Tourism levy won’t raise visitor costs

Fiji's tourism sector will absorb a newly introduced five percent tourism levy, ensuring that the cost is not passed on to visitors. Permanent Secretary for Finance Shiri Goundar announced that hotels, tour operators, and cruise operators have agreed to shoulder the expense through internal adjustments, rather than increasing prices for tourists.

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The five per cent tourism levy introduced in the National Budget will be absorbed by the industry and is not expected to be passed on to visitors.

This levy is intended to provide crucial support to Fiji Airways during a period of escalating operational costs, especially fuel expenses. Goundar stated that industry stakeholders have committed to absorbing the additional cost within their existing pricing structures, avoiding any hikes in room rates or service charges. Consequently, tourists are not expected to face higher direct costs from this measure.

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This means tourists are not expected to directly face higher costs as a result of the measure.

The decision was finalized after discussions with key private sector operators and aviation stakeholders within the tourism industry. The primary objective is to prevent any additional costs from being transferred to visitors, which could potentially dampen travel demand and reduce overall visitor arrivals. Passing on these costs could lead to increased airfares and tourism expenses, posing a risk to visitor numbers.

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Fiji Airways remains central to the tourism sector and must be supported to maintain flight connectivity.

Goundar emphasized that Fiji Airways is vital to the tourism sector and its operational continuity must be maintained to ensure flight connectivity. The levy is framed as a coordinated industry contribution to sustain the national carrier's operations. The government is also providing financial backing and coordinating with state agencies to support this arrangement. This approach signifies a collaborative effort between the government and the industry to navigate external pressures, particularly the rise in global fuel prices. The measure is temporary, driven by current global economic conditions rather than a permanent tax alteration, with a continued focus on preserving Fiji's tourism competitiveness and ensuring uninterrupted air services and visitor flows.

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The measure is temporary and driven by current global conditions rather than a permanent tax change.