Two sides to travel industry fortunes

The two sides of the conference and incentive travel market are showing different stories as companies worldwide rein in their visible spending.

Statistics New Zealand travel statistics for November showed visitor arrivals from Australia had boomed, up 9 per cent compared with the same month in 2008, but those coming for conferences had more than halved because of two large conferences that boosted numbers last November.

Companies were shying away from offering cheap travel as an incentive to make a purchase, or as a reward for sales and other business performance.

SkyCity conference centre manager Peter Zielke said that a financial conference and librarian conference last year had distorted the figures and in reality business was picking up.

Although conference delegates were spending less per head, the value of bookings in the next six months was much higher than the first half of 2009.

"I think we are through the tough times," he said.

Conventions and Incentives New Zealand chief executive Alan Trotter said aside from the skew from the large events, the statistics highlighted a global trend that was hurting incentive travel.

The pressure was on financial institutions in particular to stick to their "corporate social responsibility" strategy and not be seen to be splashing out in hard times.

"Even if they have the wherewithal to do these things, the context in which they are seen to be having these [treats] is just unacceptable, so they are really pulling back," Mr Trotter said.

Convention business was benefiting from cheap pricing on trans-Tasman airfares and reports from operators around New Zealand were that things were not dropping away as much as they feared they might.

Australians made up 60 per cent of New Zealand's conference business, he said.

Taupo Convention Bureau manager Di Christie said the dip in incentives travel was pronounced in industries such as insurance and banking, which had received the bulk of the bad press about the recession.

But other industries were still spending, such as agricultural and manufacturing companies, as they saw positive news starting to come out of the economic situation and wanted to reward staff and customers. Recent trips to convention expos in Canberra and Sydney had garnered a positive response for future bookings, but Ms Christie said the bulk of interest was for 2011, rather than next year.

Australian tourism overall was New Zealand's "banker market", Tourism New Zealand acting chief executive Tim Hunter said, pointing to the heavy reliance on trans-Tasman travel to boost overall numbers.

"The economic situation remains fragile in key markets, including the United States and Britain, and we can expect to see this reflected in visitor numbers in the short term," he said.

"The general feeling is that arrivals will be subdued for the first part of the peak season, but we expect to see an improving trend in some long-haul markets in the first quarter of 2010."

Visitor numbers for November were up marginally from the same month last year and Mr Hunter said that in the context of the global downturn, that was encouraging.

All of New Zealand's major tourism markets except Australia declined in November, while emerging markets such as India and Germany still improved.

Tourism New Zealand's priorities for 2010 would be on recovery of long-haul markets where arrivals were still showing declines, he said.

- © Fairfax NZ News