The Chinese market is expected to return to double-digit growth following a period of falling visitor arrival numbers.
Speaking at the Tourism New Zealand Roadshow in Queenstown last week, chief executive Stephen England-Hall said that growth had fallen sharply from circa 30% a year earlier to 0.6% in the 12 months to September 2017.
The two reasons for the drop, according to England-Hall, were a change in the visitor mix, and a change in New Zealand’s visa model which saw a pause in applications.
He said: “A few months ago the USA was going gangbusters and China was going negative, but last month that changed over,” adding that it was “really important to understand why that happened”.
“We have seen a big shift in consumer behavior out of China over the first part of this year. We have seen group travel decline rapidly and FIT travel increase rapidly, so the total numbers and mix and in the market are changing.
“And of course we have seen a change in the visa model. We have changed from a multi-entry single year visa to a new five-year multi-entry visa for Chinese, so FIT travellers can now come to NZ more than once in a five year period on a multi-year visa.
“What happened is that they didn’t apply until that new visa became available which is why we have seen general visa numbers out of China grow 20% since that new visa was launched. But our ABS, or group visitor visas, have declined.”
“What that will look to show up like in the coming months is return to growth from the Chinese market. But it is coming back at a nice 10% or 12% growth rate, not the 30 or 40% that we have seen in previous years.”
He also touched on a recent slowdown witnessed in the American market, related to reduced airline capacity, but added that TNZ has had discussions to encourage the return of a year-round service.
“In the US, on the other hand, we have reduced capacity in the winter period as airline connectivity in the winter period reduces out of America.
“We have just a had a couple of really good meetings in North America with airline partners. We are working pretty hard to get that year-round service returned because we think that is really really key, it is a great segment for us, it performs really well.
“We have done a lot of work with those airline to make sure that is a sustainable ongoing thing, so that’s really what has happened there: a drop off in capacity means there are fewer visitors.”
Overall, he added that TNZ portfolio approach is working well, and serving to protect the market from sudden slowdowns or shocks.
“The key message here is because we manage a balanced portfolio of markets and operate in different markets and different segments at different times of the year, we are able to offset that impact against the industry overall.
“The good news is that it is all going in the right direction even if some markets are up more than others and some markets are down more than others, the overall picture is pretty strong and positive.”