The country's only regional tourist levy is sparking a heated debate raising concerns that it may put off visitors.
Halfmoon Bay in Stewart Island Photo: RNZ / Ian Telfer
The Southland District Council is proposing to triple the Stewart Island visitor levy from $5 to $15 during the first review of the fee.
Consultation, which closed earlier this month, received 121 submissions with the majority asking for the levy not to be increased.
More than 30 of the submitters sought to voice their views to the council over two hearing days.
Stewart Island accommodation provider Nicola McCracken opposed the fee increase, saying it would be detrimental to the island.
Stewart Island was a destination more for domestic rather than international visitors, Ms McCracken said.
She opposed the levy increase and called for residents to have more of a say on where any funds collected go.
Real Journeys general manager Paul Norris didn't oppose the levy increasing, instead he asked for the fee to be raised in increments.
Tripling the levy in one go could turn away visitors to the island, Mr Norris said.
Councillor Stuart Baird questioned Mr Norris, asking when and how the levy would be raised.
Mr Norris said the levy should be reviewed every three years and suggested it could first be raised to $7.50 on the first instance.
The only regional tourist tax in the country was introduced in 2013, collecting more than $750,000 since then.
Manfred Herzhoff, from Rakiura Adventure Limited, said the proposed levy increase was a blatant power grab by the council.
Mr Herzhoff said, "They don't want to have to spend the money on necessary infrastructure, having it to come out of their own budget, so why not making the island an excuse to get their own tax?"
A second hearing will be held on Stewart Island on Friday.