Cash injection needed to lure visitors

The tourism sector, riding on a five-year boom fed by blockbuster movies and well-attended sporting events, needs more government funding than ever before to maintain its momentum, key tourism players say.

Based on gross domestic product, tourism is the No 1 contributor to the economy, yet to date neither political party has committed a hard dollar amount to the $17 billion industry.

Fiona Luhrs, chief executive of the Tourism Industry Association, said the new government's tourism marketing budget should be more than $90 million annually in order to adequately lure global travellers.

Luhrs wants to see the global marketing budget match Australia's.

The Australian Government has committed to A$360 million ($394 million) over four years for global advertising, with Western Australia alone earmarking A$38 million to tourism in its last budget.

"Frankly, the size of the country doesn't make any difference," said Luhrs. "We are all trying to compete out there in the same market and getting our message across in the international media."

Late last month, , the Tourism Industry Association put its desires in writing, bending the Government's ear for increased funding for Tourism New Zealand, the international marketing organisation funded by the Government.

It said Tourism New Zealand's purchasing power for international advertising had "significantly diminished" during the past seven years.

"What Australia will be able to afford as a country might not be what New Zealand can afford," said Luhrs. "But, in terms of what's really needed to do the job properly, the level of our voice needs to match theirs." .

The association represents 2000 companies generating 85 per cent of the country's tourism revenue.

While Tourism New Zealand's marketing budget shrinks, the volume of international visitors continues to expand.

International visitors for the first seven months of this year are up just over 5 per cent to 2.4 million people. Since 1999, international arrivals have increased 46 per cent.

But another tourism executive said growth in tourist numbers could not be taken for granted.

"Overseas promotion is vital. The industry fails to be in a position to adequately promote itself because of lack of funds," said the executive, who asked not to be named.

Most of the country's tourism is run by small businesses with fewer than 10 employees and small marketing budgets.

However, what's important to note is that New Zealand grabs only 0.8 per cent of the global tourism market.

Meanwhile, international visitor spending has been nearly flat. Last year, international visitors spent $6.3 billion, a decrease of just over 1 per cent.

The average spending per visitor was down more than 12 per cent during the period. South Korean visitors cut their spending drastically, followed by Germans, while Australians and Japanese spent more.

Some in the industry blame the strong Kiwi dollar for the decrease; others say cheap airfares are attracting travellers who have less to spend.

Cheap airfares are also taking their toll on the domestic tourism sector, which contributes $9.5 billion to the economy, even more than international tourism.

Tough competition among airlines has dropped transtasman fares, making it just as affordable for Kiwis to visit Australia as to stay home.

Labour has said it will fund domestic tourism research from its Vote Tourism kitty, which amounted to $86.4 million this year.

Labour largely takes credit for the present state of the industry. It established the tourism research council and boosted international tourist numbers from key markets such as China and the United States.

National too has talked about supporting more research into domestic tourism.

POLICY HIGHLIGHTS

National

* Remove caps on workplace training and skill development.

* Invest in infrastructure, especially roading.

* Amend employment laws, such as the Holidays Act.

* Require the Department of Conservation to better support tourism.

* Support more industry research, especially in domestic tourism.

* Continued support of international marketing.

Labour

* Promote domestic tourism.

* Collaborate with industry on skills training.

* Review the New Zealand Tourism Strategy 2010 to reaffirm or adjust recommendations that are now five-years-old.

* Continued support of Tourism Research Council.

* Continued promoting of New Zealand globally.