In Part I we highlighted high level statistics around the New Zealand international tourism industry. Part II focuses on some interesting tourism trends that have developed over the last few years.
In aggregate, just over 80% of international visitors arriving in New Zealand for the calendar year ending 2015 classified themselves as “leisure travellers” – those either on holiday or visiting family and friends. By comparison, 88% of Chinese visitors classified themselves as leisure travellers over the same period. This is up from 80% in 2008.
Breaking down the statistics further, 77% of Chinese visitors said their main travel purpose was for holiday versus only 50% for all international visitors.
Given the higher proportion of Chinese holiday travellers, this puts significant pressure on our domestic accommodation facilities. Currently 75% of Chinese visitors stay in hotels and motels versus around 55% for all international visitors.
From a hotel operator’s perspective, business has been booming, hotel occupancy rates have never been higher, and are setting new records each period. Currently, the highest occupancy rate was recorded in the first quarter of 2015 at 72.5%, while the previous high of 67.6% was recorded in first quarter of 2014. In fact, we would have to go back to 2004 to see similar occupancy rates.
While high occupancy rates are generally positive for the hotel and broader tourism industries, it also creates some unique challenges that must be carefully managed, including ensuring that the visitor’s experience is not compromised by potential room shortages and higher room rates.
Another trend which has occurred is the progressive increase in average length of stay for Chinese visitors. Historically, the average Chinese visitor stayed for significantly shorter periods of time than visitors from other nations, with short term (1-3 day) travellers being the norm, accounting for nearly 55% of all Chinese visitors in 2008. However by 2015, only 37% of visitors stayed for 1-3 days while the fastest growing segment was the 8 – 14 day travellers.
There are three main drivers behind this change:
- Thanks to clever marketing schemes by Tourism New Zealand, airports and airlines, New Zealand is increasingly being perceived as an independent travel destination as opposed to a destination one visits when planning a trip to Australia.
- There has been explosive growth in free independent travellers – visitors who are not travelling with a tour groups. Free independent travellers usually stay for longer and visit more destinations.
- Strong economic ties allowing better air service agreements, in 2014 a new Memorandum of Understanding was signed which doubled the maximum number of direct flights allowed between New Zealand and China. This increase in direct flights bypassed the need for visitors to travel through transit ports such as Sydney or Hong Kong when coming to New Zealand.
Having more Chinese holiday makers staying longer is a net positive for our local economy. But we must be careful to ensure that our domestic facilities are adequately equipped to handle the increase and ensure that our clean, green environment is preserved for future generations to enjoy.
Disclaimer: This is intended to provide general information only. It does not take into account your investment needs or personal circumstances and so is not intended to be viewed as investment or financial advice. Should you require financial advice you should always speak to an Authorised Financial Adviser.