China lights tourism gloom

The New Zealand tourism sector is set to slow further despite an ongoing boom in the number of visitors from China, as global economic uncertainty and the high kiwi dollar weigh down the industry.

That's according to the latest international visitor survey compiled by the Business, Innovation and Employment Ministry, which showed tourism spending was flat for the year despite a 5 per cent increase in visitor numbers to 2.6 million.

Much of that visitor growth came from China, with visitors spending $522m in the New Zealand, up 27 per cent on a year ago. In fact, China is poised to overtake Britain and become New Zealand's second biggest tourist market after Australia.

However, the Chinese visitor momentum is not fast enough to offset the decline in visitor numbers from Britain, the US and Japan, three traditionally strong economies now feeling the pinch.

Peter Ellis, tourism research and evaluation manager at the super ministry, said the decline in tourism spend was set to get worse, particularly without an event like the Rugby World Cup to drive revenues.

He estimated the sporting event contributed between $200m and $280m to the New Zealand economy last year.

“The current global economic conditions are biting as well as issues such as the high exchange rate.”

The New Zealand dollar has gained around 5 per cent against the greenback and the pound since January, a measure that is forecast to widen as the European crisis worsens.

Ellis estimated it would take “a number of years” for Chinese visitor spending to make up for the shortfall. Key indicators to watch for were recoveries in the Japanese and British economies, although neither was expected to pick up any time soon.

- © Fairfax NZ News