Dynamic shift in world tourism market says PM

New Zealand is experiencing a dynamic shift in the world tourism market which is unlikely to go away in the near future, the Prime Minister and Minister of Tourism told the 2016 Hotel Industry Conference held at Auckland’s Langham Hotel.

He said tourism is obviously booming, with 3.3 million tourists coming to New Zealand last year.

“The stat that’s worth giving thought to is how long it took to go from two to three million tourists. That was 13 years, broadly.

“The question we are often asked is how long it will take to go from three to four million. The answer we give is four years – so it’s very exponential growth.”

New Zealand is looking at success in every market it is targeting. Australia is still our largest source of tourists, and likely to grow for a number of reasons, such as night flights into Queenstown, he said.

“China is our fastest growing market. In broad terms you could say we had about 380,000 tourists from China last year, with the holiday section of that group at 42 percent. So again the question is, how long before we get bigger numbers out of China?

“Well, about 100 million Chinese travelled last year and that’s expected to be 400 million within five years. If you extrapolate those numbers you can start to get a sense of how many will be coming to New Zealand.”

But Mr Key said it was dangerous to get sucked solely into a numbers game.

“The real issue is how good a quality they are, how much they are spending while they’re here, because if it’s just a volume game, New Zealand doesn’t benefit. It’s interesting that value is rising three times as fast as volume. So we have people coming and staying for longer.”

Relevant questions were: “Is this a systemic change, is New Zealand doing better than other countries, and is it going to last?

“I think it is a systemic change. I don’t think it’s going away. I think the number of tourists who will come to New Zealand will just grow and grow.

“Why do I think that? Well, there are a multitude of different factors, but one of them, there’s no doubt, is the emerging middle classes of Asia.”

Importantly, the Chinese – with a population of 1.3 billion – had made a significant policy move that allowed everyone to travel.

“The second part of that is that only about 2-300 million of those could be classed as anywhere near middle income, and that’s not middle income in New Zealand.

Even though there are some “fabulously wealthy Chinese people,” the middle class is still not nearly as wealthy as we would describe middle income in New Zealand or the United States.

“But their market’s growing rapidly and they grow 20 million jobs a year, so there is really quite a big shift that’s happening – and it’s not just in China.”

Countries such as India, Indonesia, Malaysia, and Myanmar all had huge tourism potential, he said. Connectivity is also important and New Zealand is starting to see a lot more one-flight destinations and with more airlines flying here.

“So I think we’re seeing this dynamic sort of shift in the world market that’s just going to encourage people to travel more – and New Zealand’s a very hot destination as part of that.”