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New Zealand Tourism after 2020

Written By: - Date published: 7:30 am, March 30th, 2020 - 48 comments
Categories: Deep stuff, economy, tourism, uncategorized - Tags:

Only three months ago our media were lauding the visit of total Tolkein obsessive and massive U.S. entertainer Stephen Colbert.

Now the new Tolkein series is stopped and the studios shut for now. Along with all tourism completely.

Tourism was until March 2020 New Zealand’s largest export industry, worth $39.1 billion.

With the severity of the tourism downturn just beginning to reveal itself and flights unlikely to come back to a full schedule until September from most American and European markets, and likely reduced for years from China, it’s a different story.

We had 3.8 million international visitors arriving in New Zealand last year, and parts of the country were beginning to complain with levels of overcrowding, human waste, and other environmental damage. The need to close the Mermaid Pools in Matapouri earlier this year – that’s a classic of its kind. Locals were just so fed up that they had to put a rahui on it. Notably the new Maori governance of Auckland’s volcanic cones has meant a much better experience of them for visitors and locals alike: they are a lot batter at it than Auckland Council ever was, so there’s a lesson in assertiveness about tourist impact there.

If anyone’s tried to do the Tongariro Crossing in the last decade, well, that’s an object lesson in a completely degraded experience. At least with the other Great Walks they manage it with passes, limits and fees.

And then there was the real estate gold rush of Queenstown, Wanaka and Cromwell based around the boom effect of proximity to Queenstown Airport. Soon you will be able to stand on top of Mt Iron or Coronet Peak and see the current town perimeters as the high-water mark of development pushed by tourism.

The demand for worker housing to serve the tourism industry will almost vanish.

We rode the gold-rush for too long.

The boom is over and tourism is into a brutally hard reversal. We’ve seen negative trends in daily spend and average number of nights spent trends coming for years, such as in the MBIE report from 2013-2019.

I know it’s mean to quote any historic forecast within a sectoral economic strategy right now. But actually many of the elements within the following from the above report may still hold true:

Slow moving structural forces are very much in favour of New Zealand. The centre of the global economy is moving closer to New Zealand as Asia and Africa develop on the back of industrialisation and urbanisation, which will increase the income of a large and youthful population. They will spend more on discretionary and luxury products like tourism. The product offering and engagement for these markets needs to be well aligned to what these visitors want to maximise the potential for New Zealand’s tourism sector.

People from advanced economies have been the main visitors to New Zealand. But these countries’ populations are getting older and their populations and economies will grow slowly. Japan is an excellent case study of an ageing population. Japan is still an important market for New Zealand, but older people tend to travel less and there are fewer younger people, who do travel. This is a risk for the tourism sector.

The long term outlook is positive, particularly from emerging markets like India and Indonesia. Their populations are large and youthful; as their economies approach middle income, demand for travel to New Zealand will soar. These emerging markets present the largest long-term growth opportunities.”

It’s just that we might need to wait five years for those statements to become visibly true again. True the events planned for 2020 such as the Americas Cup and APEC and all the others will give a good boost just as the Rugby World Cup helped push us out of the effects of the GFC. But the events may all be delayed many months into 2021.

The New Zealand government through its tourism agency within MBIE have been setting out a strategy towards gaining more value from tourists
for some time.

So they are fully aware of the need to enable richer, better-spending tourists who stay here longer. It just didn’t alter the industry much.

But we are in the definition of a Black Swan event, for which strategies aren’t usually formed (other than in the Business Continuity sense).

We won’t have to worry about over-tourism any more.

What we can rely on is that our brand is good: we still have the things that people love to come all this way to see. We’re like Patagonia except with more fun, or Iceland and Tromso except we’re an all-season destination rather than a 3-month window. And we’re safe – which is getting more and more important as a choice factor.

The people who will choose to fly or cruise here once this crisis is somewhat settled should be people who make this a once-in-a-lifetime destination only. Unless you can get a four-star rating on your hotel minimum, or a 90% reading on your AirBnB responses, just for God’s sake stop marketing your place to tourists. You’re the wrong choice.

Air New Zealand could cancel half its economy seats so that it’s targeting only the rich who can spend more time and more money, and they know that they’re not going to crowd us out or leave their crap in our streams. Sure, we minions may never be able to afford to stay in Blanket Bay, Huka Lodge, Kauri Cliffs or Helena Bay or renting out The Crib for a season.

But theres no point envying the 1%, so let’s concentrate on taking their money as they enjoy us doing that.

One may well say that this is simply pandering to the massively rich, and in fact begging the 1%ers to save our largest economic sector.

