International visitors on the way back
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The Tourism Export Council of New Zealand (TECNZ) is thrilled that international visitors from Australia are able to return to New Zealand from 11.59pm on 12 April 2022 and visitors from other countries like the US, Canada, UK, Europe, Japan, Singapore, Taiwan, South Korea (visa waived countries) can return from 11.59pm on 1 May. It’s a relief that we can finally start to reconnect and share our world-class offering and manaakitanga with the world again.
There will be an enormous sigh of relief around the tourism industry and particularly for those businesses that pre-COVID had a high orientation of international visitors. It is heartening that the Prime Minister has acknowledged how important international tourism is to New Zealand’s economy (and identity) and also how difficult the last two years has been for business owners.
With Australian visitors being short-haul travellers we anticipate there will be a quick uptake for the Visiting Friends & Relatives (VFR) market and good for Australian ski/snowboard visitors and businesses that service the ski market. We then think bookings will flatten for a few months until October 2022.
Despite the encouraging news businesses can now plan with more certainty, there is still a long way to go for traditional (long-haul) international tourism visitors to return to NZ. The start of the long-haul visitor (USA, Canada, UK, Europe, SE Asia, China) season is six months away (1 October 2022). Even with the date of 12 April, things don’t change overnight. It takes time. International tourism will rebuild slowly. Early long-haul visitors that are likely to return first will be Visiting Friends & Relatives (VFR), high net worth visitors and working holiday visa holders. Mainstream holiday/leisure visitors won’t start to come back till Q4 of 2022. There’s a lot of global competition and many visitors that have been waiting for New Zealand to be available may have already booked a ticket to another destination.
TECNZ forecasts the return of visitor numbers will be a gradual process, a slow burn. In a year’s time, we anticipate total number of annual arrivals by YE May 2023 will be approximately 56.2% of pre-COVID arrivals, by YE May 2024 an increase to 70.4% annual arrivals and by YE May 2025 we anticipate about 83.4% of pre COVID annual arrival numbers will have returned. By YE May 2026 we believe New Zealand will be back to pre-COVID visitor arrivals of 3.9million.
International tourism businesses have been the most impacted of all sectors across society. Having no access to your main customer base for two years, pivoting to domestic but having a handbrake with lockdowns in 2020, then Delta in 2021 and now Omicron in 2022, has crushed many iconic tourism businesses large and small.
The immense stress and anxiety business owners have been under cannot be understated. The border closure and the pandemic has taken its toll, financially, socially and emotionally.
A major concern TECNZ has is the survivability factor for international tourism businesses to get to the starting gate in October 2022. Because of the lag time, businesses still need targeted financial support, they are hanging on by a thread. They’ve exhausted all balance sheet reserves and life savings, got second mortgages, borrowed from family and friends and sold assets to stay alive.
Most international businesses are not eligible for the recent Covid Support Payment (CSP) because they can’t demonstrate 40% loss in 2022 against 2021, when in 2021 they were only trading at zero or only 20%. It will take time for cash-flow to grow. We hope Minister Nash and Cabinet will revisit any decisions on targeted support shortly. It is needed to ensure the quality world-class visitor offering, infrastructure and service is still around for when visitors start to return.
If airlines and our offshore travel partners can start to sell NZ for the upcoming 2022-2023 season, we get a good number of Australian visitors through the winter and spring period, and businesses can get targeted financial support, the industry may finally be able to face the future with a small degree of confidence.
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Media contact:
Chief Executive, Lynda Keene, phone: 027 66 44 836
About TECNZ
The Tourism Export Council of New Zealand (TECNZ) is a trade association that represents the interests of the inbound tourism industry since 1971 (50 years). Our member are the international experts who built the annual $17.5bn earnings for NZ over five decades. Our membership includes inbound tour operators (who physically bring in visitors) and attraction, activity, accommodation, transport suppliers, regional tourism organisations and tourism services providers (Allied Members). Pre-COVID TECNZ represented 76 Inbound Tour Operators and 241 international tourism entities (1655 international businesses across New Zealand.)