Friday, January 16, 2009

Tourists stay away in droves

"One in five Australians were looking to New Zealand for a holiday in 2009"

Following on from John Key's headline making soundbite last year about tourism taking "a billion dollar hit", our top three international markets of Australia, Britain and the USA have been forecast to fall by 45,000 arrivals.

Our top three international markets are regular users of motel accommodation.

We have found that this subset of international motel dwellers often discover the value and convenience of motels from their 2nd and 3rd visit to New Zealand. Often they will have a connection with friends and family living in New Zealand. They are usualy in the "older" age bracket, have resonable finacial means and are happy to passively enjoy a self drive New Zealand experiance.

All is not doom and gloom.

We hope that the motel industry will not bear brunt of the forecast downturn in overseas visitor numbers. We believe that existing international regular visitors that have already experienced NZ motel hospitality will continue to travel.

Tourism is not all about overseas arrivals. Domestic travelers make up 72% of guest nights at motels. There is the potential for an increased in domestic trade to counter any decrease in overseas visitor nights as Kiwis defer their overseas holiday in favour of taking a break at home.

There is also the opportunity for motels to attract a greater share of corporate guest nights away from perceived higher priced hotels.

The Dominion Post
16 January 2009

A worst-case scenario for the tourism sector could see 45,000 fewer visitors from the top three markets this year.

Ambitious projections of a jump in tourists from Australia have also been dumped.

The predictions of dropping numbers from New Zealand's key tourism markets Australia, Britain and the United States are "on the money", Tourism New Zealand chief executive George Hickton said.

The numbers come from an industry report by Goldman Sachs JBWere analyst Shamubeel Eaqub that picks a drop of 45,000 tourists from those top markets.

With Australians making up 37 per cent of inbound tourists and American and British visitors typically big spenders, Mr Eaqub's "worst-case" predictions equate to $113 million less tourism income in 2009. The figure includes only what the tourists would spend in New Zealand and does not count international airfares.

Tourism Ministry figures picking an almost 4 per cent increase in visitor numbers from across the Tasman this year have been scrapped.

Prime Minister John Key, also the tourism minister, got back to business yesterday after a family holiday in Hawaii by convening a meeting with ministers to discuss the economic crisis.

Ministry spokesman Martin Svehla said the economic crisis since the forecasts were calculated made them redundant. However, Mr Hickton hoped Australian visitor numbers could be maintained and some growth generated in the British market.

He said the US, New Zealand's third largest tourism market, was "drifting away on us".

Opportunities in Asian markets were extremely dependent on what happened to their economies. The only certainties seemed to be a reduction in airfares, and fewer tourists in the short term before a bounce-back.

Previous tourism scares such as the World Trade Centre terrorist attacks on September 11, 2001 had created hugely negative forecasts that never came to pass. "Let's not back ourselves into a corner just yet, it's too early to tell," Mr Hickton said.

But he admitted time was running out as bookings for next summer would be critical for many operators. "That is when they make most of their money. It is more important than winter."

Operators had survived the Christmas and New Year period on bookings made before the economic crisis, but there were no guarantees for the end of this year.

The report picked trans-Tasman travel would be popular as long journeys fell out of favour, a theory backed by House of Travel retail director Brent Thomas.

He expected cuts to fares between New Zealand and Australia would help, as the number of available seats increased dramatically. "Airlines have been fairly aggressive at pricing to stimulate demand. A plane only earns money when it is in the air with people in it."

One-way trans-Tasman airfares were sinking to as much as $169 and could keep dropping throughout 2009. "That is very good value."

New Zealanders were reluctant to cut back on travel in tough times, he said. "They work hard and they feel they deserve a break. They might not replace that TV or replace their car, but they will travel."

Positively Wellington Tourism chief executive David Perks said in such an uncertain climate, PWT's planned $500,000 boost for Australian marketing was even more important. "Australia remains our key visitor market regardless of anything," he said.

A recent survey showed one in five Australians were looking to New Zealand for a holiday in 2009.
Mr Perks said the goal was to beat the market trends and keep visitor numbers to Wellington growing regardless of economic cycles. "If we want to have that impact in Australia, now is possibly the best time."

Source: Click HERE

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