Tourism peak is still up in the air
Consider Ireland, a small island nation of about four million people, with an economy heavily focused on agriculture. It gets about eight million tourists a year.
New Zealand, which is very similar, gets about 3.5 million.
So what’s our peak tourism number?
‘‘We’re getting closer to it,’’ Air New Zealand chief executive Christopher Luxon said. ‘‘As I think about the medium-term, that’s when I start to get a little more concerned about how will the country be handling it.’’
Infometrics senior economist Benje Patterson said: ‘‘We have reached a point where we need to think about how does the tourism sector sustainably contribute to the New Zealand economy.
‘‘It’s probably not just through growing volume, we can grow volumes but at what cost?’’
Auckland Airport chief executive Adrian Littlewood, however, who used the Ireland example, differed. ‘‘No I don’t buy that, nope.
‘‘There are no doubt some things we need to solve but I think they can be solved with proper management.’’
Back to Air New Zealand, though: Luxon said the challenge was all about getting more ‘‘productivity’’ into the sector, where he saw room for at least another $9 billion of value.
Basically, we need to attract more premium visitors who spend more and stay longer. ‘‘That’s really what we want, more valuable tourists, not just more tourists per se.’’
Luxon said the country also needed to think about what he called itinerary innovation, which had lagged.
‘‘Essentially, people are coming and doing a tour of New Zealand and they’re kind of doing a lot of what they did 10 years ago.
‘‘Now there are new things, like Hobbiton’s been created and has been a huge success, [and] Rotorua Canopy Tours … so there’s been some really good innovations.
‘‘They’re important but we need more of them because if they’re quality experiences we can charge more for them which means we can get greater value out of it.
‘‘That’s what I mean by itinerary innovation, which then leads to higher value pricing, which leads to premium tourists, which creates more value, which creates greater productivity.’’
Luxon said the industry was working hard to bring those higher-value tourists.
Getting more people flying during the shoulder or off-peak seasons is also important.
Air New Zealand has worked with regional tourism bodies, councils and mayors to help build a unique proposition for each which the airline then spent hundreds of millions of dollars promoting overseas. Northland was talked about as being the birthplace of a nation with coastal gems, whereas Southland was Bluff oysters and cars.
Patterson agrees with the approach.
‘‘It’s about pushing people up the value chain and trying to create incentives for people outside of those peak times when there’s not as much pressure put on resources and when there is more capacity.’’
The regional aviation market, particularly after Jetstar introduced four regional routes last year, had great fares and meant places like Nelson and Hawke’s Bay were much more attractive destinations.
New Zealand ranked quite low in the world when it came to visitation per population and visits per square kilometre, Littlewood said, meaning there was plenty of room to grow.