NZ tourism recovery marooned: Visitor numbers still at around 80% of pre-Covid levels

Tourism New Zealand is promoting winter holidays in Aotearoa to overseas markets. Photo / Sarah Ivey

Overseas visitor arrivals were 179,700 in May, and have stalled, but the strong recovery of New Zealanders taking trips overseas continues.

Stats NZ monthly figures show the number of visitor arrivals was up by 19,300 from May 2023. The biggest changes were in arrivals from Australia (up 9300) China (up 5400 - although well down on pre-Covid levels) and Taiwan (up 1700).

The plateauing of overseas tourism arrivals - once New Zealand’s biggest source of foreign exchange - has been identified by economists as a drag on the country’s economic recovery.

Of the overseas visitor arrivals in May, 46% were from Australia (compared with 42% in May 2019), 9% were from the United States (8% in May 2019) and 8% were from China (13%).

Tourism New Zealand has switched its focus to promoting New Zealand off-peak to help the sluggish recovery.

Forsyth Barr, in a gloomy outlook for Auckland Airport, 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 development.

The Covid passenger recovery for the airport and New Zealand more widely has stalled.

Forsyth Barr says the most perplexing passenger demand issue is the apparent deterioration of NZ’s attractiveness as a destination.

It has lost share in most of its key source markets since 2019, including Australia, by far its most important.

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 most visitors up to $100 in a visitor levy, nearly three times what it is now.

Compared to inbound tourism, the number of Kiwis taking trips overseas is running hot.

Resident traveller arrivals were 223,400 in May, increasing by 19,800 from the May 2023 month.

That was 95% of the pre-Covid-19 number of 235,200 in May 2019.

Stats NZ says 42% returned from Australia, 7% were from Fiji and 6% were from the United States, all around the same level as pre-Covid levels.

Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.