Visitor experience and infrastructure are two primary areas of concerns for operators according to the latest State of the New Zealand Tourism Industry report.
The report, which surveyed 354 tourism operators from around the country, found that although business confidence is strong – with 62% of tourism businesses believing their performance will improve over the next 12 months – they also believe more could be done.
Some 85% of respondents ranked improving visitor experience as the primary lever to advance their business, followed by 82% on improving infrastructure.
According to MBIE’s visitor satisfaction data in the year to August 2017, 93.4% of visitors’ expectations either being met or exceeded. This is a 1.5% decline on the previous year’s results and down from 95.1% the previous year.
The report, authored by Wellington Institute of Technology research and tourism lecturer Jamie Smiler, said this decrease is likely attributable to visitors’ satisfaction levels in regards to the cost and quality of accommodation, food and beverage outlets, public transport and activities.
On infrastructure, comments from survey participants highlighted the need for improved roading infrastructure and the negative impact it is having on visitor experience and regional dispersal.
However, the report noted the findings of the National Tourism Infrastructure Assessment (2017) which suggested roading would only have a moderate impact on tourist growth, and concluded “there is a gap between what the analysis in the National Tourism Infrastructure Assessment (2017) and what industry stakeholders believe will advance their businesses.”
It added that areas of infrastructure that are likely to underpin tourism growth are international air connectivity, domestic air connectivity, worker and visitor accommodation, airports and related facilities, and telecommunications.
TIA chief executive Chris Roberts said: “In a highly competitive global tourism market, travellers have many destination options. Infrastructure is of strategic importance to our international competitiveness. Quality infrastructure is necessary for the industry to deliver a quality visitor experience.”
There was division of opinion among respondents on the challenge of infrastructure funding.
The report said that “many believed that projects should be funded wholly by central government agencies. However, there was also a group that believed that industry funding models need to be considered.”
A theme evident in the comments of respondents suggested that additional central government funding should come from the GST collected from visitors, budget reallocations based on tourism’s contribution to the economy and a border tax. The Auckland Council targeted rate on commercial accommodation providers was seen as offering very little value to the industry, it added.
High-value visitors, increased air connectivity and improved insight were the next tier of improvements that respondents believe have the ability to advance New Zealand tourism businesses on 74%, 72% and 73% respectively.
Infrastructure improvements would also support the industry to grow sustainably, survey respondents suggested. Increased regional dispersal of visitors and an increase in off-peak visitation were other key ways to grow sustainably.
Difficulties in finding skilled staff for tourism businesses were also highlighted by survey respondents.
Robert added: “82% agreed that staffing is becoming a significant issue for New Zealand tourism businesses, compounded by uncertainty over immigration policies. As well as limiting business growth, this also constrains the wider industry’s ability to meet our Tourism 2025 goals.”
The 2017 State of the Tourism Industry paper also included a scorecard measuring the industry’s progress towards the Tourism 2025 goal of growing total tourism revenue to $41bn by 2025.
Moving the needle on productivity and seasonality topped the list of challenges for the industry seven years out from the deadline.
The 2017 scorecard gave a mark of “no progress” in regards to the dispersal of international tourism spend, referred to as productivity, and seasonality.
The snapshot of the current state and performance of the industry found that the gateway areas of Auckland, Wellington, Christchurch and Otago received 64% of international spend, while 36% went to the regions.
This shows just a 1% year-on-year shift in favour of the regions, which took 35% of spend the previous year.
The long term trend shows productivity is now the same as it was in 2014.
International arrivals by season have also showed very little change over the same period with more than 34% of visitors coming in the summer since 2014.
TIA chief executive Chris Roberts said: “With another seven years until 2025 and the industry’s enthusiastic response to the Tourism Sustainability Commitment launched late last year, we are definitely well on track.
“But it’s clear we can do more to ensure that tourism’s economic and social benefits are better dispersed around New Zealand. This will be a focus of TIA’s work through 2018.”
A mark of “progress” was given to the change in tourism expenditure with the three-year picture showing international arrival growth at 28.8%, outstripped by spend growth at 39.4%.
However, the year-on-year figures do not make for such healthy reading.
On the current spend data, which is up for review, overall visitor spend for the year ended March 2017 was $35.9bn – an increase of just 1.9%.
Breaking it down even further shows that domestic spend was up 4% to $21.4bn, however international spend weakened by 0.9% to $14.5bn. International visitor arrivals rose by 8.9% in the same period.
This strong annual visitor arrival growth is also reflected in the long-term data for international arrivals although in there has been a change in growth in individual markets.
After five years of strong growth from NZ’s six largest markets, the year to March 2017 saw a reduction in the growth of arrivals from China – where growth fell from 27.8% to 7%, the UK and Australia.
The US, Japanese and German markets continued to tick up led by the States which more than doubled to 23.3% growth.
One area that showed significant progress was that of air connectivity with international seats now hitting 10m up from 6.7m in 2014.
Domestic growth was also strong up from 13.5m in 2014 to 16.2m last year.
As reflected in the State of the Industry survey, visitor experience, shows that 93.4% of visitors’ expectations were met or exceeded. This is trending down from 95.1% in 2015 but was given the score of “maintained” given that it remains strong.