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Tourism: revenue flat, employment down

Written By: - Date published: 10:00 am, October 29th, 2010 - 41 comments
Categories: tourism, unemployment - Tags:

I’m confused by the up beat coverage of the tourism figures released on Wednesday. Have people actually read the numbers? Total tourism spending was up 2.1% in the year to March. But that’s before inflation. After inflation it was flat. International tourism sector, the part that earns us export dollars, was down 0.4% on top of a 3.6% fall last year. 2,200 fewer people have jobs in tourism than they did a year ago. This in a time of supposed economic recovery.

When you get the the ‘value-added’ part of the tourism industry (that’s the number that actually contributes to GDP) it’s down 0.8% in real terms on top of a 6.5% decline the previous year. Tourism has declined from 4.1% of GDP three year ago to 3.8% this year.

Tourism, along with dairy, is a mainstay of our economy. It is in decline. And that decline will only get worse when oil prices next go through the roof. Our economy is built on two unsustainable foundations. Time to think about change.

41 comments on “Tourism: revenue flat, employment down ”

  1. Shane Gallagher 1

    The county needs a Plan B for when Peak Oil hits. Unfortunately the govt. doesn’t even have a Plan A.

    • Colonial Viper 1.1

      No polly has got the guts to take peak oil seriously. Most people don’t realise that we may have to reduce our energy consumption from 100 energy slaves to just 30 or 40 in the next 5 years. At $3.50/L petrol driving 50 minutes crossing the AKL harbour bridge to get to work is simply not going to be financially feasible for most anymore.

      Hey – don’t both Canada and Venzuela have over 100 billion barrels worth of tar sands each?

      • Lanthanide 1.1.1

        Venezula has ‘heavy crude’, which is a nice term for thick sludge that is like heavy mud. “Light sweet” crude is more like cooking oil, and has the best distillation rates for light products such as jet fuel, gasoline and kerosene. It is difficult to get much of the light distillates out of heavy crude, it’s much better for bunker diesel and bitumen (yes, our roads are made from oil). Obviously drilling for and transporting heavy mud is more difficult than something with high viscosity that runs freely, which further impacts the economic usefulness of heavy crude. Due to the economic superiority of light sweet crude, there aren’t as many refineries in the world that are capable of refining heavy crude, either, so there’s also a bit of a supply-chain capacity crunch also.

        Canada does indeed have heaps and heaps of oil locked in the tar sands, the problem is the extraction rate is something like 2.1M barrels per day at the moment as is forecast to be around 5M/day around 2020 or so, and long-term goals with present and projected technology isn’t much greater than 8-10M/day. It also uses huge amounts of water, creates a lot of aerial pollution and leaves a lot of waste behind in ponds. On top of all of that, the Energy Returned on Energy Invested is quite low, I’ve seen figures bandied about of 5:1, which means for every 1 barrel of oil you consume, you can extract 5 barrels out of the sand. Back in the hey days of easy oil up until about 1950 or so, EROEI is estimated at around 100:1. The current global average comes out to about 30:1. As the EROEI ratio drops, the actual marginal benefit from each barrel oil is greatly diminished, and it adds to pricing pressure. Basically it’s the same as the foolish corn ethanol programme in the US that on some accounts produces less energy than what is take to produce it, or in other accounts is only very marginally positive (something like 1.3:1).

        • Colonial Viper 1.1.1.1

          Thanks for that. I recently became aware that Canada is now considered a ‘petrostate’ and is actively polluting millions of litres of fresh water a day in pursuit of their tar sands ‘wealth’.

          • Bored 1.1.1.1.1

            What amazes me about the “corporates” etc is their total blindness to what is actually of value, in fact criticality to each and every economy and subsequent human component (you and me). The oil will run out, but if you destroy the componentry of the environment extracting and using oil to a degree that it cannot regenerate you have lost ALL subsequent value that we might share from that environment.

