Further boom in tourism forecast, infrastructure warning

The Ministry of Business, Innovation and Employment has forecast up to a 40% increase in tourist numbers by 2024 (that’s just 6 years away). The opportunities have been welcomed by Local Government New Zealand, but they have warned that already stretched infrastructure will be put under more pressure.

Tourism Minister Kelvn Davis: Tourism growth forecast to continue

Tourism Minister Kelvin Davis has welcomed new forecasts showing international visitor spending is expected to grow 40 per cent to $14.8 billion a year by 2024.

The New Zealand Tourism Forecasts 2018-2024 were released today by the Ministry of Business, Innovation and Employment.

“New Zealand’s tourism sector is forecast to grow steadily over the next seven years, reaching 5.1 million visitors annually by 2024, up 37 per cent from 2017,” Mr Davis says.

“We expect to see numbers climb fairly rapidly over the next two years, due to favourable economic conditions and better air connectivity, but over the longer term growth will be more moderate.

Mr Davis says a healthy tourism industry is great for New Zealand, though there is work to do to ensure the sustainability of the sector.

“It is important that the Government, councils and industry work together to meet the challenges that accompany the forecast growth.”

It’s worth remembering that John Key was Minister of Tourism for much of the last decade.

Local Government New Zealand (LGNZ): Predicted tourism boom could push infrastructure to breaking point

LGNZ President Dave Cull says that a new forecast predicting an international visitor increase of 37% to 5.1 million annually by 2024 will be a great boost to regional economies across New Zealand, however infrastructure is already under pressure and much more is needed to ensure a fair funding division is achieved between tourists and local ratepayers.

“The tourism sector is predicted to grow rapidly over the next two years, but as evidenced last summer infrastructure it is extremely stretched in many regions, with provision of public toilets, car parks and basic potable and waste water infrastructure coming at a substantial cost to communities,” says Mr Cull.

“Those communities with scale can share the burden across many rate payers, but smaller ratepaying bases are picking up big bills to accommodate visitor demand and the lack of infrastructure is resulting in tension among communities.”

Mr Cull contends that the increase in international visitor spend should be harnessed to provide tourism infrastructure.

“This is about fairness. It’s not right to burden ratepayers with subsiding the entire cost of infrastructure which is used by tourists, and there needs to be a new mechanism for tourism to support itself.”

LGNZ is advocating strongly to Government on councils’ behalf that the Government introduce a Local Tourist Tax to raise the necessary funding to meet the capital and operating costs associated with tourism mix-used infrastructure future demand, thus alleviating the financial burden on local ratepayers.

Without the necessary funding tools to ensure the needs of both locals and tourists are met, New Zealand faces the prospect of over promising and under delivering in a sector that is so critical to our economic future.

“New Zealand should be known as a high-quality tourist destination with fit-for-purpose facilities to handle the expected increase in numbers and a country that welcomes and embraces their visit.”

The forecast is both promising and challenging.

More poor NZ First maths

Some very questionable NZ First spokesperson maths were highlighted recently – see Predator Free would cost ‘trillions’.

In Question Time in Parliament yesterday NZ First deputy leader Ron Mark also indicated he may be challenged by numbers.

2. RON MARK (Deputy Leader—NZ First) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

Ron Mark: Does he stand by his statement that “every region of New Zealand is crucial to our growth and progress”?

Rt Hon JOHN KEY: Yes, in the context I made it.

Ron Mark: Why has the Government, then, given only $12 million over 4 years to councils for tourism infrastructure such as public toilets, when the Government took $630 million net surplus from GST on international visitor spending?

Rt Hon JOHN KEY: I think the member is wrong; the number is higher than that for GST. The Government has been investing very heavily in the tourism sector. It is one of the reasons why it is such an important part of the economy, and we saw 3.3 million international tourists come to New Zealand. What the Government is doing is—for the first time—providing that sort of support for councils. They are free to put in an application, and, I think, from the feedback that I have been getting both as Prime Minister and as Minister of Tourism, a lot of them are going to do that and be grateful. But to argue that that is the only thing that we are doing in terms of supporting tourists is a bit farcical. It includes the $140 million – odd every year we put into marketing. It includes the work we have done around black spots for mobile phones, ultra-fast broadband, and tourist facilities.

