Tourism businesses not so chipper as growth slows

Friday, 6 December 2019

Tourism New Zealand has rejigged its Chinese promotions to arrest a slide in visitor numbers

After four years of phenomenal growth, parts of the tourism industry have come down to earth with a bump.

A state of the industry report found almost 38 per cent of operators expected a deterioration in business over the next year, a sharp increase from the just under 12 per cent who felt that way in in 2018.

There was also concern about the strategy of targeting high value visitors, with less than half of those surveyed being successful in attracting them.

Tourism Industry Aotearoa chief executive Chris Roberts said the increased pessimism in the survey of 484 TIA members by the Weltec School of Hospitality Tourism was no surprise and it reflected the changing international market.

**READ MORE:

The tourism industry is having a tougher time of it both domestically and internationally as it faces fiercer competition for customers.

* Fewer backpackers and visa delays a double whammy for hospo and tourism businesses

* The tourism boom is over

* New Zealand no longer flavour of the month with Chinese tourists

* Brexit hits the backpacker market and spending plunges by $167m

Tourism Industry Aotearoa chief executive Chris Roberts says that the days of consistent growth across all segments of the visitor market are gone.

* T ourism New Zealand rethinks promos to super rich and super budget travellers**

'Two years ago we were at the height of a tourism boom and this year things are much softer, so confidence levels have come off a bit, but more tourism businesses are expecting further growth this year than those that are expecting to go backwards.'

He pointed out tourism was still more positive than other sectors generally.

The 'value over volume' debate continues as tourism struggles to define whether we just want big spenders, or those who also stay longer and visit more places.

'Of respondents, 43 per cent expect their situation to improve over the next 12 months. In recent surveys of the wider business community, this number is typically below 10 per cent.'

The luxury of consistent growth across the board was no longer the case.

'We're now seeing tougher times for certain some segments of our industry with some markets well down, when other parts of the tourism economy are still doing well, so is very much more of a mixed outlook at the moment.'

Tourism New Zealand has openly focused on 'value over volume' as a more sustainable option, but some businesses have complained about lack of promotion for the youth and adventure tourism markets which have suffered a significant drop in numbers.

Roberts said they may have a valid point and the industry needed to agree on the definition of a value visitor; and whether it took into account when and where people travelled, as well as their budget.

'We should not fall into the trap of thinking that young people are not valuable as visitors because on a daily basis they may spent less.

'We know they stay longer and they visit more regions, and they often work as well … we're now starting to hear from employers that these working holiday visa people are not coming in the same numbers this summer and that's making the job of finding staff even more difficult.'

The TIA survey found tourism businesses were critical of promotional efforts to attract high value visitors and only 35 per cent said they were reaping the benefits of that work.

Matt Brady of Pan Pacific Travel pointed out that dismissing all but the highest spending visitors was a mistake.

'A visitor that spends $150 per person per day in regions such as Northland, Coromandel and the Catlins is more valuable to that region, as there are probably 500 such visitors to the one spending $1500 per day.'

The need for staff also came through strongly with more than a third of respondents saying they relied on migrant labour, and more than half found work visa issues were a barrier to recruiting good people.