KEY POINTS:
A report from the Ministry of Tourism shows movements in the New Zealand dollar are not the main impact on tourism numbers.
The research shows that in the long-term, income growth in key markets, not the exchange rate, is the main factor in tourism growth here.
A one per cent growth in world incomes drives growth in tourism numbers by 1.7 per cent.
But in the short-term, the exchange rate does hurt the tourism sector.
Arrivals are only slightly influenced by exchange rate movements, with a 1 per cent increase in the New Zealand dollar reducing visitor numbers by only 0.02 per cent.
Howeve, their spending is "considerably more sensitive," dropping 0.8 per cent for every 1 per cent increase in the dollar.
New Zealanders travelling overseas naturally benefit from a stronger currency, with a 1 per cent increase in the Kiwi dollar increasing outbound holiday travel by 0.87 per cent.
"The research shows that international tourism sector is resilient to, but not unaffected by, exchange rate movements," the Tourism Ministry's research manager, Bruce Bassett, said.
"It shows that even in a high exchange rate environment, the numbers of visitors will hold up very well -- driven by the income growth in our markets."
However, he agreed a decrease in visitor spending could be masked by the growth in arrivals.
Latest figures show that visitor expenditure increased by 0.2 per cent to $6.3 billion for the year to March while international arrivals rose by 2.8 per cent.
Domestic travel also took a hit when the dollar was high and New Zealanders opted for overseas holidays.
Different markets reacted differently to exchange rate movements, the research showed.
Australian and British visitors were not worried by fluctuations in the New Zealand dollar, while German, Japanese, American and South Korean visitors were more sensitive.
The time lag between currency movements and its peak impact on visitor numbers was thought to be between a year and a half to two years.
- NZPA
