April 29, 2020

Time for kiwis to rediscover New Zealand

At the beginning of this year, it looked like there was a real possibility that the annual number of overseas visitors to New Zealand would crack the 4,000,000 barrier for the first time. But now it will be regarded as something of a triumph if the total for 2020 gets much above 1,000,000.

In January, the number of arrivals was 410,000, which was almost three percent more than in January 2019. However, that was before the dangers of COVID-19 were fully known, and the numbers were already plummeting by the end of February. By early April, the number of arrivals was virtually zero. It also seems unlikely that the number will recover to the recent levels any time soon. Travellers from most of New Zealand’s top tourism markets will be hesitant about leaving their home countries. Our government will be wary of making it easy to enter New Zealand for fear of unleashing a second round of COVID-19 infections. The tourism industry, therefore, faces a prolonged depression, which will spill over into other parts of the economy.

In January, the number of international arrivals was 410,000. By early April, the number was virtually zero.

The amount of pain will vary from place to place, according to the dependence of the local economy on tourism. The table below indicates the Districts that have the greatest and least dependence on tourism. Although it is small in population terms, Mackenzie District is most reliant on tourism, but the larger Queenstown Lakes District is almost as reliant on visitors. Both Districts have more than one-third of their employment in tourism, compared to around seven percent at national level.  At the other end of the scale are Districts (Matamata-Piako excepted) that lack major visitor attractions.

Share of District employment accounted for by tourism
Districts with the highest share Percent Districts with the lowest share Percent
Mackenzie 36.4 Waimate 3.7
Queenstown-Lakes 35.2 Western Bay of Plenty 3.7
Westland 32.3 Tararua 3.7
Kaikoura 31.9 Waikato 3.6
Thames-Coromandel 18.8 South Waikato 3.6
Taupo 18 Matamata-Piako 3.5
Buller 16.4 Otorohanga 3.3
Rotorua 16.2 Clutha 3.3
Ruapehu 14.2 South Taranaki 3.1
Far North 13.9 Central Hawke's Bay 2.9

The problem for the Districts that rely most heavily on tourism is that most of their visitors are from overseas. In Mackenzie District, for example, 70 percent of the visitor spending is by international visitors, while the proportion in Queenstown Lakes is 66 percent. In the near future, when there is likely you be little international travel, these Districts will experience more difficulty rebuilding their economies than Districts, such as Taupo and Thames-Coromandel, which rely more on domestic visitors.

For a good number of Districts, trying to build a future for their economy without a strong tourism industry is simply not realistic.

Some political leaders and commentators have talked about there being no prospect of a return to business as usual, or the need to create a new normal. But, for a good number of Districts, trying to build a future for their economy without a strong tourism industry is simply not realistic. They need to plan to welcome international visitors again some time in the future, but in the short term, at least, they will need to appeal to domestic visitors, It will be a good opportunity for many Kiwis to get to know, or re-acquaint themselves with, their own country.