Tourism boss warns of danger if New Zealand becomes too expensive

Tourism New Zealand boss Stephen England-Hall says the booming tourism industry needs to be careful that visiting here doesn't get too expensive.

He has been in the top job for a year and while surveys show growth in visitor satisfaction, on the ground costs are a threat.

Food, petrol and accommodation prices were perceived as being high but that was not putting visitors off — yet.

''If New Zealand got too expensive we would see a decline in visitor numbers and a demand drop off. You would assume that pricing has not reached a point of no return yet but it is something we are very mindful of,'' England-Hall said.

Research showed as a destination for the average free, independent traveller from Japan who went to Australia and New Zealand, this country was twice as expensive.

''That is a lot, that's something that we have keep an eye on - there's a value for money question there.''

Visitors would be prepared to pay to visit world-class scenic attractions such as Milford Sound.

''But if you hike the price of a one-bedroom three-star motel up $100 they would resist that,'' he said.

Last year international visitor spending reached a record $10.6 billion, largely driven by an increase in tourists from the United States. That was up 5 per cent compared with the year before.

Spending by US visitors was up 18 per cent to $1.3b, probably due to the start of direct flights between Houston and Auckland. Australia and China remain the biggest markets, with Australians spending $2.6b and Chinese $1.5b.

Tourism New Zealand chief executive Stephen England-Hall. Photo / Nick Reed.

England-Hall said the increasing wide dispersal of visitors was good for the regions.

''We've got great numbers and spending at a top line level.''

The well documented pressure on infrastructure was a result not only of international visitor numbers but more Kiwis taking domestic holidays and population growth.

But the problem needed a co-ordinated approach, he said.

''The key beneficiary of tourism is generally central government and the key cost bearer of providing facilities for tourism tends to be local government - this mismatch of cost and benefit is the core issue for tourism.''

Tourism New Zealand gets about $117 million a year from the Government to promote this country overseas.

England-Hall said officials and cabinet ministers were well aware of the issues facing the industry.

His organisation wanted to provide more detailed information about what visitors did in New Zealand to feed into that planning.

He said Tourism New Zealand was not pinning too much hope on a big spin-off from the visit of former US President Barack Obama, who played golf at scenic courses during a two-day private visit.

''How that translates into bookings or attendance or volume will take some time to come through. I would argue that the core golf strategy and the work we do on marketing and key golf events will have a bigger impact on numbers than celebrity engagement,'' England-Hall said.

''If it delivers unanticipated benefits we should be happy about that.''

New Zealand was competing against more countries for visitors as airline networks expanded and travellers were able to research them online.

Besides traditional rival Australia, other countries such as Argentina, Costa Rica, Nordic nations, Switzerland and Ireland offered great scenery but were closer to big population centres.

''We have to ask what more we can add to our story to remain a preferred destination for high-value visitors.''