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Tourism Looks Healthy for NZ to 2022
New Zealand tourism shows substantial promise, with a very healthy outlook to 2022. Currently, the tourist sector directly employs 7.5 percent of the New Zealand workforce, and total expenditure was $34.7 billion for year-end 2016. Tourism generated about 5.6 percent of GDP, and indirect value was responsible for an additional $9.8 billion, approximately 4.3 percent of GDP.
The sector employs 188,136 people directly and generates $2.8 billion in goods and service tax revenues. For the period between March 2016 and February 2017, the vast majority of tourists were from Australia, with 1.4 million arrivals. China followed substantially behind, with 400,000 visitors, and residents of the United States, the United Kingdom, Germany and Japan racked up more than 100,000 arrivals each.
Overall, arrivals to New Zealand have risen substantially year-on-year. Of course, arrivals alone are not solely indicative of tourism. Most Australians, for example, arrive on business. Approximately 570,000 Australians arrived for tourism, staying an average of 11.1 days. A much higher percentage of Chinese visitors came here as tourists, with 300,000 arriving and staying an average of 8.8 days. Of UK visitors, just under 100,000 arrived for tourism, with an average length of stay of 27.4 days, and nearly 200,000 tourists arrived from the United States, staying an average of 13.0 days.
Looking Forward to 2022
These figures are only expected to increase as the tourist market within New Zealand grows. An expanding population here brings more people traveling to visit friends and family. While overall spending in the international tourist market is expected to reach $16 billion, substantial revenues are still being generated from local and national tourism.
Naturally, Australia is poised to play a key role in this gradual expansion. Despite worries over the Australian deficit and somewhat sluggish domestic growth, the Australian tourist market is still likely to grow by 3.2 percent annually. With nearly $3 billion generated by 1.7 million visitors, it will remain the largest tourist market.
It’s likely that in terms of spending, the Chinese market will gradually expand to become New Zealand’s largest tourist market by 2018. This growth is partly due to the increasing affluence and expansion of the Chinese middle classes as investment continues to pour into the country. Although investment in China has faltered slightly over the past few years, it’s still increasing, and the consumer economy of 2016 is likely to expand by 50 percent by 2020. This means Chinese consumers will have $9.3 trillion to spend, of which a portion will be spent on visiting other countries. It’s projected that 921,000 Chinese visitors will spend $5.3 billion here.
The United States is the world’s largest economy, and for that reason, substantial numbers of American tourists will continue to visit New Zealand. The number of visitors is projected to rise to 401,000, with the US market being worth $1.7 billion by 2022. This figure does depend significantly on immigration policies, however, and should these policies become more restrictive, it’s possible that these numbers will decrease.
Fears over Brexit have created uncertainty in the UK, but the tourism market nonetheless remains relatively healthy due to substantial family ties between the two countries. The United States — a market that sees $7 billion from UK tourists — is currently seen as an unwelcome place to go due to the current focus on immigration policies, so many are choosing alternative destinations, including New Zealand. Visitor numbers are projected to rise to 252,000, and overall visitor spending will increase to $1.3 billion.
Japan is experiencing a resurgence after various stock market crashes and the continuous economic problems that have plagued the Japanese market. Visitors are likely to rise to 120,000 from 87,000, with spending reaching a total of $340 million. Spending per visitor, however, will likely remain flat. Tension with North Korea creates uncertainty, and should that tension escalate into conflict, it will have a significant effect on the Japanese market.
Overall, the visitor market for New Zealand looks extremely healthy, and the outlook is broadly positive. Regional events may affect some visitor numbers, yet the key target markets are relatively immune, barring global events.
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