So to be clear: yes I am, largely. We can begrudge their wealth all we like, but we need to find better ways to get those who are bet placed to ride out this very hard recession we are going into, to part with more and more of their salted cash right here.

Mass tourism has seduced us into believing that bulk volumes of people should triumph over quality. It doesn’t need to.

This coming year is the year we take stock of the natural good of our country and price it far higher, for our own good.

48 comments on “New Zealand Tourism after 2020 ”

  1. Treetop 1

    NZ will need to become more self sufficient and some of the tourism jobs could be transferred to the production of food, a product or providing a service.

    Were domestic flights to be reduced travel by rail could be an option. There is always scope for new tourism ventures.

  2. Carolyn_Nth 2

    Recent tourism has been an industry built on air. It has now come down to earth with a big bump.

    Did it increase under John key's watch as Minister of Tourism? Sort of non-grounded stuff he would support.

    NZ needs to focus more on more productive industries for the local economy.

    Mass tourism is non-sustainable and enviromentally destructive. So there have been improvements in managing Auckland's volcanoes? – but still not fully environmentally sustainable. But they got to a stage when they no longer provided the pleasurable walk for locals – just a stroll amongst large crowds, obscuring views while they took their selfies.

    I went for a ferry ride on the Waitemata over the New Year – first time in ages, and it was not a pleasurable experience – again, crowded ferry with loads of tourists, I think from a berthed cruise ship. By the time the trip was half over I was desperate to get off.

    I really don't understand tourism – loads of people travelling around the world in groups, looking at each other.

  3. Quandary – how do I tell an author he's written a load of bollocks without being banned?

    I'm sorry, but there's no easy way to say this: BS.

    We can't afford the rich. The 1% use X% of the world's resources and so on.

    I'm hopeful (but not holding my breath) that when we come out the other side of this covid nightmare and the ensuring depression that will be triggered by it, the world will be a more egalitarian place.

    We have a lot to offer tourists – but the usual 'wild west' attitude we've had to the use of our land and resources – be it forests or gold or crayfish etc, will have to change.

    Set a maximum number of tourists the country can successfully manage while sustaining our environment, and cater for them properly. Make the experience range through all the wealth grades, but put the environment first. Make this country a place it's hard to get to because of a quota, but hell, worth the visit, be it as a rich prick or a back-packer.

    [lprent: You did well – attack the ideas rather than the author. I’m around for attacking the people if they really need it – it is part of my sysop role. ]

    • Carolyn_Nth 3.1

      Yep.

      It should not be our biggest industry.

    • Grumpy 3.2

      …..but you are saying essentially the same thing. To lower the number of tourists and still keep tourism as a major earner we must go for the high end. As the author of this excellent article points out “at least they don’t crap in our streams”.

      • Easily solved. Get rid of the cowboys who rent out older campervans, insist on on-board toilets and make our expectations of lower cost tourists abundantly clear.

        Secondly, don't lets have tourism as a major earner. Lets work in harmony with our environment to make the (fewer) tourists' experiences all that better.

        Not rocket science.

        • Gareth 3.2.1.1

          Lets have more rocket science instead.

        • Graeme 3.2.1.2

          Don't worry Tony, we won't be seeing any freedom campers or low cost tours for quite a while. Once the borders open in 12 – 24 months (would be 6-12 months after a vaccine is available globally) that end of the market won't be able to afford the airfares or the travel insurance.

          Our tourist industry will be domestic only for a couple of years at least when the very top end overseas visitors will start to re-appear. Displaced outbound New Zealanders will fill some / most of the places across most market levels. Our business is next to a hotel that was $600 – 1200 / night depending on room and season, and quite a few New Zealanders would stay there. Then there's the backpackers across the street for $30 -60, sod all new Zealanders stay there.

    • Ad 3.4

      We can't afford not to have the rich.

      The setup that we had and still have is that the 1% rule this country. And the world. There's no Jacobite rebellion on the horizon, so we have to persuade the rich to part with their cash. We sure won't have any.

      95% of the world won't ever come here; only the reasonably well off ought to try.

      Otherwise, I don't think we're arguing.

  4. Graeme 4

    Pretty much spot on Ad.

    Our immediate future in inbound tourism is in the very wealthy, because they will be the only ones able to afford international travel for a while. But that will still be at least well into 2021 or maybe later. The fallout from this won’t be over quickly.

    The sector that will continue the industry will be the displaced outbound New Zealanders. Those that would have gone overseas for their holiday. This comes close to equaling the inbound, and is a lot better for the economy as the money stays in NZ. A lot of inbound has very little benefit to NZ apart through AIA’s dividend.