Ron Mark: I raise a point of order, Mr Speaker. I specifically quoted the figure $12 million over 4 years to councils in respect of tourism infrastructure—

Mr SPEAKER: Order! Can I have the point of order, please.

Ron Mark: My question is that he has not answered—I ask you to ask the Prime Minister to answer the question.

Mr SPEAKER: Order! No, there is absolutely no doubt that the answer addressed the question that was asked.

First, on the claim of “$630 million net surplus from GST on international visitor spending“. As Key suggests, the value of GST on visitor spending is higher than that.

The latest numbers from MBIE show that in the year to June 2016 visitor spending was $10,276 million. Presuming that is GST inclusive the GST portion of that is over twice the $630 million Mark claimed – $1,340 million. That’s an increase from $1,139 million in the year to June 2015, which is still nearly double Mark’s claim.

But Mark didn’t specify what period his GST number applied to, but tried to compare it to four years of expenditure. GST on visitor spending over the next four years is on track to be well in excess of $5 billion, which is quite different to $630 million.

Kudos to Key for recognising this discrepancy on the fly. A fail mark for Mark on visitor GST.

The second point Key made is on the claim that “given only $12 million over 4 years to councils for tourism infrastructure such as public toilets“.

Mark has mentioned expenditure on only one small tourism policy. Key mentions other areas of spending on tourism.

This MBIE page details these spending announcements from this year’s budget.

  • A new Regional Mid-sized Tourism Facilities Fund of $12 million over four years will be established for smaller scale infrastructure projects that deliver tourism-related facilities(that’s what Mark referred to).
  • Budget 2016 also contributes an extra $8 million over four years for Tourism New Zealand to target key growth markets so New Zealand continues to diversify our visitor base.
  • There will be new funding of $25 million over four years that will enable the, enhancement and extension of Nga Haerenga, the New Zealand Cycle Trail.

This is just additional spending – clearly headlined as a ‘further boost’

Key was a bit off with his estimate of the “$140 million – odd every year we put into marketing”.  From Tourism New Zealand’s 3 year marketing strategy document:

Tourism New Zealand’s budget will increase $29.5m, from $83.8m to $113.4m, for the financial years FY14 and FY15, increasing to $115.8m in FY16 and FY17, enabling significant expansion on Tourism New Zealand’s current activity.

But he was in the vicinity (off the top of his head), and again this is just a part of what the Government contributes to tourism.

Another thing – it would be ridiculous to use all of the GST gathered from visitors’ spending on tourism.

We don’t reinvest all of the GST on other sectors back into those sectors. If that was how things were done there would be little money for New Zealand First to employ researchers (via Parliamentary Services) – but perhaps they don’t use researchers now.

If NZ First want to gain some credibility as being able to hold a crucial role in the next Government then they need to stop making claims that are easily ridiculed.

Chinese ski agreement good for Central Otago

On his trip to China Minister of Tourism John Key has witnessed the signing of a ‘memorandum of understanding’ between the Chinese Ski Association and the Winter Games NZ Trust that could bring big benefits to Central Otago skiing and tourism in general.

ODT reports: China partnership ‘momentous step’

A ground-breaking agreement between the Winter Games NZ Trust and the Chinese Ski Association could be worth millions of dollars to the Central Otago economy.

Real Journeys chief executive Richard Lauder said a memorandum of understanding between the association and the Winter Games NZ Trust, signed in China on Tuesday night and witnessed by Prime Minister John Key, was ‘‘pretty important” in the promotion and development of New Zealand as a skiing destination for the Chinese.

The company bought Cardrona Alpine Resort in late 2013 and over the past two years had been working to attract the Chinese market.

The resort had an agreement with the Wanlong Ski Resort, near Beijing, on employing and training ski instructors.

The Chinese national freestyle team also used Cardrona as a training base during its off-season.

Winter Games NZ Trust chief executive Arthur Klap described the deal as a ‘‘momentous step” for snowsports in New Zealand.

Under the agreement, the association will use New Zealand as its training base and the Winter Games as its competition base during northern hemisphere summers from 2017 to 2021, in preparation for the Winter Olympics being held in Beijing in 2022.

