.1%, the arrival of circa 250,000 WHMs clearly has had little impact on their job market.

BYATA would like to see a small, dedicated team funded to heavily promote the WHV scheme into the key markets of Britain, Germany, France, the USA, Canada and Ireland. This will have a substantial positive impact on our economy and help boost a struggling youth tourism sector.”

Finance Minister Nicola Willis will deliver Budget 2025 at 2pm today.