    As for cruises, don’t think that industry has much future, the law suits after the Princess debacles will finish them. Wouldn’t be surprised if there’s not a lot of them waiting to be run up the beach once India gets back in action.

  5. Anne 5

    I, for one, do not rue the passing of the tourist industry as it has currently stood. It has always seemed to me to be stupid to put all our eggs in the one basket which is pretty much what NZ has been doing.

    And guess who was the principle architect of this modern day obsession with bulk tourism? Yes, John Key. What has NZ got out of it? Degraded beauty spots and loathsome concrete monstrosities to house and feed the tourists.

    And from a personal angle, my local neighbourhood is Devonport – a pretty coastal town/village with considerable charm. Problem is, it has been over-run with tourists around 6 mths of every year for the past 10 years and the signs are apparent. Dirty, crowded main street with cheap and tatty souvenir shops springing up and rubbish on our lovely little beaches and reserves.

    I'll be glad to see the back of them.

    • Ad 5.1

      The hundreds of thousands of New Zealanders reliant on tourism for income, mortgage payments, and a future will be heartily disagreeing with you.

      • KJT 5.1.1

        The ones that would have had much better jobs long term if we had built a real economy. Instead of relying on extractive industries with a short term, future.

        • Ad 5.1.1.1

          No one thought of tourism as short term. Not anywhere. That was the point of providing the MBIE strategies in the post. By any count it was one of the fastest-growing, least-extractive, long term industries that we had.

          Everyone wants better jobs, but few can remember a time before we had the tourism industry.

          It'll come back – just somewhat narrower.

          • KJT 5.1.1.1.1

            "No one thought of tourism as short term.".

            Haven't you been reading here.

            All the posts about how tourism is incompatible, with environmental sustainability, in the long term.

            And the mass tourism industry really became a thing around thirty years ago. When we gave up making things for ourselves. Three million tourists a year is fairly recent.

            It is now irrelevant anyway. We are just going to have to learn to exist without it.

            Just as we learned to exist with all the job losses in the late 80's and 90's.

            At least this time we do not have right wing nutjob Government telling us all to “get fucked”.

      • Anne 5.1.2

        Sure they will but guess what….

        Hundreds of thousands of us lost out jobs in the 1990s and were left on the scrap heap without any assistance. And what's more nobody cared.

        At least this lot have a sympathetic government who is pledging assistance so that the blow can be cushioned until such a time as the economy is back on its feet.

        • Ad 5.1.2.1

          That's all the more reason for you to care now.

          • Anne 5.1.2.1.1

            And who said I didn't care. But the tourism overload in this country is slowly but surely destroying it both socially and environmentally. That simple.

            • Graeme 5.1.2.1.1.1

              You only see the 'tourist' because they appear different. It's the human overload that is slowly but surely destroying the country. New Zealanders are 5/8 of that in number, and from my perspective make 7/8 of the mess.

              New Zealanders are also tourists, about 5 million of us travel within our own country every year, about 3 million of us take a trip overseas some where. We far outweigh in numbers, and come very close in value to inbound visitors. And it's across all value sectors apart from backpacker (but how that is counted tends to make it inbound only) From being at the front line of tourism I can assure you that inbound visitors are generally much more pleasant, better behaved, and appreciative of our country than most of the domestic tourists I deal with.

              • KJT

                Basically saying that the foreign exchange loss from inbound tourists, is going to be less than the gain from the fact, we cannot be,outbound, tourists.

                A net gain in the balance of payments, is it not?

                • Graeme

                  Maybe, maybe not. Need to factor in the reduced economic activity.

                  Greatest pain will a lot of tourism business are totally focused on the inbound product, often in very specific markets, and those products and skills may not transfer to a domestic market. They won't have a business, and with the group tour industry these tend to be big business.

                  It's also been very good times in tourism, people have been doing well and all the lines were going up until around mid December when there was a drop (personal observation and our business only, others say the drop was 6 months earlier but we had our best November ever last year). So a lot of businesses expanding or upgrading and then it all stops. Ooooops……

                  But that's tourism. We're not selling loaves of bread, but helping people spend the very tip of their discretionary spending. The holiday / re-creation is the first spending to be cut. We've been through quite a few downturns in the industry, they are all very sudden and very deep. You learn to be prepared for them and to be nimble with your market and scale.

                  But this one, with the total loss of international travel, definitely for two years, and possibly severely reduced for a generation as this works through the insurance industry, could be another thing. At least tourism is a cash business, you get the cash before you do the deed.