Lake Wanaka Tourism business development executive Geoff Mark said the MoU would reinforce the interest in New Zealand ‘‘as a whole” and would help develop the emerging Chinese ski market, which had begun to grow over the past couple of years.

‘‘If people in China are looking at skiing overseas, they will choose New Zealand.

‘‘The spin-offs for [Queenstown Lakes] in particular will be major and worth millions of dollars to the region.”

Sport New Zealand chief executive Peter Miskimmin said WGNZ was established as ‘‘a key event on the global snow sports calendar”.

‘‘This partnership will deliver real benefits for both countries.”

Tourism in general and especially Chinese tourism is booming, and is one of New Zealand’s biggest economic successes.

It’s not something the Minister of Tourism gets much public credit for. Key is criticised for swanning along and not doing much of importance.

Stuff reported in December: International tourism overtakes dairy to regain top spot as our biggest export earner

Tourism’s $13.5 billion in export earnings has put it ahead of the dairy industry for the first time in five years as the visitor boom continues.

The Tourism Industry Association (TIA) said the figure, drawn from Statistics New Zealand data, was based on the estimated spend by all international visitors, plus airfares. It excluded international students studying here for more than 12 months.

Annual dairy exports totalled $13 billion for the year ended September 2015.

TIA chief executive Chris Roberts said tourism and dairying were both vital to the New Zealand economy, and the recent dramatic growth in international visitor spending highlighted tourism’s important role.

Andrew Little has just appointed Labour’s new shadow cabinet spokesperson Kris Faafoi as Spokesperson for Tourism.

Meanwhile Stuff reports today: Tourism from China will likely outstrip infrastructure, says John Key

Prime Minister John Key is betting his “bottom dollar” that Chinese tourism to New Zealand will reach one million a year, but it is unlikely there is the infrastructure to the numbers.

The “good new part of the story” was tourism had picked up the slack, whereas other parts of the economy had been “a bit softer”, said Key.

“If you think about things like Chinese new year, they’d been a massive boon and extension of the general peak period. There’s no question that we actually do need to build more infrastructure.

“So the air connectivity part of the equation was lifted dramatically, and we’ve seen lots of new carriers return to New Zealand. The point about the infrastructure at the peak is right, we need to build more of that.”

 

The quiet achiever – tourism

Tourism is a quiet but significant achiever in New Zealand, with numbers and generated income reaching record levels.

Radio NZ: Migration, tourism raise economic hopes

The economy has accelerated following a lacklustre first half of the year, when lower dairy prices cast a pall over growth.

Two of the mainstays of growth – net migration and tourism – hit fresh all-time highs last month.

Fewer departures and more arrivals fuelled the sixteenth successive month of record annual net migration gains to 63,700 people, while swelling numbers of Chinese travellers boosted visitor numbers to 3.09 million.

Tourism New Zealand: Bumper start to the summer season for tourism industry

The tourism industry is gearing up for its biggest summer yet after another significant month of growth – international arrivals were up 11.1 per cent for the month of November.

Figures released today by Statistics New Zealand show total international arrivals up 8.9 per cent and holiday arrivals up 13.4 per cent for the full year ending November.

They are significant increases in a year.

Tourism New Zealand Chief Executive Kevin Bowler says all signs point towards another record summer season for the industry.

“The last 12 months have delivered our biggest tourism results on record with arrivals and spend both hitting new highs.

Growth from a variety of markets (arrival figures for the full year to November):

  • China up 39.9%
  • Australia up 6.4%
  • Indonesia up 11.7%
  • India up 22.8%
  • Brazil up 3.6%
  • Germany up 11.1%
  • US up 12.4%
  • UK up 9.5%

Shortage of accommodation and shortage of trained workers are becoming issues. It’s difficult for tourism companies to keep up with this level of growth.

A solid economy is helping grow business like tourism.

One could wonder whether the Minister of Tourism does things other than goof around on radio stations.

John Key and Bill English will look with some satisfaction at the positives.

It’s perhaps significant that the person supposedly being groomed for leadership of National, Paula Bennett, is Associate Minister of both Finance and Tourism.

