'They'll pay the price': Aussie travel hotspot's new tourist tax

The Fijian government will introduce a new tourism services tax for large-scale tourism operators next month, with travel industry experts warning that the costs could be passed on to customers.

The 5 per cent tax will apply from 1 September. The change has been criticised by travel associations in Fiji, Australia and New Zealand, who claim they were not properly consulted.

The Australian Travel Industry Association (ATIA) said the measure could catch out travellers who have already booked trips to Fiji from September onward, as travel agents and operators face confusion over how to administer the tax.

"The design and roll out reflect a complete lack of understanding of how the travel booking ecosystem works, and it is travellers and travel businesses who will pay the price for that failure," ATIA CEO Dean Long said.

"Travellers are the ones left exposed. Families with September school holiday bookings already paid in full, and travellers on large group, corporate and film production bookings, are being asked to find extra money for a holiday they thought was settled months ago. That is not how you treat people who chose Fiji in good faith."

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The change forms part of wider taxation amendments enacted as part of Fiji's 2026-2027 national budget, passed last month.

It will affect tourism operators — including hotel, tourism and cruise businesses — with an annual turnover above FJ$2 million (approximately $1.3 million).

According to Fijian finance minister Esrom Immanuel, revenue from the tax will be used to support Fiji Airways.

"The revenue generated will be ring-fenced and fully directed to Fiji Airways, which continues to face financial pressure from rising aviation fuel costs and its ongoing recovery from losses incurred during the COVID-19 pandemic," Immanuel told local media in June.

It's reported that the tourism tax will generate around FJ$70 million ($44.7 million) for the airline. The Fijian government is the largest shareholder of Fiji Airways.

ATIA confirmed it will meet with the Fijian government to discuss the tourism services tax, which it said arrived with "zero consultation".

Long said there is ongoing confusion over how the tax is collected, saying that members of the travel industry in Australia and New Zealand — which represent Fiji's largest tourism markets — were not consulted on the change.

"None of this needed to happen. The tax arrived with zero consultation with the travel industry in Australia or New Zealand despite the significant importance of these markets to Fiji," he said.