                  The sector I'm most worried about on a human level around Queenstown is the real estate / development one. I've spoken to some normally quite level headed people who are not in a good place. Lots of residential and hotel developments coming up for settlement or well out of the ground. There's going to be tears, and a lot worse there.

                  • KJT

                    I've experienced a sudden loss of livelihood, and having to reinvent myself.

                    So I definitely feel for the workers and small business owners.

                    From the point of our trade balance my, currently, back of the envelope, modelling suggests a net benefit rather than a loss. With no outbound tourism, little spending on imports to service tourists, an increase in local tourism, and the diminishing of environmental impacts, we may be better off over time.

                    We have been pretending for some time, that the necessary adjustment to tourism and other industries, to mitigate AGW, can be put off forever.

                    This could be an opportunity to do that, without dumping the workforce down the toilet. Money, aka, resources, can be put into a more resilient economy.

                    Rather than propping up unsustainable industries, in the forlorn hope that things will always stay as they were, we could take the opportunity to support workers, and businesses, into work that does have a future.
                    Into economic activity that is more internal, and less dependant on things always going well.

                    Into jobs that are less precarious and low waged, than international tourism. Workers may be able to afford both a house, and food, again!

      • Molly 5.1.3

        As someone who worked in hospitality and customer service for quite a few years, those jobs – while providing you with income often put you in a position to experience both the best and the worst of people. I would also be confident in saying that younger females would also have more incidents of harassment to report, both from other staff members and the public.

        There are more than a few that assume that payment for food, entertainment means that they are direct employers – rather than they are being delivered a service by workers. And that old chestnut, "The customer is always right" is often used to excuse bad behaviour.

        While travelling many years ago in Greece, I remember looking around one of the highly touristed towns with signs out the front of cafes saying "Fish and Chips" and "Full English Breakfast" and wondering what the actual locals felt living in such a place where their culture was covered up by the catering to English tourism. It felt like such a loss, both for the tourists who didn't experience anything different, and for those who made a living to cater to such short-sighted tourism.

        As for NZ, I don't know how well our tourism dollars are distributed amongst those who work in the industry. How many zero hours contracts, part-time workers or those not on the living wage? As the costs are socialised amongst ratepayers, and other members of the communities, we really need to have a good look at the business model of distribution before assuming that the amount of income is the only criteria to consider.

        Providing for, or mitigating the effects of visitors is a cost often borne by local authorities and this can be at a cost to small bases of local ratepayers, who often see other essential infrastructure put on hold or deferred. As part of the attraction to NZ, is the natural environment the ability to retrieve costs from visitors is limited, while the damage done to those attractions and the surrounding environs is not. This socialisation of costs, while a small proportion of tourism operators and employees enjoy a good return, is a model that strains the state's provision of infrastructure and contributes towards long-term inequality.

  6. Grumpy 6

    At least the current outbreak of silence from the Greens might continue. A welcome break from the constant bashing of farming and the touting of tourism as the solution for everything, especially regarding the West Coast.

    • KJT 6.1

      Was the expectation that farmers do not pollute, and that tourism becomes environmentally sustainable, to much for you to bear?

    • Ad 6.2

      Be kind Grumpy there's a lot of pain about to hit us all.

      I'm pretty confident the Green MPs particularly Shaw see that.

  7. adam 7

    Not sure we want the rich tourists, as they seem to have played their hand and it's one where average people just don't count.

    https://www.dailymail.co.uk/news/article-8158041/Hot-shot-businessman-linked-Melbourne-outbreak-coronavirus.html

    • Ad 7.1

      Since when have average people counted in a service industry culture?

      Never.

      We serve. And there's no shame in it.

      • adam 7.1.1

        I’m not going to die for some rich prick who wants a holiday, and with him he brings his rotten diseased body into my country.

        Get a grip Ad it’s not about service its about the fact they just don’t give a shit about people not of their class – so FUCK EM. Go infest some other country.

      • Molly 7.1.2

        " We serve. And there's no shame in it. "

        Nice motto, but irrelevant.

        As mentioned before, the industry of hospitality and customer service is not one that promotes egalitarian regard for others. Also mentioned, those working in this industry who are female ( or members of any minority TBH) would have have been on the receiving end of more demeaning incidents courtesy of entitled customers.

  8. Ken 8

    Perhaps we can use this downturn to sort out the overstretched tourist infrastructure.

    Toilets, freedom camping spots, overcrowded walking tracks etc.

    • Muttonbird 8.1

      I was thinking this.

      Tourism will return, NZ will only grow in terms if desirable destinations, but it will take some time.

