Tourism is thriving in New Zealand and although there was a small dip in visitor numbers in March, plenty of people are still willing to fly into the country.
For the first time since August 2014, annual short-term visitor arrivals failed to mark a new high in March.
However, before alarm bells start ringing, the dip was only about 600 visitors over 12 months and could be down to the timing of Easter in 2016, which was in March.
In addition, March monthly arrivals were up 1.5% — ahead of the expected boost to come from the World Masters Games last month and the June-July British and Irish Lions tour.
ASB economist Daniel Snowden said tourism had overtaken dairy as New Zealand’s top export earner.
Tourism made up 5.6% of New Zealand’s gross domestic product (GDP), ahead of dairy’s 3.5%.
For the year ending December, total exports of dairy and related products were $12.05 billion, accounting for 17.2% of all exports.
But in the same period, tourism (including air travel) was worth $12.17 billion, or 17.4% of exports.
Those December results compared to 18.2% and 16.9% respectively for 2015, showing the increasing importance of tourism to the New Zealand economy, he said.
After those two industries, the next largest export was meat, all the way back at 8.4% of total exports, leaving tourism and dairy well out in front.
The $12.17 billion was just the earnings from international tourism. There was also a thriving domestic industry.
The most recent Tourism Satellite Account data, released annually, estimated domestic tourism was worth more than international tourism, at $20.2 billion in the year ended March 2015, the latest data available.
‘‘This pushes tourism even further ahead of dairy.’’
On a GDP basis, dairy was directly responsible for about 3.5% of the economy. The industry was also responsible for about 1.5% of GDP through downstream food and manufacturing activity, taking the total to about 5%. The tourism satellite account attributed 5.6% to tourism — both international and domestic. A further 4.3% was indirectly contributed.
Mr Snowden said it should be acknowledged measuring tourism revenue was challenging for Statistics New Zealand.
When a cafe in a tourist area served a customer, the customer was not asked where they were from, why they were there and nor was any other exact expenditure recording done.
Instead, Statistics NZ applied a ratio to divide spending to determine what spending was applicable to tourism, which was then further split between domestic and international spending.
‘‘This obviously leaves more room for error than measuring merchandise export shipments.’’
In employment terms, tourism directly employed 188,136 people as at March 2016, about 7.5% of total employment. However, the manufacturing, education, healthcare and construction sectors all individually employed more people than tourism. Dairying numbers were even smaller. A recent study estimated more than 40,000 people were directly employed in dairy. In the year to February 2017, 3.54 million short-term visitors arrived in New Zealand, including people travelling for tourism, visiting family, business trips and other reasons.
The increase to 3.54 million visitors a year had been rapid, Mr Snowden said.
Short-term international arrivals had doubled in just 17 years and one million was added in the last six years alone.
The rapid increase in visitors had put pressure on some resources, leading to price increases. That had, in turn, led to anecdotal evidence some visitors were starting to turn their attention to alternative destinations, although there had been little empirical evidence so far.
The current breakdown of arrivals showed Australia was still the largest source of visitors.
But one of the main sources of growth had been China. Chinese visitors currently accounted for about 12%, treble the 4% seen eight years ago when the size of the tourism sector was substantially smaller. In the March 2017 year, Chinese arrivals reached 400,000.
The third-largest source of arrivals was the US with about 300,000 a year, about 9% of the total.
Spending had also increased in the past 10 years. In 1997, total visitor spending was $3.85billion, according to the international visitor spending survey. By the end of 2016, spending had almost trebled to $10.1billion.
Mr Snowden said the drivers behind the most recent boom were varied. They included the growth of the Chinese middle-class, both in terms of numbers and in terms of wealth.
It was also easier and cheaper to get to New Zealand following extensive growth in the number of airlines flying to New Zealand and the routes opened up.
The impact of the Lord of the Rings and Hobbit films in showcasing New Zealand could not be underestimated.
As well as technological changes and demographic changes, there had also been some event-specific reasons to visit New Zealand, he said.
The 2011 Rugby World Cup and the 2015 Cricket World Cup boosted arrivals significantly. The RWC might also have helped the tourism industry recover from the Canterbury earthquakes faster than otherwise might have been achieved.
‘‘Overall, the New Zealand tourism sector is in rude health. Demand is strong but the main short-term challenge is for the infrastructure to meet demand.’’
