NZ ill-equipped for 5 million overseas visitors

Monday, 5 June 2017

Queenstown residents discuss the pros and cons of living in a town which is one of the country's hottest tourist destinations.

As 20,000 Lions supporters descend on New Zealand we investigate, in a series of articles, the opportunities and challenges posed by the continuing tourist boom.

Tourism is the rock star of the New Zealand economy but there is some nervousness about how we will cope with almost five million visitors annually by 2023.

The benefits of tourism are indisputable - it is responsible for 20 per cent of our foreign exchange earnings, and directly or indirectly employs 330,000 people.

Overcrowding has become a problem on the Tongariro Crossing where more than half of the 125,000 walkers each year are overseas visitors.

Spending by international visitors pumps more than $14.5b a year into our economy, $1.15 b of which goes to the Government in GST.

* Mixed reaction to $178m in extra tourism and DOC funding

*** Lobbying begins to win two new Great Walks economic bounty

New Zealand is expecting a 40 per cent increase in overseas vistors in the next five years, but are we ready for them?

* Councils estimate $1.4b bill for urgent tourism infrastructure**

But director of Auckland University of Technology's Tourism Research Institute, professor Simon Milne says tourists have a lot in common with dairy cows in terms of their environmental impact.

'They're defecating, eating, driving – contributing to our global climate change emissions.

'They're growing in number and in the same way that cattle do, they put a strain on our resources.'

There are plenty of examples of that pressure.

Tourists have been compared to dairy cows in terms of their environmental impact.

Last year Tekapo's 4000 ratepayers coughed up $400,000 for two toilet blocks, with an equal contribution from a Government infrastructure fund.

The first new toilet block opened just before Christmas and in three weeks almost 30,000 people used the facilities.

Catering for exploding tourist numbers forced Tekapo to spend $800,000 on two new toilet blocks.

Now the Mackenzie District Council is seeking more Government money to help with $1.2 million worth of tourism-related improvements to parking, roading, freedom camping areas, and rubbish disposal.

Stewart Barclay runs guided tours on the Tongariro Crossing which attracts 120,000 people a year, more than half of them overseas visitors.

By 2023 our 913,000 Chinese visitors are each expected to spend $347 a day on average.

Based on his description, on a nice day in peak season, the 7 kilometre drive from the main road is verging on 100 per cent pure chaos.

Cars are parked for 3km to 4km down the pot-holed dirt road and people walk down the middle 'eating dust' from the passing buses and trucks, and in danger of being hit by passing vehicles.

New Zealand is warned it needs to avoid making the same mistake Palau did.

When Maori wardens are not present to control car parking, things can really get out of hand.

'There's fights, there's cars getting dented, there's people yelling at each other for not parking in the right place, there's people parking on bends so buses can't get past. It's a complete circus,' Barclay says.

He is hoping the Crossing benefits from the Government's budget promise to spend $178m over four years on tourism infrastructure and helping the Department of Conservation manage visitor numbers.

Milne agrees with industry and local government leaders who say it is not enough when you consider about $40m was simply redirected from existing tourism funding.

He points out Tourism New Zealand's annual budget is $117m, plus the the Government is spending $53m on the New Zealand pavilion to promote trade at the World Expo 2020 in Dubai.

'There's so much more money being spent on marketing and promoting New Zealand. We need a commensurate increase [in infrastructure spending] and a big focus on managing tourism now, it's not just about growing numbers.'

Tourism New Zealand chief executive Simon England-Hall says the priority is to go for 'value over volume', or quality over quantity, targeting visitors who stay longer and spend more, come in the off season and get off the beaten track.

Milne says that's all very laudable, except recent figures suggest yield is dropping.

The international visitors survey for the year to the end of March showed a 10 per cent decline in spending, with a 22 per cent drop by the Chinese, our second largest market.

However, the Ministry of Business Innovation and Employment (MBIE) tourism forecast for 2017 to 2023 predicts visitor spending will continue grow faster than visitor numbers, with the Chinese overtaking Australians as our biggest spenders.

But MBIE also cautioned that there was 'significant geo-political risk' around the China market.

'The uncertainty of this market adds some risk to both China's and the national forecast numbers, particularly due to the relative importance of the China market to New Zealand.'

Milne warns New Zealand needs to avoid making the same mistake Palau did.

The tiny Micronesian country became so popular with Chinese visitors that they crowded out its traditional dive markets, before numbers dropped off again, Milne says.

'Within a very short space of time their entire industry was changed to meet the needs of the Chinese market, they really did put all their eggs in one basket and that's come back to haunt them.

'We need to keep a diverse visitor base.'

England-Hall says that the plan and TNZ is aiming for a balanced portfolio with growth from Germany, Japan, the United Kingdom, the United States, as well as China.

He says there are also promising increases in from India, Indonesia and Brazil.

But the focus on China is undeniable and by 2023 Chinese visitor numbers to New Zealand are forecast to hit 913,000 a year.

That's equivalent to the combined populations of Canterbury, Otago and Southland, and more than double the number of Chinese who visited last year.

Old hands in the tourism industry who witnessed the boom and bust of the Japanese market are wary of any one culture becoming too dominant because of a potential backlash from tour wholesalers and visitors.

Skyline Enterprises ended up cutting back next year's planned Chinese New Year celebration buffet at the Queenstown gondola after industry 'push back', according to sales manager Allyra McGrath, and it will now run for one week instead of two.

'People were concerned about their visitors if they were from western markets.'

Southern Discoveries runs cruises on Lake Wakatipu and Milford Sound.

Chief executive Tim Hunter says some operators heavily target certain markets, but his company tried to achieve a good balance of nationalities on its tours.

'We have to be careful as a country that we don't have China become so dominant that it makes it less comfortable or enjoyable for other visitors.'

An earlier version of this story quoted figures based on the international visitor survey which excludes some spending categories and the GST component included domestic spend.