      That time could be used to create world class infrastructure for all tiers of tourism helping minimise the impact on locals’ lives and the environment.

      This is a great opportunity to really focus on what will make NZ the one of the premium tourist destinations in the world.

      Of course this pandemic has shown how vulnerable the industry is to outright collapse, but it is my hope that the other positive to come from Covid-19 is a far more robust and transparent global alert and response system to the next outbreak. Individual countries and regions within those countries cannot be trusted to respond quickly and effectively.

    • Ad 8.2

      Those are already covered by existing maintenance and upgrade contracts.

      The larger jobs are already let.

  9. Janet 9

    "Tourism was until March 2020 New Zealand’s largest export industry, worth $39.1 billion."

    And how much does the farming sector produce and export ?

    • Carolyn_Nth 9.1

      Tourism overtook dairy in 2017- just:

      For the year ending December last year total exports of dairy and related products were $12.05 billion, accounting for 17.2 per cent of all exports. Over the same period, tourism (including air travel) was worth $12.17b or 17.4 per cent of exports, according to analysis by the ASB.

      • Muttonbird 9.1.1

        Yep. It is sobering to realise what has been taken away from the NZ economy in the last few weeks.

        Imagine if in January you were to say, 'in two months all Dairy manufacturing will be shut down'.

        Well, there would be a meltdown of proportions 1000x what we are seeing now. That is because Dairy think they hold a privileged position far higher than what they actually contribute.

        This eventuality could easily happen – think Mad Cow Disease. M Bovis is apparently manageable but the day will come when a debilitating cattle disease shuts Dairy and meat exports down completely…

        What then for the New Zealand economy?

        • Graeme 9.1.1.1

          Could happen if this has a serious impact on the global economy, and China and all can't afford the luxury of NZ milk powder to feed their infants.

          Fontera can't sell the goods, milk price plummets or severe production cuts, dairy farmers screaming.

      • Janet 9.1.2

        I did'nt ask what the value of diary exports was. I asked what the Farming sector produce and export. Farming includes dairy, meat and wool and horticulture.Do you know this ?

  10. Ed1 10

    "With the severity of the tourism downturn just beginning to reveal itself and flights unlikely to come back to a full schedule until September from most American and European markets, and likely reduced for years from China, . ."

    I'm not sure why China is seen as taking longer. They are further forward in the process than we are; new cases are now largely from people coming in from overseas; they have pulled down some of the large hospitals in Wuhan (but had another case recently int hat city). I know a couple in a city near Wuhan where restrictions on staying in homes have been relaxed – possibly to around the level we are in here, but they are not able to return to New Zealand until internal transport starts again.

    I expect we will continue to require self-isolation or quarantine for people coming in from overseas – regardless of where they are coming from, but in time I expect we will have shorter periods of quarantine for those tested shortly before travel, but it is possible that China may qualify for such lower requirements before some other countries.

    • Ad 10.1

      On why Chinese-origin tourism will take longer to recover:

      My mere reckons is that even though China is recovering from the disease, their economy is so export-focused upon the United States that the economic tsunami of economic damage is reflected back from the California coast and magnified larger to hit China even harder than the United States. You just can't have factories in production when no-one's buying anything. Ergo, no one will be getting paid to take holidays either.

      • Graeme 10.1.1

        China has, and will continue to have very strict controls on anyone entering the country, including returning citizens, until there's no infection spreading in the rest of the world. Those controls could be in place for years.

        And any country that gets on top of covid will do the same to prevent backflow.

        We won't be seeing Chinese tourists, or any inbound tourists from anywhere, for some time.

  11. Bill 11

    One may well say that this is simply pandering to the massively rich, and in fact begging the 1%ers to save our largest economic sector.

    So to be clear: yes I am, largely.

    If they decide to mop up tourist related stuff, then I guess you might just get your wish when those US corporations, in a year or so from now, look around a world of distressed assets going at fire sale prices and wonder what to do with that US$ 4.3 trillion Congress has just gifted them.

    • Ad 11.1

      This current government has made significantly stronger controls on foreign investment, but also some weak calls.

      Even Ngai Tahu will be pushed to hold onto all it is exposed to here.

      This government will have its limits on what it can protect – it's just starting to push those limits.

  12. Hunter Thompson II 12

    For anyone interested in commenting on this topic, the Dec 2019 report by Simon Upton, Parliamentary Commissioner for the Environment, is required reading.

    The link to "Pristine, Popular … Imperilled? The environmental consequences of projected tourism growth" is:

    https://www.pce.parliament.nz/media/196983/report-pristine-popular-imperilled.pdf

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