Shaping Queenstown: Sir John Key says a bed tax needed

Friday, 17 October 2025

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Sir John Key says New Zealand needs a more “user-pays” tourism sector in order to give visitors the experience they want.

“I understand the pressures, and I understand the issues, but you tell me how we fund the infrastructure that Queenstown needs?” Key said.

“We have got to get to a point where we start saying we have these hypothecated taxes … There’s no way the council of Queenstown Lakes area can rate enough to get the infrastructure built.”

The former tourism minister was a headline speaker at the Shaping Queenstown: The 2025 Tourism and Infrastructure Summit forum hosted by The Post and Infrastructure NZ, and sponsored by Air New Zealand, held in the resort town on Thursday evening.

A “bed tax”, or levy on hotel nights at possibly 2.5%, has been called for by Queenstown and Auckland to fund solutions to the pressure of one of New Zealand’s largest earning sectors.

While Key was convinced of the need for a revenue stream from its high-tourism numbers, and said he wanted such a tax when he was tourism minister, the current tourism minister, Louise Upston, was not in favour.

Speaking to the audience of some 150 decision-makers, iwi, industry leaders, and political figures, Upston questioned the merit of a bed tax.

“The interesting thing about a bed tax is Queenstown, if I’ve heard it correctly, wants most of that to be around infrastructure. Auckland wants most of that to be around events … right?

“I’m not sure in a country of five-and-a-half million whether we should have 50 different bed taxes all over the country. I’m not sure that leads to a great visitor experience.”

Upston was effectively alone in the room in vocally opposing a bed tax, though she said “nothing is off the table” when it comes to funding tourism.

But she instead first wanted to understand the total sum being spent on tourism and redraw the major events fund as part of a “a fundamental review of the whole tourism system”.

During a panel discussion, Ngāi Tahu Holdings chief executive Todd Moyle, Queenstown Airport chief operating officer Todd Grace, and Green Party infrastructure spokesperson Julie Anne Genter, were mostly supportive of a bed tax, or some revenue tool such as GST being shared with the regions.

“Yes a bed tax, but I don’t think that will solve all your problems,” Moyle said.

Grace, a Queenstown resident, said whether ratepayers should shoulder the burden was “passed the point of debate”, so some type of revenue collection was needed.

There also appears to be public appetite for the economic benefit of more tourism, but a desire for tourists to pay their way.

The Post/Freshwater Strategy polling on tourism and infrastructure, published for the event, found that nearly two-third of voters, 63%, believe New Zealand needs more international tourists to support local communities.

And nearly 65%, backed charging tourists to enter national parks, while 51% believed only tourists should pay, not New Zealand residents. An earlier June poll showed 54% of voters supported a proposed 2.5% levy on hotel stays.

Key said there needed to be more realism about what visitors pay overseas, reflecting on his own experience spending five months of the year out of the country.

“We own a house in Maui [Hawaii], okay. Two years ago, our rates bill … was US$14,000.

“This year I got our rates bill. It’s $114,000. By the way, that is on top of the US$60,000 we pay for council taxes.

“So when people tell me, ‘Oh, by the way, the Government set the [international visitor levy] fee at $100 Kiwi’ -- God, you’d be lucky to get a latte in bloody Maui for $100 Kiwi.”

He said New Zealand needed to “get with the programme” and think about ways to charge well-off visitors.

* The 2025 Tourism and Infrastructure Summit was sponsored by Air NZ.