National Government Pulls Back on Proposed Bed-Night Levy, Sparking Tension with Tourism Mayors

The National-led government announced it will not pursue the bed-night levy that was part of the 2027 Auckland and Queenstown Regional Deals. The decision follows a recent leadership challenge that delayed the signing of Queenstown’s deal. Mayors of several tourism-dependent regions, including Queenstown and Auckland, warned that the retreat could jeopardise funding for infrastructure needed to support growing visitor numbers.

The New Zealand Herald

The Regional Deals, pledged by the National Party, were intended to align central and local priorities on planning, infrastructure investment and economic development. Both the Auckland and Queenstown agreements included a commitment to explore a user-charge on overnight accommodation—mirroring a similar levy already in place in Auckland. The deals were to be signed weeks ago, but the process stalled after National MPs were summoned to Wellington for the leadership dispute.

The New Zealand Herald

National Party leader Christopher Luxon said the party is considering other mechanisms to help regions manage tourism-related infrastructure pressures and will consider alternatives such as a “local tourism dividend” that allocates $1 per guest night to councils. Labour leader Chris Hipkins criticised the move, stating the National Party “can’t be trusted on anything” and noting that the tax was already included in the current year’s budget. National spokeswoman Nicola Willis explained that the party could not find a way to raise a bank levy without increasing costs for New Zealanders, implying similar concerns apply to the bed-night levy.

The New Zealand Herald

Auckland Mayor Wayne Brown called the reversal “deeply disappointing,” arguing that a user charge would avoid additional taxes on residents while supporting local events and businesses. Queenstown Mayor John Glover warned that the lack of a signed deal leaves the region without new revenue and urged the government to consider targeting overseas visitors rather than domestic travellers.

The New Zealand Herald

• “Ruling out the bed-night levy without offering any meaningful alternative to support the industry is deeply disappointing,” — Wayne Brown, michael craig mayor

The New Zealand Herald

• “This is new money. We don’t have to take it from anyone. We should relish the opportunity to get some income into the tourism councils as visitors come and we can have a debate about whether if people come from Auckland to Queenstown, they should pay that.” — April. Glover

The New Zealand Herald

• “We are glad to be having the national conversation about this important issue. Ultimately this isn’t about one particular funding tool – it is important that tourism funding has better balance, that we set New Zealand up to deliver a high-quality visitor experience so that all can benefit,” — New Zealand’s Katherine McGregor

The New Zealand Herald