New Zealand Tourism Industry Bracing for Tough Year Ahead

New Zealand’s tourism industry is facing a downturn in growth not experienced in almost a decade, but Tourism New Zealand’s chief executive George Hickton says the industry is preparing to meet the challenge.

Over the last couple of weeks, Mr Hickton has been in a series of meetings with the industry in Auckland, Rotorua, Wellington, Queenstown and Dunedin.

Mr Hickton said the feedback from the industry was that many were already looking at the cost-effectiveness of their businesses for the coming summer, with many feeling that summer bookings would be down at least 10%, although the actual decline could prove worse than that.

"People are booking their holidays later because they are worried about job security and that late booking pattern is making it hard to get a clear picture of how things will be in what should be the industry’s busiest period," Mr Hickton said.

Tourism New Zealand’s estimate is that visitor arrivals will be down over the early summer months of November, December and January, a decline which would translate to around a 12% fall in visitor nights because Australian visitors, who make up around a third of New Zealand visitors, tend to have shorter stays.

"Overall, the industry’s feedback was that there might be some short term resilience in summer arrivals because of pre-bookings, but everyone is worried about what will happen from March onwards," Mr Hickton said.

Mr Hickton said that while a lot of ground was covered at the meetings, some themes and issues had emerged across the country as a whole.

One thing that was clear is that the Australian market will become more important to the New Zealand industry in the short term. With almost one million visitors annually, the well-being of the Australian market will be vital in the coming months.

Concern was also expressed about the likely pressure the industry would come under from trade partners to drop prices. The overall hope was that companies would look again at how to add value to their product before considering dropping prices.

There was also some suggestion that corporate bookings are tailing off, however, the backpacker and younger markets are showing some strength.

Emerging markets were also close to the top of the agenda for many in the industry.

Mr Hickton said Tourism New Zealand was keen to investigate new markets and would be reviewing how to fund the initiative.

"Overall, our view is that we, and the industry, need to hold our nerve and to continue to invest in marketing to grow our market share," he said. "This will be a difficult period but we need to be thinking about how to position ourselves for the upturn and the best way to do that is to grow our market share while others around us are cutting back and losing theirs."

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