ASB economists note that the recovery in numbers from some of the early post-pandemic traveling nations such as Australia, the United States and Britain has largely run its course.
Stats NZ satellite account figures showed international tourism expenditure reached $17.2 billion, and contributed 20.4% to New Zealand’s total exports of goods and services in 2019. The last full year of figures since the pandemic show spending was $10.7b to March 2023.
That will have recovered further since, but with reduced numbers, there’s a multi-billion dollar hole in what the country gets from what at times has been its biggest foreign exchange earner.
Forsyth Barr says there’s little sign of an increase in passenger capacity into New Zealand during the next financial year.
Weak cyclical conditions, poor airline economics and the deterioration in New Zealand’s competitiveness as an international tourist destination are impacting passenger growth.
With Air New Zealand’s capacity impacted by its ongoing engine issues, the lack of any growth from other airlines highlights the challenging route economics for New Zealand-bound services.
The subdued recovery comes as the Government mulls charging visitors apart from those from Australia and the Pacific Islands up to $100 in a visitor levy, nearly three times what it is now. The Board of Airline Representatives and others in the tourism industry are concerned the highest option could be another drag on recovery.
The soggy tourism numbers come as outbound travel by Kiwis continues to run hot. Although their desire to fly helps support air links to New Zealand, they are spending overseas instead of here.
Figures for May show the number of short-term trips overseas was running at 95% of pre-Covid levels.
Tourism New Zealand has shifted direction and is throwing its resources into promoting the country from autumn to spring. The off-peak campaign is a long-term one with lofty targets but the agency cautions New Zealand is a long-haul destination for most of our source markets and international tourism is a discretionary purchase.
Weak economic environments and low consumer confidence can impact demand, as can oil prices, geopolitical instability or pandemics.
That puts even more pressure on all businesses within tourism and those setting border charges to get the price of travelling here right. New Zealand can’t be a low-cost option for overseas visitors but it must be a welcoming destination where they feel they get good value.
