$50m pledge for cycleways

DAVID HALLETT/The Press

GREAT RIDES: A cyclist on the trail between Christchurch and Little River, which may become part of Prime Minister John Key's national cycleway project.

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The Government will put $50 million into a national cycleway as part of a plan to take tourism upmarket, ditching the focus on backbackers and package tourists.

Prime Minister and Tourism Minister John Key said yesterday that $50m would be spent over three years on his personal project, a national cycleway.

The project has been downgraded from Key's  vision of a semi-paved route from Kaitaia to Bluff and is now a "series of Great Rides'', linking existing cycleways, such as those in Central Otago and Tai Tapu, near Christchurch,  and developing new ones through scenic areas of the country.

Key said the Government would set up an advisory group to help develop proposals for Great Rides, and more details would be announced in coming months.

The decision comes just weeks after Finance Minister Bill English said there would be no funding for the cycleway in this month's Budget, indicating that English was over-ruled by Key, who was determined his project would receive money this year.

English  hinted at this in Parliament, telling MPs that an announcement on the cycleway would "show who was boss''.

Key unveiled the funding during his first major speech as Tourism Minister, in which he laid out his vision for the $10 billion industry.

He said he wanted to combat falling tourist numbers by targeting wealthier visitors from Australia and from emerging  markets such as China.

Tourism earnings make up about 10 per cent of the  economy, but visitor numbers have been falling since hitting a record high of 2.47 million in March last year. The latest figures have numbers down about 5 per cent, equivalent to a hit of about $500m a year to the economy.

The Government is banking on tourism as one of the big export earners to lift the country out of the recession, and Key told the hotel industry's annual conference yesterday that he wanted to make New Zealand a higher-value destination.

"To do this, we need to improve the quality of the products and experiences we offer. When wealthier tourists decide where to spend their holiday, they make a choice that is based less on price and more on quality,'' he said.

Key said China  had 53 million outbound tourists a year, but only 100,000 visited New Zealand.

Eco-tourism was an area ripe for development, and Key said he did not want the country's national parks and reserves locked up from tourism. ''We must acknowledge that our environment is not just there to be protected  it is there to be enjoyed.''

The Government is also targeting Australian tourists, and Key hinted  that an announcement on reclassifying trans-Tasman flights as domestic flights would be made  in August.

A proposal to streamline immigration, border control and passport formalities  between the two countries was fast-tracked when Key met his Australian counterpart, Kevin Rudd,  this year, and Key said yesterday that 't's fair to say things are progressing well''.

Key said he  wanted to target the lucrative cruise-ship market, starting with an upgrade of  facilities in Auckland, Wellington and Lyttelton.

Tourism Industry Association chief executive Tim Cossar said the industry was pleased Key recognised tourism's importance to the economy but disappointed he was not pumping more money into international marketing now.

Cossar said that while the cycleway was important, the industry would have preferred the money to have been spent on increases to Tourism New Zealand's advertising budget.

- © Fairfax NZ News