American Airlines is part of a wave of airlines connecting NZ to North America this summer. Photo / Supplied
The surge in airline capacity between New Zealand and the United States has come as the kiwi dollar's dive makes this country more affordable for American tourists.
At the same time, this country is promoting itself hard in the US, a market which before the pandemic was New Zealand's third-biggest source of visitors, worth $1.54b a year.
And while kiwi dollars are not going as far in the US as they recently did, travel agents say there is plenty that travellers can do to cushion the blow.
This afternoon the New Zealand dollar was buying around 57US cents, down about 16 per cent since the beginning of the year.
Auckland Airport says there will be a 20 per cent lift in capacity between New Zealand and North America in October compared to this month, heading towards pre-pandemic levels.
A total of five airlines flying between Auckland and North America offer up to 60 flights per week over summer and the airport's general manager customer and aero commercial, Scott Tasker, said feedback from airlines suggested strong demand.
"Talking to the carriers that are operating, they are reporting strong bookings into that summer peak season which is great," he said.
Auckland will be connected to eight non-stop North American destinations during summer: Dallas Fort Worth, Los Angeles, San Francisco, Houston, Chicago, New York, Honolulu and Vancouver.
While airfares have been high, there are signs of prices levelling off. American Airlines is offering steep discounts on its US network and others such as Singapore Airlines are bringing back reduced early bird fares.
The strong US dollar works in two ways for airlines such as Air New Zealand, whose cost of supplies bought in greenbacks goes up, but that is balanced out by strong demand from those who buy with US currency.
Tasker said the return of more carriers, not only to North America, would be good for consumers.
"I think that that will kind of introduce new options and new competition into the market," he said. "And it can only be positive for New Zealand travellers."
The demand for outbound travel remains strong and he didn't think the falling dollar would affect this.
"Kiwis have taken to travel quite strongly. And I think regardless of exchange rates, and that is because we're looking at visiting friends and relatives.
"It certainly seems to be an effect where people have said, 'well, I'm going regardless of perhaps, elevated airfare costs and kind of a slightly less attractive exchange rate because I'm just so keen to see my family'.''
Tasker said the wave of visiting friends and relatives (VRR) travel was showing signs of easing, but this was being replaced by more leisure travel and emerging signs of business travel returning.
Travel agents are also not seeing any signs of demand tapering off.
House of Travel commercial director Brent Thomas said it had not seen the lower New Zealand dollar having a noticeable impact on recent bookings.
"In fact, this past week at House of Travel has been the highest sales this year as people are locking in their travels to the UK/Europe, the South Pacific and the US for 2023," he said.
After at least two years and in some cases three to four years or longer, Kiwis are keen to reunite with family and friends and get out there and explore the world again.
"They have set funds aside for these trips and the devaluation of the dollar will have minimal impact on their desire to travel."
However, Kiwis starting to plan their 2023 trips may modify their itinerary to fit their budget.
With a lower kiwi they may go for eight days rather than 10 or stay in a 4-star hotel and not a 4.5-star place. Otherwise, they may opt for free, self-guided adventures over paid excursions.
"What we have seen over the past 10 years is, whether the NZ dollar is strong or weak, New Zealanders still love to travel," said Thomas.
And while on-the-ground costs are rising in places like the US, one experienced Hawaii traveller reported from Waikiki this week that a happy hour beer there can still be bought for $5.30. And in other good news, another popular spot with New Zealanders before the pandemic, Japan, is opening up and the kiwi dollar is performing strongly against a moribund Yen. It's up 24 per cent on lows reached during the pandemic.
Flight Centre's general manager of product Victoria Courtney said her firm had not seen any fall-off in demand, especially now that people were travelling for leisure rather just to visit friends and relatives.
She said cruise was a good option for travellers worried about currency and price fluctuations. Cruise fares can cover close to all spending and booking in advance allowed travellers to lock in prices now.
Other advice from Flight Centre includes:
• Book early: "It is important to pre-purchase as much as possible - booking packages, sightseeing, accommodation and transfers when you book flights so you know what you are paying ahead of time and in NZ dollars."
• Widen your horizons: Southeast Asia is a great destination to book in this climate as the kiwi dollar goes further there on the ground. Thailand and Bali offer some good options.
• Where you'll feel the pinch: "Air fares shouldn't see too much of a change at this stage, the real change will be the cost on the ground."
Consumer NZ has also offered advice to travellers looking to save on airfares on Air NZ.
"Generally speaking, people who book earliest pay the least. When flights are in demand, for example during the school holidays and over Christmas, the cheaper tickets sell well in advance," said chief executive Jon Duffy.
"We recommend consumers are flexible with their time and date of travel – as this can lead to savings, and book as far in advance as possible."
The inbound market - hammered by years of closed borders - stands to benefit from the weaker kiwi, down slightly against the Australian dollar and substantially lower against the US currency.
"It's come at a great time for the tourism industry, which has done it really tough for the last three years," said Kiwibank chief economist Jarrod Kerr. "A weaker currency makes us that much more attractive to tourists."
Luxury experiences stand to benefit strongly.
One luxury lodge, The Lindis in the South Island's Ahuriri Valley, says international arrivals are now replacing the strong domestic market into summer.
The Lindis offered all-inclusive suite prices for just under $2000 a night during winter and its visitor mix will be 76 per cent international during January, with those from North America the single biggest group.
William Hudson, managing director of The Lindis Group, said there had been a significant upswing in forward reservations returning from American markets.
"This, coupled with New Zealand international tourism recovering, flight connectivity improving and the significant increase of the USD vs the NZD means we are forecasting that this increase will continue for the upcoming season and beyond."
In Auckland, the Cordis says increased connections with the US would help New Zealand recover from the pandemic.
"These factors will have a positive effect, however the recovery of tourism is a long-haul journey," said Franz Mascarenhas, managing director at the Cordis,.
"As we move into summer, with flights returning and cruise picking up, we are seeing a steady increase in occupancy and with our new Pinnacle Tower and enhanced facilities we are ready to capitalise on this demand," he said.
The Langham Hospitality Group brand was strong in the US with hotels in Los Angeles, Chicago, Boston and New York and Cordis Auckland is expecting to see an increase in activity, "which is already reflective in some of our forward bookings from both individuals and groups."
Listed Tourism Holdings said in its outlook for the current year that there was clear pent-up demand across the wider global tourism industry and an acceptance from customers to meet the current higher costs of travel in rentals, accommodation and flights, after several years of limited travel.
"However, it is unclear whether this trend with customers will continue after the initial wave of return travel is undertaken or whether greater travel costs will impact willingness to travel," the company said as it forecast a net profit of between $17 million and $30.2m.
A Tourism Industry Aotearoa spokeswoman said pre-pandemic research showed that travellers' home economies make a major contribution to their international travel plans.
A downturn in the US economy or a drop in confidence has an impact on the number of US arrivals to New Zealand.
"People are less inclined to travel when they have economic worries. There is a close correlation between the strength of the New Zealand dollar and the average spend by visitors. Like other export products, tourism benefits when the kiwi dollar is trading lower."
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