Tourism is an export sector. When international travellers spend freely on the trip of a lifetime to Aotearoa, those goods and services are exports. In fact, tourism was one of New Zealand’s largest pre-Covid export sectors, generating more than $17 billion in export revenue annually. The added benefit is that this tourism export revenue attracts GST, unlike exported beef, lamb, milk powder, kiwifruit, logs and wine. Tourism spreads wealth around the country and, if done right, should lead to dramatic and noticeable infrastructure improvements in small-town New Zealand.
Each of the Prime Ministerial hopefuls should have lots to say about tourism.
As Covid-19 Minister, Hipkins played a central role in determining the fate of tourism businesses during the pandemic. Together with his Cabinet colleagues, Hipkins decided that Covid economic support packages should be “broad-based” rather than sector-specific.
It was entirely predictable that New Zealand’s tourism industry would suffer disproportionately from closed borders and lockdowns. Put simply, there was insufficient support for tourism during Covid and, perhaps more worryingly, insufficient dialogue, communication and collaboration with key tourism industry stakeholders about how best to manage the re-opening and recovery period.
Early in this current election campaign, the Labour Party announced it was making tourism a “top-five priority area” to help drive New Zealand’s economic recovery. There was nothing new in the detail of that announcement - just a rehash of platitudes such as targeting “higher-value” tourists, but no plan for how to do that. Once again, Labour has signalled that it wants to raise the International Visitor Levy to much higher levels than the current $35 per passenger. This is an idea that major tourism stakeholders unanimously rejected when Stuart Nash tried to do it in 2021.
Incredibly, days before Labour’s most recent announcement of a renewed focus on tourism, Grant Robertson had slashed $15 million (or 13 per cent) from the baseline annual funding of Tourism New Zealand, which is custodian of the 100% Pure brand. Under Labour, Tourism New Zealand’s funding has been allowed to wither away. Once the latest cut is implemented, annual baseline funding will sit at just $97m, well short of the $153m needed to keep up with inflation during Labour’s six years in Government.
Chris Hipkins cannot have it both ways. He cannot claim to be prioritising high-value tourism while simultaneously reducing our national marketing spend. Professors at every business faculty in the land will explain to Chris Hipkins how “high-value” or luxury goods typically require a much greater marketing spend than budget-tier or undifferentiated products.
Turning to Christopher Luxon, it is extraordinary that he wasn’t asked to outline his vision for the future of tourism in New Zealand. Here is a man who repeatedly draws upon his past experience as CEO of Air New Zealand, yet Mutch McKay seems to have decided tourism wasn’t a topic worth exploring with him.
The National Party has said that Labour’s tourism budget cuts would remain, since there simply isn’t enough money left in the kitty. With all due respect to the leaders of both parties, this position is nonsense. $15m is absolute peanuts in the context of the flamboyant, vote-winning expenditure and tax cuts floated during the last few weeks.
New Zealand’s disregard for the tourism sector is not going to turn out well. Tourism leaders are uniting around the urgent need for wholesale reform of governance structures and funding mechanisms, both at a national and regional level. Industry has repeatedly come to the table with innovative ideas, including a willingness to consider new national levies if introduced in accordance with best practices overseas. However, politicians and bureaucrats seem fixated on short-term solutions or outright neglect.
Jessica Mutch Mackay and Jack Tame each have opportunities to ask the two Chrises about tourism before New Zealanders start to vote. If the purpose of the leaders’ debates is to educate and inform New Zealanders on issues that matter, Hotel Council Aotearoa is more than willing to help reporters identify some useful lines of enquiry.
Tourism. It’s a magnificent export sector that responds to the fundamental human desire to travel and explore, while showcasing our beautiful country, amazing food and wonderful people.
Tourism should not be a dirty word. The next Prime Minister of New Zealand must have a compelling vision to reshape and reform our tourism industry for the future.
James Doolan is the strategic director at Hotel Council Aotearoa.
