Tourism expenditure encouraging

New figures released which show tourism expenditure increased by 1.1% to $21.7 billion in the year ended March 2009 are encouraging news for the industry and New Zealand, says Tourism Industry Association (TIA) Chief Executive Tim Cossar.

The Tourism Satellite Account (TSA): 2009, published by Statistics New Zealand, shows that the overall increase in expenditure was driven by Kiwi holidaymakers spending more at home, with domestic expenditure in the year ending March 09 up 2.6% to $12.4 billion on the previous year.

“The domestic market was stronger than many had been expecting, given that New Zealand was in recession, and highlights its importance to the industry in terms of diversifying risk.”

International visitor expenditure fell by 0.9% ($87 million) in the year ending March 09 to $9.3 billion. “The relatively small size of that decrease shows the resilience of the tourism industry in what has been one of its toughest trading environments in decades, with many of our major international markets suffering dramatically from the world economic downturn,” says Mr Cossar. 

He adds the impact of the global recession was softened by the excellent growth in arrivals out of Australia, New Zealand’s largest international visitor market.

The TSA also reinforces that tourism is one of New Zealand’s most important industries, accounting for 16.4% of exports, and directly employing 4.9% of full-time equivalent employees, an increase of 0.4% from the previous year.

Mr Cossar cautions however, that while some tourism operators are performing very well, others are still struggling from a big decrease in demand.

“This is an immensely diverse industry, in terms of both the size and types of operators. While overall these expenditure figures are good news, it is certainly still a very challenging time for many.

“The trend towards much shorter booking times makes it difficult to forecast summer performance with any degree of accuracy. The high New Zealand dollar is probably the biggest short term factor affecting the industry, with the potential to impact negatively on people’s decision to travel here, and to restrict spending for those who do come.”

However, he says this may be balanced out by a high Australian dollar, and continuing strong growth out of that market, 40% of inbound arrivals and growing.