Hopes airfare war will keep 'em coming

The charms of New Zealand, such as White Island, keep it on Americans' top-10 list. Photo / Alan Gibson

Visitor numbers from the US are expected to be down by 10 to 15 per cent this year, but an airfare war may help stimulate demand.

Tourism New Zealand US regional manager Annie Dundas said New Zealand's third largest market had been more resilient than expected in 2008, but the tide had turned quickly this year.

"Compared to competitors, New Zealand came out better than some."

US visitors to the UK were down 12 per cent while numbers to France dropped 10 per cent.

But the start of the year has seen New Zealand fall to the levels of its European rivals. While official figures have yet to come out, Dundas said US visitors in January were down between 10 and 15 per cent.

The next three months were expected to yield a similar result putting a negative tilt on the year.

But some bounce back was hoped to come from the New Zealand dollar dropping in value and from airfare cuts.

Dundas said airlines had slashed rates in February, and the specials were expected to extend to September.

Airfares were now down as low as US$768 return from Los Angeles.

"We haven't seen fares like that for a long time. It is stimulating a bit of interest."

Tougher competition in the airline market for flights between Australia and the US were also expected to put pressure on Air New Zealand to keep its prices competitive between New Zealand and the US.

A 20 per cent increase in capacity was expected out of Australia as V Australia, the airline owned by Richard Branson's Virgin group, launched flights to the US next week. American airline Delta was also expected to start flying to Australia later in the year.

"New Zealand needs to stay competitive, although I don't think we will get down that low," Dundas said.

Air New Zealand chief executive Rob Fyfe said last week V Australia and Delta would stimulate intense competition on the transpacific route which could have a downside and an upside for his airline.

Some tourist traffic could be drawn away from New Zealand, but as many US tourists visited both Australia and this country, some could be expected to fly home from here providing business for his airline, he said.

Dundas said in the US there was very much a deal mentality for travel.

"Everybody thinks they can get a better deal with someone else."

Dundas said forecasts put leisure travel by US tourists globally down by just 1.4 per cent this year, but business travel had almost dried up completely - particularly for business centres such as London.

"We don't get a lot of business travellers, that is one thing in our favour. Australia does get more so they will probably be more affected than us."

Dundas said New Zealand remained in good stead with American tourists, as it was still seen as being among the top 10 countries to visit.

But spending had been hit by the recession.

"What we are seeing is a trend to less holidays but maybe longer stays. When you talk to Americans they are booking their summer holidays now because they think they can get a good deal.

"But people are more cautious."