Fiji is set to implement a new tourism services tax starting September 1, which could affect Australian and New Zealand travelers. The tax, set at five percent, will apply to tourism operators, including hotels and cruise businesses, with an annual turnover greater than FJ$2 million (approximately AUD$1.3 million).
The revenue generated by this tax is designated to support Fiji Airways, the nation's flag carrier, which has faced financial challenges including a $25 million loss in 2024 and increased operational costs due to rising fuel prices. The Fijian government has also guaranteed a $200 million loan for the airline.
Fijian Finance Minister Esrom Immanuel stated that the tax would assist in revitalizing Fiji Airways, which has had to reduce certain routes, such as its Nadi-Dallas/Fort Worth service, to improve its financial standing. He emphasized that the revenue would be specifically allocated to the airline to help it recover from pandemic-related losses and manage current aviation fuel costs.
However, the tax has drawn criticism from tourism industry officials who express concerns about its potential impact on revenue and the traveler experience. The Fiji Hotel and Tourism Association (FHTA) described the situation as "entirely avoidable," with CEO Fantasha Lockington telling the Fiji Times that the association had previously raised objections to government officials. She stated that the industry's warnings about the complexity of administering the tax were either ignored or dismissed, leading to the current challenges for travel partners.
The Australian Travel Industry Association (ATIA) echoed these concerns, with CEO Dean Long calling any potential price increases on existing bookings "a broken promise dressed up as policy." He criticized the tax's design and rollout, suggesting it indicates a "complete lack of understanding of how the travel booking ecosystem works" and predicted that travelers and businesses would bear the financial consequences.
ATIA highlighted that the tax was introduced with "zero consultation" with the travel industry in Australia or New Zealand, despite the significant importance of these markets to Fiji's tourism sector. Australia is Fiji’s largest source of tourists, followed by New Zealand. The industry was given just over two weeks between the announcement and the tax's effective date, which ATIA deems insufficient time to update contracts, pricing systems, or inform travelers.
Tourism is a major contributor to Fiji's economy, accounting for approximately 40 percent of its GDP. In June 2026, Fiji was among the top 10 short-term return destinations for Australian travelers, with 37,000 visitors that month alone, according to the Australian Bureau of Statistics.