City of Sales buoyant but uncharted waters ahead

By Karyn Scherer

Tourist operators throughout New Zealand expect to know within the next few months whether the much-vaunted spin-offs from major events such as the America's Cup will have a lasting effect on their businesses.

After a buoyant 1999, which saw an additional 100,000 overseas visitors pour into the country, the industry is now waiting to see whether such growth can be maintained.

Official figures show Auckland has done particularly well out of the tourism boom over the past year, with tourists spending an extra $87 million on accommodation alone.

However, the figures also show other regions have lost business, with more visitors choosing to spend their time and money in Auckland rather than places like the Bay of Plenty, Coromandel and Northland.

The chief executive of the Tourism Industry Association, Glenys Coughlan, conceded that not all regions had so far benefited from major events such as the America's Cup.

"There's no doubt there's been some displacement in terms of what other parts of New Zealand might be enjoying, but then again those regions that have linked in with the visitor centre at the Viaduct Basin have done really well."

Ms Coughlan acknowledged that some businesses had even higher hopes for a surge in tourist arrivals, and were probably disappointed.

However, the acid test for the industry would come in May, she said, when international travel wholesalers came to New Zealand for the annual trade show.

A record number of local operators have again registered for the show, known as Trenz.

"That's going to be a really good time to gauge just what impact this increase of New Zealand's profile has had on their desire to do business with New Zealand."

New visitor arrival figures released yesterday show the upward trend continued in January, with the number of visitors up by 8 per cent.

Nevertheless, some tourism operators have complained of a "millennium hangover," with many potential tourists deciding to stay at home because of Y2K fears and a desire to spend the millennium changeover with their families.

New Zealand's biggest tourism company, Tourism Holdings, was one business that experienced a dip in business during December and January.

The industry is expecting a similar short-term disruption in September because of the Sydney Olympics.

However, Tourism Holdings' managing director, Dennis Pickup, is convinced the publicity surrounding the America's Cup and other major events will prove invaluable.

"The America's Cup more so than Apec or the millennium had huge impact," he said. "It has put a huge focus on Auckland - the exposure will be worth its weight in gold."

Mr Pickup said forecasts of the likely economic impact of the Cup on the local economy would prove to be conservative.

He also believed the Sydney Olympics would help to promote the South Pacific.

"There's no question that everyone will benefit from the Olympics."

While New Zealand and Australia have often competed in the past to attract the attention of potential visitors, the two markets are becoming increasingly intertwined.

With its acquisition of Australia's largest campervan business, Britz, Tourism Holdings now has a significant investment across the Tasman. Sky City and Air New Zealand are also poised to make major investments in Australia, with the Adelaide Casino and Ansett Australia, respectively.

"We're starting to see that whole growth in transtasman investment in tourism infrastructure, and that means anything that is good for Australia is going to have a flow-on effect in really strengthening a lot of New Zealand operators," said Ms Coughlan.

Meanwhile, at least one sector of the industry is breathing a sigh of relief that the America's Cup is returning to Auckland.

With the racing now over, Auckland hotels are bracing themselves for a possible price war, due to a rash of development which has seen thousands of new rooms come onto the market over the past two years.

The glut of rooms will be made worse this year, with the Hilton opening on Princes Wharf and another major hotel being mooted for the waterfront.

Tourism Auckland chief Lance Bickford agrees it is likely to be a tough winter for many hotels.

"There's still going to be a bit of overheating going on there into the foreseeable future. There's no question we're oversupplied but I guess the good news is that the next Louis Vuitton Cup is only 21/2 years away.

"Hopefully, it will only be a minor blip."