            As a minor exercise with a spreadsheet 10,000 cells long, if you valued the environment per annum as a tiny fraction of the value of oil in the A column for each year, and ran the spreadsheet so that oil only had value in the first 200 cells B column cells…….getting the picture. Given that we can get sustained value fro column A for ever, and that B is finite it pretty much proves that oil is actually over time of no real value. Lets face it if you divide a finite number into an infinite number its as close to zero as possible.

            The above might sound like a silly way to ascertain current value, I suspect if you were a human lucky enough to survive 300 years from now you might beg to differ.

        • Pascal's bookie 1.1.1.2

          John Cole on a tangent:

          http://www.balloon-juice.com/2010/10/28/a-culture-of-indifference/

          IN decades, it will be interesting to look back and see how historians are treating this era, and I would not be surprised if they find that in corporate America, at least, the era was marked by a general indifference to anything other than immediate profits. It is amazing how in virtually every industry, from Enron to underwriters to ratings agencies to the banksters and on, quality control and integrity have been replaced with general indifference for the outcomes. Are those bonds really crap? Fuck it, AAA- someone else’s problem. Will they be able to afford that mortgage? Ah screw it, after I get my commission, someone else’s problem. Does this cement really work? Ehh, fuck it. Just do it and it will be someone else’s problem. it really is amazing when you see the rot across the board in every industry, and something to keep in mind for those of us with companies racing to drill the Marcellus shale for natural gas.

    • Draco T Bastard 1.2

      Actually, this government does have a plan. It’s reasonably simple and has two parts
      1.) Remove democracy
      2.) Take all the wealth from the poor and give it to the rich.

      I didn’t say it was a workable plan although they do seem to be getting away with it so far.

    • vidiot 1.3

      Plan B:

      * Dig a bloody deep hole
      * Insert team of Bikini clan super models
      * Have a cave-in, lots of mud
      * Discover that models are trapped 1Km under ground
      * Install 24/7 voyeur-cam
      * Spend 6 months rescuing them
      * Turn rescue plan in to amusement ride for the tourists
      * Sell movie rights
      * Make Movie in NZ
      * Profit

      • wtl 1.3.1

        What can of plan is this? Don’t you have room for a ???? in there somewhere?

      • Bored 1.3.2

        Read this to the office, they all laughed, then asked if they could be extras? Told them only the very short ones could, the tall people said sent it offshore.

  2. Colonial Viper 2

    This in a time of supposed economic recovery.

    Very, very supposed. Lets see how much the unemployment rate drops due to The Hobbit, we can be thankful for that.

    • Lanthanide 2.1

      Interesting point. Now that the Nats have bailed out The Hobbit, there is going to be more political pressure to actually see meaningful results.

      • And tourism will turn round too, don’t forget, because we’re going to spend $10 million making the only DVD extra in the entire history of DVD extras that anyone has ever bothered to flippin’ watch.

        Of course the whole “dressing like Hobbits and living in stupid round houses and being paid in ears of corn” thing may be hard on some of us (especially anyone over 4’9″) and “being ogled by sad acts who create their lives round a mediocre movie” doesn’t look great on a CV, but we should be grateful the whole “issue a Gerryorder to melt us down for glue” plan has been shelved.

        • Vicky32 2.1.1.1

          Although as far as I remember, there were touristy spots on the LotR DVDs as well! (Naturally, we didn’t watch them, although the son watched all the ‘making of’ stuff because he’s into knowing all that ..
          Deb

  3. Lez Howard 3

    Put a competant management team in the railways ,Bung it few dollars get it working Keep Air NZ And Business Round table out of its progress. It has got to save energy for the future Lookat the big Picture

  4. randal 4

    martyg.
    dont argue with our beloved leader and tourism bigcheeze.
    if he says the figures are up then they are up!

  5. randal 5

    ps I notice he has just left on holiday (again) so I guess they are down by 1 at least.

