Filling the van costs $240 now
The Iran conflict’s oil price spike has landed squarely on regional tourism operators who were already running thin. ExperienceKart managing director Karthik Subramanian told RNZ this week that a single tank fill for a tour van has jumped from $100 to $220-$240. His company is absorbing the hit because tour prices were locked in at booking. Margins are at or near zero.
This is not an isolated transport cost. Fuel works its way through nearly every line of a hospitality P&L: supplier delivery surcharges, packaging costs driven by petrochemical inputs, and the personal fuel bills of staff who drive to work in regional areas where there is no public transport alternative. Industry analysis has previously estimated delivery surcharges alone ranging from a few percent to more than 10%.
For a cafe in a tourism precinct, the maths is brutal. The lease premium reflects the foot traffic. The fit-out reflects the brand. The staffing is scaled for peak season. And when the cost base lurches upward by double digits in a matter of weeks, none of those fixed commitments flex.
Customers are booking 24 hours out, not weeks
The cost shock would be survivable if demand were holding. It is not. Destination Hauraki Coromandel general manager Kylie Hawker-Green told RNZ that domestic booking windows have collapsed from three to four weeks to just 24 hours. Families wait until Thursday to check the weather and their bank balance before committing to a weekend trip. When they do go, they pick a single activity and skip the restaurant.
Tourism Industry Aotearoa chief executive Rebecca Ingram confirmed that businesses have not yet raised prices across the board despite cost pressures. Translated from industry diplomacy: operators are eating the difference and hoping the squeeze passes before the cash runs out.
The Tourism Satellite Account for the year ended March 2025 showed domestic tourism expenditure at $28.5 billion, up just 1.0%, while guest nights in short-term commercial accommodation fell 2.7% to 38.8 million. Visitors were already coming for shorter stays and spending less per trip before the Iran shock hit. That trend has now accelerated.
The closure rate was already alarming
This is the part the government’s talking points miss. According to Cetrix data reported by the NZ Herald, 2,564 hospitality businesses closed in the 12 months to August 2025, a 19% increase year-on-year. That figure predates the fuel shock entirely.
Landmark venues have been falling steadily. Auckland’s Harbourside Ocean Bar Grill, which had operated on the waterfront since 1988, closed citing lower sales and ever-increasing costs. Wellington lost the Chocolate Fish Cafe and Spruce Goose, both high-footfall, tourism-adjacent venues. None were protected by their locations or their reputations.
Direct tourism employment stands at 194,631 people, representing 6.8% of total New Zealand employment, with the sector contributing 7.7% of GDP. This is not a niche problem.
Infometrics says two years minimum
Infometrics principal economist Nick Brunsdon warned this week that the oil price shock would weigh on the economy for two years or more beyond any ceasefire. Before the shock hit, 12 of 16 regional economies were expanding in the March quarter. That momentum has now stalled, with the most exposed regions being those where tourism dominates: Coromandel, Queenstown-Lakes, Northland, Marlborough, the West Coast.
The government is watching the wrong number
Tourism and Hospitality Minister Louise Upston responded this week by citing visitor numbers at 93% of pre-pandemic levels and pointing to Air New Zealand’s announcement of three new routes as a confidence signal.
The 93% figure is a lagging indicator measuring bodies through airport gates. It tells you nothing about whether those visitors are staying as long, spending as much, or keeping regional hospitality businesses solvent. The 24-hour booking window is a leading indicator. So is a 19% jump in hospitality closures. So is a 50-year-old cafe at a tourism landmark shutting its doors.
What this means for anyone connected to the sector
For B2B operators who supply, finance, or lease to tourism and hospitality businesses, the signal is unambiguous. Costs have moved first. Customers are pulling back second. And Infometrics has put a two-year floor under the pain.
The instinct to treat each closure as a one-off, a victim of bad luck or poor management, is comfortable but wrong. When a cafe at a flagship tourism location with 50 years of trading history cannot make the numbers work, the problem is structural. The operators still absorbing doubled fuel costs without raising prices are not being stoic. They are running down their runway. The question for anyone with exposure to this sector is not whether more closures are coming, but how many you have budgeted for.
Sources
- RNZ: Tourism operators struggle with rising fuel costs (2026-05-23)
- Newswire: Filling up a tour van now costs 240 dollars not 100 as Iran war fuel shock hits New Zealand tourism operators (2026-05-23)
- MBIE: Tourism Satellite Account (2025-03-01)
- NZ Herald: Iconic Auckland restaurant to close – Harbourside Ocean Bar Grill ‘no longer commercially viable’
- Restaurant and Cafe: Fuel for Thought
- Restaurant and Cafe: Prepare for the Squeeze, Not the Rebound