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Tourism set to overtake dairy as our top export

By Nina Jensen

New Zealand tourism is “on a roll”, with experts predicting the country’s second top export earner to take over  from dairy in the near future.

Dairy earned $12 billion in the June 2015 year, down from almost $16b last year, according to Statistics New Zealand.

Spending by international visitors increased $2.4b to reach $11.7b this year.

ASB rural economist Nathan Penny said there was a “double rainbow” for tourism due to strong numbers of Chinese tourists, which fuelled an increase in tourism numbers over the past year, and higher spending by visitors.

Changes to visa requirements meant there were more independent travellers, which led to higher spending on a per day basis.

Penny said he expected to see more spending by visitors this year due to the lower New Zealand dollar.

New Zealand’s dairy industry was hit hard this year, with a global decline in prices and lower Fonterra payout for farmers at the start of the 2016 season.

Compared with tourism, the future for the country’s top export earner seemed bleak but Penny said there was hope on the horizon.

“The dollar is good for all exporters so at the moment, low global dairy prices  are dominating that effect. Eventually that will help lift dairy incomes as well.”

“For the time being, tourism is on a roll and we’re likely to see tourism incomes rise faster than dairy incomes. We do expect dairy incomes to recover over the next year or two and in the long run, dairy incomes will be much higher than they are currently.”

New Zealand Institute of Economic Research senior economist Christina Leung said, with the way that the data was trending, there was no doubt dairy would be outstripped by tourism.

She said tourism could take  the number one spot within the year.

Director of the New Zealand Tourism Research Institute, Professor Simon Milne, said a number of factors have contributed to New Zealand tourism’s strength.

These have included excellent marketing, a global lift in tourism and New Zealand’s good tourism offerings.

“We offer a mix of sustainable environmental experiences, we have a welcoming population, we are a safe place to travel to and at least in the moment our dollar is weaker ,” Milne said.

Jetstar’s planned expansion onto regional routes which has resulted in lower airfares from the budget carrier and Air New Zealand were also part of the equation.

“There’s no question that investment in routes that are heavily focused on tourism is driven by increases in numbers. It’s also driven by the kind of tourism we’re trying to promote in New Zealand, one that focuses on free and independent travel,” Milne said.

New Zealand had more than 3 million visitors each year and Milne said the tourism industry needed to tread carefully to sustain growth and avoid killing “the goose that laid the golden egg”.

He said any places that received high numbers of visitors experienced pressure on public resources so efforts were needed to protect the environment from degradation and to properly manage resources.


September 2015

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