Australia to remain NZ’s visitor backbone as Chinese spend accelerates

Sydney Harbour Bridge, Sydney. Credit: Tourism Australia

Australia will continue to be the backbone of New Zealand’s tourism industry despite growth from the China-led Asian markets.

Speaking at TRENZ, Ministry of Business, Innovation and Employment (MBIE) general manager, Michael Bird, said that Australia is forecast to remain New Zealand’s largest visitor market by volume over the next seven years.

Presenting MBIE’s New Zealand Tourism Forecasts 2017 – 2023, Bird said arrivals from across the Tasman will increase 3.2% per year from 1.4m last year to 1.8m in 2023.

Spend by Australians will rise by 3.1% annually to more than $3bn in the same period.

This will contribute to a total of 4.9m visitors to New Zealand spending $15.3bn in 2023 – a hike of 52.1% over seven years.

However, Bird warned that New Zealand may face increasing competition for Australian tourists from Asian destinations that have “broadening appeal” over the longer-term.

While Australia is forecast to continue to deliver the greatest number of visitors to New Zealand, it will be overtaken by China in terms of spend.

MBIE forecasts annual Chinese visitor spend to rocket from $1.7bn last year to $4.3bn in 2023 on the back of 14.8% annual growth.

At the same time Chinese visitor arrivals will more than double from 410, 000 last year to 913,000 in 2023.

This reflects a growth rate of 12.1% per annum, supported by the view that the slowing of Chinese visitor numbers in early 2017 is short-term.

Again it is connectivity driving growth, with an enhanced air service agreement likely to prompt an increase in Chinese visitors alongside changes to the duration of the visitor visa according to the report.

The New Zealand-China Year of Tourism 2019 is also expected to support this growth.

The bullish forecasts are caveated, with MBIE noting significant “geopolitical risk around the China market” adding “some risk to both China’s and the national forecast numbers, particularly due to the relative importance of the China market to New Zealand.”

While Australian and Chinese arrivals are expected to make up 55% of visitors in 2023, other Asian markets are forecast to play a greater role due to their proximity and growing middle-class population.

Tourism New Zealand’s recent marketing focus on the emerging markets of India and Indonesia is expected to start paying off, while moderate growth is forecast to continue from Japan and South Korea.

Indian visitors arrivals are forecast to climb by 8.5% per year delivering 92,000 visitors by 2023, while Indonesia’s growth rate is put at 9.8% pa or 38,000 visitors in 2023.

Outside of Asia, the US is forecast to outstrip growth from the UK and Germany in Europe.

Visitor arrivals from North America are expected to rise by 6% per annum to 440,000 in 2023, while spend grows by 6.5% a year to $1.7bn.

New Zealand remains a popular choice for German tourists with growth of 5.8% pa expected in visitor arrivals to hit 144,000 annually in 2023.

The UK is hampered by economic and political uncertainty with visitor arrival growth of just 2.8% expected, and sluggish spending growth clocking in at 2.5% pa to $1.1bn in 2023.

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