Clayton Cosgrove is Labour’s spokesperson for tourism. He has been all but invisible this year, but has just recently taken over the Tourism responsibilities from Peeni Henare, who was given the role as a new MP last year.

Labour seem to put a much lower priority on Tourism. Neither Henare nor Cosgrove have issued any press releases on tourism this year.

Tourism set to overtake dairy as largest export earner

It’s often claimed that New Zealand has become too reliant on dairy trade. Milk products are certainly a significant and important part of our economy, but that’s far from all that keeps things ticking over.

While dairy has been getting a lot of the attention the tourism sector has been quietly growing and is set to become our biggest export earner. NZ Herald reports:

Gloombusters: Tourism drives economy higher

New Zealand’s tourism sector is on track to overtake dairy as New Zealand’s biggest export earner and the country will soon crack three million visitors a year.

Tourism has recovered from the hit dealt by the global economic crisis and for the past three years has enjoyed strong growth.

Prime Minister John Key, who is also Tourism Minister, expects this summer to be the country’s biggest for the visitor industry.

“It’s a growth sector and there’s a lot more left in the tank,” Key said.

The latest full year figures showed international tourism expenditure contributed $10.3 billion (15.3 per cent) to New Zealand’s total exports.

Key said recent strong growth had come in spite of a strong Kiwi dollar against main source markets and the more favourable exchange rate for visitors would make this country even more attractive.

And the benefits of tourism are spread around regions (like dairy).

The benefits of tourism were widely spread with most spending outside Auckland, Wellington and Christchurch. Statistics New Zealand figures show the tourism industry directly employed 94,100 fulltime equivalents, or 4.7 per cent of total employment.

The Tourism Industry Association New Zealand agrees with Key’s assessment that another bumper summer season is in prospect.

It has been holding a series of 12 regional tourism summits and chief executive Chris Roberts said the sector was in extremely good heart.

“For many regions, tourism is the bright light when it comes to economic growth.

“We’ve seen good growth in international and domestic visitor spend in the past two years and that looks set to continue,” Roberts said.

This is good news. That’s probably why it doesn’t get much attention in the media.

Nor does it get much attention from the Opposition. Labour’s spokesperson for Tourism is Peeni Henare. He has only a handful of media releases on Labour’s website (four since the election). None of those are on Tourism – he seems more interested in his role as Associate Māori Affairs Spokesperson.

Henare won the Tamaki Makaurau electorate last year, and as a first year MP is ranked near the bottom of Labour’s pecking order.

John Key is the Minister of Tourism, showing a different priority he and National put on one of our biggest markets.

Should ‘kia ora’ be NZ’s national greeting?

According to 3 News:

Should ‘kia ora’ be New Zealand’s national greeting?

Maori Tourism executive Butch Bradley thinks so, and is asking councils to push the greeting, which he says denotes the personality of New Zealand and its people.

Bradley told Radio New Zealand that Kiwis will say ‘bula’ in Fiji, but won’t say ‘kia ora’ when they return home – which he thinks is “nuts”.

The kia ora brand is spreading and Bradley notes that the New Zealand Olympic team had ‘kia ora’ spread across their shirts.

I don’t mind if it’s used by whoever wants to use it as a greeting, and in the tourism industry it’s probably a good idea for some – but even then it’s not only Maori culture that attracts tourists to New Zealand, there’s a lot more to the country than that now.

‘Kia Ora’  doesn’t denote my personality, that’s not dissing the Maori version but that’s simply not me. It’s not what I’d naturally use to greet someone – I usually use ‘Hi’ but also use alternative greetings.

Why do we have to have a ‘national greeting’. We are multilingual, and each language has it’s own variants.

If ‘kia ora’ became widely used it is quite likely it would become corrupted as many English phrases are. For example, ‘Kiora’ flows more easily.

From Wikipedia:

Kia ora is a Māori language greeting which has entered New Zealand English.

It means literally “be well/healthy” and is translated as an informal “hi” at the Māori Language Commission website Kōrero Māori.[1]

The New Zealand Ministry for Culture and Heritage website NZ History lists it as one of 100 Māori words every New Zealander should know, with a definition “Hi!, G’day! (general informal greeting)”