International visitor influx tops industry predictions
But full recovery still some years away
Overseas tourists are coming back in greater numbers than a leading sector group forecast, but New Zealand’s biggest foreign exchange earner will take three years to get close to full recovery.
The Tourism Export Council forecasts the number of international arrivals will exceed 2.1 million in the year to May 2023, 63.1 per cent of the number in the 12 months to May 2019.
This is up from earlier projections of a 58.5 per cent recovery in numbers in the current year.
The council bases new assumptions on the strength of Australian and United States markets in September arrivals data and Britain, Singapore and Canada performing stronger than first expected.
“We think the positive September arrival trend will continue and be reflected in October and November 2022 results as well,” the council says.
With China still aggressively pursuing its zero-Covid policy and restricting movement through its borders, it is assumed there won’t be visitors returning from that key market until late next year. China was the second-biggest source of arrivals behind Australia before the pandemic and had been projected to become the biggest spenders by 2024. The key influencer on forecasts is the number of airlines, flight routes, frequency of flights and number of seats sold.
The number of visitors will reach 2.1 million or an estimated 63.1 per cent of pre-Covid levels by May next year, and annual visitor spend is forecast to be $7.8 billion. By May, 2024 this will rise to 2.9 million visitors (86 per cent of pre-Covid) who will spend $11.3b (or 83 per cent of pre-Covid). By May 2025 arrivals could reach 3.3 million (98 per cent) and spending $13.3b (97 per cent).
The council has added 12 per cent to per-visitor spending compared to pre-Covid across most markets taking into account higher savings to splurge on holidays and longer length of stay.
The assumptions for 30 countries are based on relaxed Covid-19 restrictions but there remains global uncertainty; the impact of souring economies, Russia’s war on Ukraine and the European energy crisis and how we could benefit from visitors displaced from Europe. Slow visa processing means New Zealand is losing business and there remains a risk of higher
airfares deterring travel into next year. New Zealand could, however, benefit from tens of thousands of soccer fans next winter for the women’s World Cup.
The council represents inbound tourism operators who take bookings sometimes years in advance so has a good insight into demand patterns.
Its chief executive, Lynda Keene, said tourism operators were happy with the current level of demand and projected rate of recovery.
“I think there is some relief that the China market is unable to travel at the moment as it allows tourism operators to manage the level of bookings with a reduced workforce with visitor markets that are currently travelling to New Zealand,” she said.
“Businesses have been sprinting since August 1 [when the border officially opened to all markets] to scale up their workforce and struggling to find skilled and unskilled staff.” In 2019 there were 43,908 Working Holiday Visa holders (WHVs) in NZ.
Keene said there were currently about 17,000 in NZ and that shortfall was putting a strain on many employers.
Latest Stats NZ figures show an encouraging recovery with 104,000 visitors from Australia in September 79 per cent of the same month in 2019, United States 7700 (49.4 per cent) and Britain 5400 (65 per cent).