  6. vto 6

    I have always considered the tourism industry to be the industry most at risk in NZ. For a start it is a discretionary spend, not an essential item of everyday living that people need. Secondly, it is very easily upset by political unrest, war, earthquake, flood, terrorism, etc. When people get scared they stay home. And then of course peak oil may upset the apple cart too – though I imagine if the price of oil is enough to stop tourists it will be enough to cause even bigger carnage within the economy elsewhere.

    The end is nigh!

  7. gobsmacked 7

    Questions to the Prime Minister:

    “Why did he appear on Letterman?”

    (Key’s answer = NZ profile in USA, tourism numbers, etc)

    Supplementary: “Since his appearance on Letterman, have visitor numbers from the USA gone up, or down?”

    (Key splutters, “don’t have those numbers with me, but um, here’s a joke instead … “)

    (Labour MP tables the numbers – they’ve gone down).

    (Labour MP tables various quotes i.e. lies from Key after he appeared on Letterman, how important it was for NZ, etc)

    That’s what the opposition should do, but it would require a bit of imagination so… not much chance of that.

    • Lanthanide 7.1

      Very nice, it’d probably get a few headlines, especially if coupled up with some other hard-hitting questions.

  8. Joe Bloggs 8

    Context, context, where’s the context?:

    Australia – tourism flat – 5.6million visitors – no growth in numbers from previous year, spend down, impacted by the Global Financial Crisis and the outbreak of the H1N1 virus
    Japan – Visitor arrivals to Japan fell 18.7% during 2009, outbound Japanese tourism fell for the third consecutive year
    Canada – losing tourist dollars to USA as more and more Americans stay at home
    Venezuela – up 3% YoY but well below the growth rates of the early 2000’s – growth compromised by global economic crisis, great place to visit if you like political instability, dictatorial rule, and revolutionary turbulence

    captcha: hadly – hardly a bad performance when compared with some other countries

    • Colonial Viper 8.1

      Context, context, where’s the context?:

      The context was John Key saying that we would be in a phase of ‘aggressive growth’ – and yes, he knew about swine flu and the GFC when he said that.

      NZ is underperforming critically and NAT has no plan except to hold on to power: something Labour has been saying for some time.

      captcha: hadly – hardly a bad performance when compared with some other countries

      Oh, did you hear that Australia added 250,000 new jobs, mostly full time, to their economy this year?

      How have we done in NZ? Oh, thats right, we’ve LOST jobs in the same time period.

      • Craig Glen Eden 8.1.1

        Oh but CV dont forget the Australians they have all those minerals that they only started mining when National came to power in NZ.

        When Labour was in power in NZ the Aussies didn’t know they had them and so they didn’t mine them and get export income from them????

        Not to worry CV John has it all in hand he will save us just like he saved the hobbit, surely the cycle way with its increase in 100s of jobs and the increase in tourism is closing the wage gap with Australia?
        No!
        Oh shit. Plan B, blame the Union.

    • M 8.2

      ‘Venezuela – up 3% YoY but well below the growth rates of the early 2000′s – growth compromised by global economic crisis, great place to visit if you like political instability, dictatorial rule, and revolutionary turbulence’

      The growth could be from a lot a Americanos checking out South America – I visit a site where this chap is working his way around SA to see which will be the best place to be when when the US finally implodes. He does not want to end up in a FEMA camp and many mothballed military bases have been ‘renovated’ with razor wire for future ‘dissidents’ although I think the US government would have a tough job on its hands in a country with 300+ million firearms.

      After being locked up will these people be up for thermal depolymerisation or the Soylent Green treatment?

  9. Bored 9

    Wheres my f*****g cycleway John boy? Do I have to send the lads round to take delivery? You havent given it away cut price it to some US film corp have you?

  10. Randall 10

    I think the down in tourism is mostly because of terrorist threats or violence being reported that is taking place in a certain country. Terrorism is really the most frightening thing nowadays, but I think, tourism will once again increase once people feel that it is once again safe to travel or tour the world.

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