International visitor spending growth over summer helped boost the coffers of New Zealand’s tourism industry with the accommodation, retail, activities and transport sectors all benefiting.
It was the country’s accommodation providers who felt the most impact with foreign card expenditure accounting for a third of all card spend in the sector and over 55% of growth, according to Paymark.
In the fours months from November to February, foreign card spending on accommodation reached $218m, up 10% on the previous corresponding period, out of a total sector spend of $665m on Paymark’s network, which was up 5.8%. The foreign contribution accounted for 55.3% of total card payment growth in the sector.
International card spend at selected retail shops such as duty free and gift retailers grew by 9.7% to $78m and on activities and events it increased 12.2% to $183.3m. On transport such as airfares and rental vehicles, foreign card expenditure grew 5.3% to $76m.
Credit cards issued in Australia represented the largest portion of foreign card spending, totalling $338m over the four months and comprising 29% of total foreign credit card spending, said Paymark.
“Growth in spending from this source remains strong at 14% per annum. Also strong was spending growth with Chinese-issued credit cards. Conversely UK spending through Paymark declined this summer.”
Origin of foreign-issued credit card spending through Paymark for the four months to February 2018:
|Card issued in:||Spending ($m)||Annual growth (%)|
Total nationwide Paymark spending reached $20.92bn for the four months from November to February, up 5.4% on the same period a year earlier. Payments from foreign-issued credit cards totalled $1.18bn during the period, constituting 5.7% of all payments.
“At the margin, the tourist impact is greater with the annual growth in international credit card spending being 11.3% of the total spending growth,” said Paymark.
The regional mix of international tourist spending over summer showed growth returning to Marlborough following the opening of State Highway 1 in December, resulting in a shift away from neighbouring Nelson.
“Second, there has been strong tourist spending growth in regions such as Otago, West Coast and Southland where international tourism traditionally plays a relatively large role, a likely factor behind the general strong spending growth in this part of the country in recent months,” said Paymark.
“Third, there are also other regions where foreign spending plays a relatively lesser role than domestic spending that have experienced strong international spending this summer, including Waikato, Palmerston North and South Canterbury.”
Strong international spending growth in Auckland and Northland confirmed the reason for the slow total spending growth recorded in those regions was due to domestic factors, likely to be a slower housing market, said Paymark.
About 75% of all electronic card transactions in New Zealand use the Paymark network.