New Zealand Joins Growing Trend to Charge Foreign Tourists More
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New Zealand is joining a growing list of countries that charge foreigners more to visit popular tourist sites.
The government plans to levy a fee of as much as NZ$40 ($24) on foreign visitors to key natural attractions such as Milford Sound, the majestic fjord reputedly described by the writer Rudyard Kipling as the eighth wonder of the world. The charge, which could be introduced in 2027, won't apply to New Zealand residents.
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Walk down any of London's shopping streets today and you'll notice something missing – not the designer shops or beautiful window displays, but the international tourists. The visitors who once spent freely in our stores, stayed in our hotels, dined in our restaurants and enriched the whole economy are no longer coming to our great city in the numbers we used to see. Many now bypass London entirely for Paris, Milan or Madrid. Those that do come are spending less than they used to. Why? Because the UK scrapped tax-free shopping. This decision by the last government was one of the most self-defeating in recent memory. Since the abolition of VAT-free purchases for tourists in 2021, the UK has become the only major country in Europe which doesn't offer VAT refunds to international visitors. And let me tell you the consequences are stark. One is that fewer people are coming to our shores. New figures show that while visitor numbers in the UK have almost returned to pre-pandemic levels, we haven't seen anything like the growth that our EU rivals have. And according to new figures from the Association of International Retail (AIR), tourist spending is eight per cent down on 2019. Meanwhile, in France and Spain, spending has surged ahead — up ten per cent and six per cent respectively. The difference? They still offer VAT-free shopping. Yet since 2021, we don't. Despite the clear consequences. To be clear, this isn't just about a few luxury retailers in the West End. It's about the entire visitor economy, across the entire UK. Shopping accounts for a quarter of all spending by international tourists. For every pound spent in VAT-free retail, visitors spend another £4 across hospitality, transport, culture and services. That's money into the tills of restaurants in Edinburgh, taxi firms in Manchester, theatres in London and family-run hotels in the Lake District. After the decision to scrap the scheme, the excess paid by foreign visitors on their shopping was branded a 'tourist tax' – and rightly so. It has driven away high-value visitors and handed our European rivals a competitive advantage. Increasingly, British tourists are now doing their shopping on the continent, claiming VAT back in Milan while leaving British shops behind. Visitors from the US, China, the Middle East and now – post-Brexit – the EU's 450 million citizens, are being actively incentivised to go anywhere but here. Of course we see the impact across our hotel group, where tourists who once returned laden with parcels now cut UK trips short in order to add a stop in Europe where they do their shopping, knowing they can reclaim sales tax. This is madness – but it's reversible. The UK now has the chance to be the only country in Europe offering tax-free shopping to EU residents. That is a Brexit benefit hiding in plain sight. 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Let's scrap the tourist tax, reinstate VAT-free shopping, and make the UK the world's greatest shopping destination once again. Sir Rocco Forte is Chair of Rocco Forte Hotels
