Tourism is flatlining: here's what the industry is doing

Saturday, 20 July 2024

The recovery in international tourist numbers has started to lose pace, ASB says.

The tourism industry’s recovery has slowed over recent months, but several new initiatives aim to help boost the industry and grow its capacity.

International visitors contributed $4.5 billion to the economy between January and March this year, the latest International Visitor Survey figures show.

That was an increase of 34% or $1.3 billion on the same time period last year, and meant tourism remained the country’s second largest export earner.

ASB chief economist Nick Tuffley said Stats NZ’s latest migration figures showed short-term international visitor numbers continued to lift, with visitors nudging over 3.2 million for the year to May.

“The recovery in visitors continues and is back to 82% of its pre-Covid level, though this has started to lose pace.”

The new video to promote New Zealand around the world.

He said the recovery in numbers from some of the early post-Covid travelling nations such as Australia, the United States, and the United Kingdom had largely run its course.

“Encouragingly, visitor numbers from China are rebounding more rapidly after a slow start, though they are still only 55% of the level before travel shut down in early 2020.”

Infometrics economist Stefan Rood said sluggish global growth and high ticket prices meant the tourism recovery was stagnating at about 80% to 85% of pre-pandemic arrival numbers, he said.

“Slow Chinese arrival numbers, due to the weak Chinese economy and a possible decline in the popularity of New Zealand as a holiday destination, are particularly limiting the broader pick-up.”

While May’s annual growth was relatively strong, at 12%, future growth numbers were likely to be slower, as monthly arrival numbers from June 2023 onwards had largely tracked sideways, he said.

“Persistently underwhelming tourism arrival figures reiterate that interest rate and cost-of-living pressures are not unique to us, but are rather a global phenomenon.

“However, the more expensive long-haul nature of flights to New Zealand is limiting the tourism recovery beyond trans-Tasman travel, as people typically holiday closer to home when times are tough.”

Now, different tourism bodies have launched initiatives that are intended to help grow, upskill and futureproof the industry.

Embracing sustainability will help the industry remain competitive, Tourism Industry Aotearoa’s Rebecca Ingram says.

Tourism Industry Aotearoa officially launched its new online sustainability education programme, Akiaki – Advancing Tourism, in Auckland on Thursday.

The programme, which was announced at the Trenz conference earlier this year, aimed to prepare tourism operators for the next generation of tourism.

Tourism Industry Aotearoa chief executive Rebecca Ingram said the industry had a clear view of where it was heading and understood its connections, and relationship with the environment.

“Moving towards more sustainable practices is the right thing to do, but it is also about being competitive as a tourism destination. Because sustainability matters to the people coming here.”

Recent research by Tourism NZ and MBIE found that 81% of people considering a holiday in New Zealand have strong sustainability beliefs versus 52% of the general population, and of those 90% will pay a premium for sustainable activities.

But most of the industry was small to medium-sized businesses that did not always have the resources to invest in training and development, Ingram said.

“The new programme equips businesses with the necessary skills to integrate sustainable practices into their operations. This is critical for safeguarding the future of our industry, the natural environment and local communities.”

Hobbiton in Matamata in the Waikato region is a unique attraction that tourists can visit all year round.

It was aligned with the vision of the national strategy, Tourism 2050, for the tourism industry to be prosperous and successful over the long term, she said.

Earlier this month, Tourism NZ relaunched its 100% Pure New Zealand global brand campaign, If You Seek, with a focus on highlighting the country’s year-round experiences.

It came shortly after the organisation announced a strategy to grow international tourism by $5 billion over the next four years, with 70% ($3.5b) of that coming from visitors in the off-peak season.

Tourism New Zealand chief executive René de Monchy said visitor arrivals were returning to old patterns of peaking in summer, and without intervention summer visitors would grow faster than off-peak visitors.

Seasonal peaks and troughs resulted in the sector struggling to operate productively year-round, he said.

“Financial year 2025 is the first of our four-year strategy, and we’ll focus on building a long-term pipeline of visitors at the same time as we aim to boost off-peak visitation by 9.6% ($655m) in this year.”

Tourism NZ’s new strategy would support the Government’s goal to double the value of exports in the next 10 years, and alleviate the industry's seasonal visitation challenges, he said.

“The If You Seek campaign has been incredibly successful over the last two years supporting tourism recovery, and our focus now is on inspiring travellers to choose New Zealand at all times of the year.”

Last week, Tourism and Hospitality Minister Matt Doocey announced the Government was establishing a Tourism Data Partnership Fund, funded through the International Visitor Levy.

Doocey said it would provide up to $400,000 for initiatives to provide new data for the sector, as without high quality data the sector could not adequately plan for anticipated growth.

The investment would facilitate the provision of consistent, reliable tourism data, and that would have long-term value gains and sustainability benefits, he said.

“It will support the Government’s priorities to grow the value of international tourism and hospitality, support regions to maximise the industry’s value, make it easier to do business in the sector, and support the workforce.”