The Government will cut the Customs levy charged on every cruise passenger arriving in New Zealand from $27.14 to $7.20 from 1 July 2027, handing the cruise industry a price cut it has been lobbying for since the charge more than doubled at the end of 2024.
Customs Minister Casey Costello announced the new Border Processing Levy rates on Friday. The levy on departing cruise passengers rises by three cents to 71 cents, so the net saving works out at $19.91 a passenger. Air travellers move the other way, with the arrival rate rising from $13.04 to $13.69 and the departure rate falling from $3.62 to $3.29, a combined increase of 32 cents a trip.
“The levy system is working as intended. Where forecast costs support a lower rate, travelers should receive that benefit,” Ms Costello said. “Cruise passengers will pay less, while Customs continues to provide secure and efficient border services.”
The levy pays for Customs’ risk assessment, passenger processing, investigations and compliance work at the air and sea border, and the Government expects it to recover $124.3 million of those costs in the current financial year. The rates are reset periodically so the levy accounts balance over time, which is why a charge can fall as well as rise. Costello said giving notice now “helps the travel and tourism sectors plan ahead before the new rates take effect next year.”
The cut partly reverses an increase that the industry blamed for making New Zealand one of the most expensive cruise destinations in the world. From 1 December 2024 the Customs arrival levy for cruise passengers jumped from $11.48 to $27.14, while the departure levy fell from $4.55 to 68 cents. Those rates were locked in for a levy period running to 30 June 2027, which is why the relief does not arrive until the season after next.
Cruise passengers also pay a separate biosecurity levy to the Ministry for Primary Industries, currently $10.58 a head on arrival, and that charge is not changing. Once the Customs cut takes effect the combined border charge on an arriving cruise passenger will fall from $37.72 to $17.78 before GST. Both levies are built into the ticket price rather than collected at the gangway.
New Zealand Cruise Association chief executive Jacqui Lloyd told RNZ the announcement was “incredibly helpful going forward” and one step towards repairing the sector. She said cruise accounts for one in 10 tourists coming to the country, but cruise lines had been trimming the number of New Zealand ports they visit and bringing fewer passengers as a result.
Part of the problem sits across the Tasman. Most cruises that call here start and finish in Sydney, and Lloyd said berth slots there were hard to get. “And so it does mean that there’s a reduction in port calls around New Zealand as itineraries get shortened because they need to leave Sydney and get back to Sydney at a certain time.”
The other problem is cost. Lloyd estimated that a ship carrying 3,000 passengers making about eight New Zealand port calls could run up $650,000 in government and port fees. “There are Maritime New Zealand fees going into every single port in New Zealand. There is also [an] oil pollution levy for every single port in New Zealand that is through Maritime New Zealand. You’ve also got a broader border levies, which we’ve just been discussing around Customs and MPI [Ministry for Primary Industries],” she said. “And then the ports also, of course, will be charging to berth in each of their ports.”
Set against that bill, the Customs cut is a modest start. The arrival levy is charged once per passenger when a ship enters New Zealand, not at every port, so on Lloyd’s example of a 3,000-passenger ship the saving is a little under $60,000 a voyage, or less than a tenth of the fees she describes. Lloyd said Maritime New Zealand and MPI were also holding their levies steady for the next few years, and that the new Customs rates had not been set purely to help cruise, but the combination mattered.
“The cruise lines need certainty for planning. They need to know when there is going to be an increase in costs or a change in regulation and they need to know early so that they can put that into their budgets and their planning for future deployment,” she said. She warned that any recovery would take time because itineraries are booked years ahead, so the lines would not be lured back instantly.
The numbers show how much ground has been lost. The association’s Value of Cruise Tourism report for the 2024/25 season put the sector’s total economic output at $1.23 billion, down 9.8 per cent on the year before, with the number of jobs it supported falling 15.3 per cent to 8,253. Ship visits dropped 14.9 per cent to 860, passenger spending fell 10.4 per cent to $393.7 million, and spending by the cruise lines themselves on fuel, provisions and port services fell 17.9 per cent to $260.6 million.
The 2026/27 season got under way when the Crown Princess docked in Auckland on 29 August. Tourism and Hospitality Minister Louise Upston said at the time that close to 200,000 cruise passengers were expected over the season. “After a challenging few years for the sector, there are encouraging signs of renewed confidence,” she said.
One of those signs came from Princess Cruises, which plans to double its New Zealand port calls from the 2028/29 season across nine ports from Auckland to Dunedin, a schedule the company says would make it the country’s largest cruise operator. TΔtaki Auckland Unlimited expects cruise to put more than $200 million into the Auckland economy this season, although its director Annie Dundas said passenger numbers remained below the levels of earlier years.
For the ports, tour operators, bus companies and waterfront cafes that live off a summer of ship days, the question is whether a $20 cut per passenger in 2027 is enough to change deployment decisions that are being made in Miami and Sydney now. Lloyd’s answer is that it helps, that the cross-agency approach matters as much as the dollars, and that the tourism and port sectors “need to know that the cruise lines are still coming to New Zealand so they can ensure that they can invest in infrastructure and also in workforce and so on.”
Do you work in a port town that depends on the cruise season, or have you watched the ships thin out over the past two summers? Tell us in the comments whether this levy cut will make a difference.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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