Exports

Too many tourists in New Zealand? The numbers tell a different story.

Monday August 01, 2016 Mark Cox

Almost every day, our newspapers and news websites carry stories about tourists causing traffic problems and road accidents, or about freedom campers despoiling popular locations by using them as lavatories. One of the underlying messages is that the country is being overrun by visitors.

 

But is this really true? Visitor statistics for other countries of a similar population size to New Zealand suggest otherwise. And, indeed, they suggest that New Zealand really ought to be able to accommodate a lot more visitors.

 

The graph below is based on the number of international visitors to countries that have populations in the range 3 to 6 million, i.e. broadly similar to New Zealand’s current population of around 4.7 million. It shows the ratio of the number of visitors to the population size, and it implies that New Zealand has around 600,000 visitors per million of population.

 

More importantly, the graph reveals that a number of other countries of similar population size have much higher visitor: population ratios. Slovakia has about twice as many international visitors as New Zealand per million of population. Denmark and Ireland both have around three times as many. Singapore has almost four times as many. And Croatia has around five times as many.

 

ratio of tourist arrivals to nat pop

 

It appears, therefore, that New Zealand actually has relatively few international visitors, relative to the size of its population.

 

It might be thought that this is because New Zealand is relatively small geographically but, again, this isn’t the case. Admittedly, a lot of the land mass in New Zealand is mountainous, but it is actually 20% greater than the land mass of Croatia, Singapore, Ireland, Denmark and Slovakia combined.

 

The truth is that New Zealand ought to be able to welcome many more international visitors than is the case at the moment. The problem is not that the country is too small in terms of population and land mass; it is that the country is under-invested in visitor accommodation, visitor attractions and public amenities.

 

Tourism has helped to underpin the growth of the economy, especially in the past two years. Looking ahead, the Tourism Industry Association New Zealand (also known as Tourism Industry Aotearoa) has a strategic aim of increasing tourism revenue by around 30% between now and 2025. This will be important in terms of sustaining economic growth but, if anything, this aim is somewhat modest.

 

A more ambitious aim would be to double tourism revenues within a decade. This would require a compound growth rate of just over 7% per annum. And while this might appear to be a breakneck speed, it should be noted that international visitor numbers increased by 5.7% in the year to June 2014, 7.4% in the year to June 2015, and 10.6% in the year to June 2016: an overall increase of 25.5% in just three years. Visitor spending increased even faster.

 

Where will the extra visitors come from? On the back of a rapidly growing economy, visitors from China have been quickly increasing in number for a few years now, but the economies of other countries in South and East Asia – such as India, Indonesia, Malaysia and the Philippines - are also growing rapidly. Their middle classes are burgeoning, too. New Zealand’s tourism industry can benefit from this growth, if the necessary efforts are made to welcome and accommodate newly prosperous visitors.