GONE! $125m wiped from Rotorua GDP as businesses pivot for future
Rotorua’s soaring house market has not sheltered the city from a stiff economic decline as tourism continues to struggle and $125 million is shaved off the district’s GDP.
But business leaders say despite the knocks other primary industries are performing well and companies had pivoted to make the most of every opportunity.
The latest report from Infometrics shows the city’s economy has continued to contract with the absence of international tourists and their spending fell by 21 per cent over the year to December 2020.
Over the same timeframes, GDP dropped by 3.4 per cent to $3.68 billion, consumer spend nosedived by 5.4 per cent and house price inflation accelerated by 27 per cent.
Rotorua Economic Development interim chief executive Andrew Wilson said 2020 was a mixed bag but it had diverse primary industries to build on.
Sectors including forestry, agriculture, wood processing, manufacturing, construction, grocery and professional services were doing very well.
But those involved with the visitor economy had suffered.
“While business confidence is much lower in this sector, the challenge of the last 12 months has also stimulated a lot of innovation from Rotorua businesses working hard to create interesting new products that are focused on the needs of New Zealanders.”
Pre-covid, 60 per cent of tourists visiting Rotorua were domestic and it continued to actively encourage New Zealanders to travel to the city while business events were another focus.
“This contributes $50m to our local economy each year and business travellers typically come here during the week and off-peak season. We’ve launched a new marketing campaign promoting Rotorua as a destination for business incentive travel and team building events.”
Infometrics senior economist Brad Olsen said it was still incredibly tough in Rotorua for the economy and businesses.
He agreed domestic tourism was trying to pick up some of the slack from international visitors.
Another challenge for Rotorua was competition from other cities chasing the tourism dollar, Olsen said, but forestry and agriculture were trending.
“Global dairy trading has shown