A visitor levy is the ideal solution to offset the huge cost of infrastructure for tourists.

That is according to Local Government New Zealand. Its research shows $1.38 billion is being spent by councils on assets to accommodate the visitors.

The organisation's chief executive Malcolm Alexander told Mike Hosking there's already a proven track record for a tourist levy.

"In my view it's the logical way to go. Either delivered nationally or locally it's common overseas, and actually the overseas visitors are happy to pay."

Alexander said while a visitor levy is an internationally accepted way to take the burden off ratepayers, he said it would need to go back into the right projects.

"The governance of this and the allocation is going to be important, because if there isn't line of sight between revenue and the expenditure, it's going to lose public support, it's not going to be fair."

However, AUT's Simon Milne told Rachel Smalley tourists could be put off, if individual councils start imposing visitor levies.

"If you take a piecemeal approach for every destination, every locality as its own little tax or levy, it can become quite expensive and actually quite confusing for the visitor," he said.

He said it makes more sense for local and central government to co-invest.

LISTEN ABOVE AS LGNZ CHIEF EXECUTIVE MALCOLM ALEXANDER SPEAKS WITH MIKE HOSKING