Rather than just looking at the results for August 2010 let's take a longer term view of what is and has been happening:
The growth in Australian arrivals is responsible for the increase in total arrivals to New Zealand. In comparing year ending August 2010 with the same period in 2008, total arrivals increased by 34,753 whereas Australian arrivals increased 150,793. Without the Australian growth 2010 would have shown negative growth when compared with 2008.
Of the five regions (Oceania, Asia, Europe, Americas and Africa/Middle East) for the year ending August 2010 only Asia and Oceania had increased visitor arrivals. The reason Asia achieved this was because the Swine Flu outbreak decimated the numbers from China, Korea and Japan in 2009 compared with 2008. A comparison between 2010 and 2008 shows that arrival numbers from these three countries were still significantly down in 2010 (China -5%, Korea -29% and Japan -22%). While the increase in arrivals from these three countries in 2010 is positive compared with 2009, to be realistic these data have to be compared with 2008 to provide a more accurate assessment of where we stand with these markets.
If it was not for the growth in arrivals of 8.5% (87,847) from Australia in 2010 there would have been a decline in total numbers from Oceania which accounts for almost 50% of all international visitor arrivals to New Zealand. A slight worry is that the monthly arrival numbers for August 2010 from Australia show a small decline of 0.4% (391). While this is not significant, if it became a trend, it could have major consequences for our ability to recover from reduced arrivals over the last two years.
According to Statistics New Zealand the UK had its lowest August arrivals in 2010 (10,400) since August 1999 (7,900). New Zealand has lost 15.5% (44,852) of arrivals since 2008. In fact UK arrivals have been declining since 2005 when we achieved 308,598 arrivals for the year ended August. This is well before the current recession and therefore indicates that there are other factors leading to declining arrivals.
The only European market of a significant size to show any growth is Germany which has increased year on year since 2005. For the year ended August 2010 Germany has grown 12.6% since 2005.
USA arrivals have been declining since 2006 when we reached 224,101 arrivals for the year ended August. The USA did show some improvement in August this year, but it still lags behind the 11,760 arrivals for August 2005.
With the major markets of Australia (45%), UK (10%), USA (8%), China (5%), Japan (4%), Germany (3%) and Korea (2.5%) accounting for 75% of all arrivals, the other markets have a small impact on the growth of tourism in New Zealand.
The issues for New Zealand tourism are:
A reliance on growth in a low spending Australian market to maintain arrivals during the current recession. How much longer can we mine this market? Is there potential to attract a higher spending/yield market from Australia or will it remain one based on volume?
What are the real reasons for the decline of the UK and USA markets when the drop off in arrivals began well before the recession struck the New Zealand tourism industry? With both these economies struggling when will they grow again or will they continue to flounder?
Will the growth in the Chinese market benefit economically the whole country in the way that the UK and USA markets have or will it remain essentially a north of the North Island opportunity
Which smaller markets have the potential to grow and how do we need to change our product offering to attract new markets. With an ageing international tourism market are we providing the New Zealand experience international visitors seek?
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