New Zealand’s tourism recovery is getting a boost from off-touring independent travelers

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Demand was much higher than expected, with New Zealand appealing primarily to free spirits from the US and neighboring Australia.

Matthew Parsons

As cruises started taking bookings at the end of the Covid-19 pandemic, Australians Eunice and John Rowley quickly made plans for their first-ever visit to New Zealand.

“We heard on the 9 o’clock news that cruises were on and we had booked two cruises by the afternoon,” said Eunice, who is touring New Zealand with her husband on the Grand Princess.

“We’ve never been to New Zealand, so we thought this is our chance.”

New Zealand’s international tourism sector disappeared overnight when the country was one of the first to close its borders at the start of the Covid outbreak in early 2020.

But since borders fully reopened in August, foreign tourists have been returning and are responsible for one of the key bright spots for an economy struggling against headwinds amid a potential recession.

By January, international visitor numbers had already fallen to two-thirds of pre-pandemic levels, according to the latest data released by Statistics New Zealand on Tuesday.

“There was quite a bit going on across our portfolio,” said Stephen England-Hall, CEO of RealNZ, which operates a range of tourism activities in New Zealand’s South Island, including cruises and jet boat rides.

He said while he has yet to return to 2019 levels, demand in the New Zealand summer has been much higher than expected, with independent travelers in particular fueling the recovery.

He said arrivals at some airports were actually higher than in 2019, but those good numbers were offset by fewer tourists by car, RV and bus.

Before the pandemic, tourism was New Zealand’s largest source of foreign exchange, accounting for about 5.5 percent of gross domestic product (GDP).

The recovering sector is expected to have supported growth in the quarter through December. Data will be released on Thursday and is expected to show a 0.2 percent decline in the fourth quarter.

“Solid Tourism”

Some tourism-related industries have even performed better than before the pandemic.

Food and accommodation is up 10.3 per cent from pre-pandemic levels, according to an analysis of Statistics NZ GDP data for the September 2022 quarter by Wellington-based economics consultancy Infometrics.

Tourists are having to spend more because inflation in New Zealand has nearly hit a three-decade high, but Brad Olsen, chief economist at Infometrics, said it’s difficult to fully understand why the number has risen so sharply.

“Solid tourism activity is likely to partially, but not fully, offset weaker construction, retail and manufacturing activity,” Olsen said.

While tourist arrivals from Australia and the US have returned to normal levels, numbers for several markets, including China, remain well below pre-pandemic numbers.

China allowed group travel to 20 countries in January as it abandoned its strict COVID policy, with New Zealand on that list alongside Thailand and Russia.

The first Chinese groups arrived in February.

“The recovery varies from market to market based on airline connectivity and the late lifting of COVID restrictions last year compared to other countries that lifted travel restrictions earlier,” said chief executive of Tourism Export Council New Zealand, Lynda Keene.

A higher number of Chinese visitors is expected to show up in the February and March data, she said.

“It’s encouraging to see that we’re moving up,” she said.

(Reporting by Lucy Craymer; Editing by Robert Birsel)

This article was written by Reuters’ Lucy Craymer and is legally licensed through the Industry Dive Content Marketplace. Please direct any licensing questions to [email protected].

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