KEY POINTS:
The tourism sector could be hit this year by the worst downturn it has faced, according to one analyst.
Goldman Sachs JBWere director Shamubeel Eaqub believes international visitor numbers will fall by 5.3 per cent in 2009, followed by a further fall of 0.2 per cent in 2010.
Last year they were up 0.9 per cent.
Eaqub said comparing his forecasts with previous downturns showed this year could be the "worst case" scenario for international arrivals.
"The outlook for arrivals is challenging," he said.
The main influencing factor was the global recession.
"With a sharply weaker global growth outlook, arrivals have already taken a hit and our estimates suggest there will be further weakness in coming months."
But he was less pessimistic on New Zealanders taking overseas trips, predicting short-term departures would fall 1.9 per cent this year but bounce back to 2.5 per cent growth next year.
"While the slowing economy has slowed departures growth, we believe more competitive airfares - due to reduced demand and falling oil price - will provide a sufficient cushion to moderate the downswing."
However, Eaqub said the timing of the downturn, coming in New Zealand's critical summer months, could have a widespread impact on tourism operators.
Tourism Industry Association chief executive Tim Cossar said the predictions held no surprises for the industry. "The projections before Christmas were not dissimilar to this. Everything we have seen indicates this is one of the most severe downturns the industry has faced. We've known for some time that this is not business as usual."
Cossar said feedback from operators over the Christmas holiday period had been relatively positive but showed tourists were booking later than normal.
"Travellers are reducing their booking times to two or three weeks before they travel, which increases the uncertainty for tourism operators and makes it harder to predict the impacts of the downturn."
Cossar said Australian and domestic travellers would be crucial in offsetting the fall in international demand.
"They need to be our absolute focus, along with new and emerging markets."
However, Cossar said falling numbers did not necessarily mean operators were getting less in their pockets.
"Some operators are saying they are getting higher yields from lower visitor numbers because they have more time to spend with visitors.
"The lower New Zealand dollar also means that travellers have more money to spend while they are here."
He remained confident that tourism would be one of the first industries in New Zealand to recover from the global downturn.
"The New Zealand tourism industry has proved very resilient in the past to international shocks like the September 11 attacks and Sars. That quick response time will be more important than ever this year to adapt to the rapid changes in the international marketplace."
