New Zealand’s tourism industry is growing at a rapid pace, presenting immense opportunity for regional economies and increasing jobs in our country.
New Zealand visitor arrivals are expected to reach 4.5 million by 2022, a growth rate of approximately 5% per year driven largely by Chinese/Asian and North American tourists.
We’re a safe place to visit. We have a national brand of ‘100% pure’ that’s attractive to overseas tourists. We have a unique Maori culture and scenic, diverse landscapes around the country to visit.
With changing customer demographics, inbound growth will exceed outbound growth soon, and this means domestic growth will be driven by overseas leisure travellers. In 2016 inbound tourism grew 12%, whereas Kiwis travelling overseas grew 9%.
Tourism growth is naturally a good thing. It’s good for the country and our economy. It’s good for the 19,000 tourism operators spread across New Zealand and for 12% of the New Zealand workforce working in this industry.
Tourism makes up…
- 8% of the New Zealand economy
- 12% of the New Zealand workforce
- 16% of New Zealand’s total goods and services tax
- 17% of New Zealand’s total exports
- 4.5m visitors to New Zealand by 2022
But there are several challenges the industry is facing:
- Pressure on core infrastructure – we have an increasing need for investment to protect the reputation of New Zealand as a favoured destination. Where publicly owned infrastructure is locally owned and used by tourists and locals, the owners of that infrastructure do not always have the means, or receive the benefit, from expanding that infrastructure. As a result, we can get local constraints on tourist routes, and negative effects spilling over into the environment and the community.
- Regional dispersal – we need to ensure visitors are dispersed throughout regional New Zealand – beyond the centres which have traditionally appealed to and captured a large number of domestic and international visitors.
- The impact on communities and our natural environment.
The tourism industry is wholly committed to approaching these challenges so that we can future proof the industry and ensure it continues to grow sustainably. But how?
- With a fresh and genuine approach to travel, creating distinct experiences for all our visitors, we will continue to grow the market.
- There is a way forward to help address the lack of infrastructure we’re facing. Four industry leaders worked together on a proposed funding mechanism (Air New Zealand, THL, Auckland Airport and Christchurch Airport), resulting in a report presented to the Minister of Tourism in late 2016. This led to TIA (Tourism Industry Aotearoa) and Deloitte completing a substantial bottom-up review to verify the financial investment required to make sure New Zealand gets the right infrastructure to support growing visitor numbers. They reviewed hotels, roading, water, public toilets, cruise ship facilities, tramping tracks and huts. The government is involved in this process and is helping to develop plans to find a way of moving forward.
- With a strong economy and increasing tourism, our 16 regions need to focus on creating a compelling and unique regional proposition to help spread the volume of visitors across our beautiful country and into each of our regional centres.
To overcome the immediate deficit in infrastructure investment, an estimate of $100 million needs to be spent now. This level will address the most immediate problems facing the industry as a result of historical infrastructure spend not keeping up with tourism growth.
The tourism industry has an opportunity to preserve New Zealand as a world class destination for the future by establishing an ongoing funding mechanism to ensure our country stays ahead of the ongoing demand and doesn’t fall backwards.
At Air New Zealand we are incredibly proud of the work we have been doing to grow tourism as well as manage some of the challenges that come with this growth, looking at our core tourism infrastructure and how our industry can collectively manage the pressure placed on this in the long term is absolutely mission critical.
We all benefit from a growing New Zealand.
Liz Fraser is General Manager Global Sales Operations & Planning Air New Zealand. Liz Fraser is the GM Global Sales Operations & Planning at Air New Zealand. Prior to this, Liz spent 22 years in media at TVNZ, MSN New Zealand, and as Group Head of Revenue at MediaWorks.