Monday, May 17, 2010

More Tourism Corporate Welfare?

John Key's pre-Budget announcement of the redistribution of $30 million into tourism was met with the expected fawning press releases from various tourism organisations last week.

Tourism New Zealand will get a one-off $25 million increase in budget to promote New Zealand  during the lead up to the 2011 Rugby World Cup. Regional Tourism Organisations will get $5 million for joint venture initiatives with Tourism New Zealand.

With this latest announcement, the tourism sector will enjoy corporate welfare of just under $100 million this year. Politically, Key needs to keep his own tourism constituents happy as they will soon have a harsh reality check as increased ACC charges, a rise in GST and the impact of ETS start to hit home.

Outside the blogisphere there appears to be universal approval that the tourism industry needs to be subsidised with public money.

The only disparaging comment in the MSM came from Labour's spokesperson for Tourism, Kelvin "little-school" Davis, that shrieked that "funding fell short of what the industry expected".

With over 70 percent of guest nights sourced domestically, the motel industry relies on a vibrant and confident domestic economy to sustain and grow trade. The motel and greater tourism industry is made up of a network of small businesses that rely on a core base of demand from Kiwi guests. This demand is dependent upon a solid economy, confidence and the ease/cost of travel.

Instead of becoming distracted vying for handouts, shouldn't the tourism industry be looking at measures that would improve the general economy including reducing business costs and asking the government for less?

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