Consider Ireland, a small island nation of about four million people, with an economy heavily focused on agriculture.
It gets about eight million tourists a year.
New Zealand, which is very similar, gets about 3.5 million.
So what’s our peak tourism number?
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“We’re getting closer to it,” Air New Zealand chief executive Christopher Luxon said.
“As I think about the medium-term, that’s when I start to get a little more concerned about how will the country be handling it.”
Infometrics senior economist Benje Patterson said: “We have reached a point where we need to think about how does the tourism sector sustainably contribute to the New Zealand economy.
“It’s probably not just through growing volume, we can grow volumes but at what cost?”
Auckland Airport chief executive Adrian Littlewood, however, who used the Ireland example, differed.
“No I don’t buy that, nope.
“There are no doubt some things we need to solve but I think they can be solved with proper management.”
Back to Air New Zealand, though: Luxon said the challenge was all about getting more “productivity” into the sector, where he saw room for at least another $9 billion of value.
Basically, we need to attract more premium visitors who spend more and stay longer.
“That’s really what we want, more valuable tourists, not just more tourists per se.”
Luxon said the country also needed to think about what he called itinerary innovation, which had lagged.
“Essentially, people are coming and doing a tour of New Zealand and they’re kind of doing a lot of what they did 10 years ago.
“Now there are new things, like Hobbiton’s been created and has been a huge success, [and] Rotorua Canopy Tours … so there’s been some really good innovations.
“They’re important but we need more of them because if they’re quality experiences we can charge more for them which means we can get greater value out of it.
“That’s what I mean by itinerary innovation, which then leads to higher value pricing, which leads to premium tourists, which creates more value, which creates greater productivity.”
Luxon said the industry was working hard to bring those higher value tourists.
Air New Zealand’s services out of China have changed dramatically because 80 per cent of passengers are coming to spend at least eight days here now, being independent travellers rather than coming in groups.
The airline is also looking to push people out to more of the country, having changed its schedule in October last year so when people land in Auckland they can quickly be flown to places like Napier or Dunedin.
Getting more people flying during the shoulder or off-peak seasons is also important.
Air New Zealand has worked with regional tourism bodies, councils and mayors to help build a unique proposition for each which the airline then spent hundreds of millions of dollars promoting overseas.
Northland is talked about as being the birthplace of a nation with coastal gems, whereas Southland is Bluff oysters and cars.
“There are unique bids to all the subregions of New Zealand, they don’t need to compete with each other, they just need to be very differentiated and very distilled about what they are and what they’re not,” Luxon said.
“That’s a reason for a visitors to go to that region, I must go have a Bluff oyster, and if that’s another half a day in the economy spending money, that’s a good thing.”
Patterson agrees with the approach.
“It’s about pushing people up the value chain and trying to create incentives for people that are wanting to come to maybe come outside of those peak times when there’s not as much pressure put on resources and when there is more capacity.”
But for Littlewood, a campervan trip around the South Island last year gave him a different idea.
Even back then, everybody said places were getting very busy, but the most Littlewood had to queue was at the Skyline Gondola in Queenstown.
“On January 4, which is one of the busiest days of the year, it was a 15-minute queue.”
Littlewood said some attractions, such as the Tongariro Crossing, just needed some management to ensure it remained a fantastic experience.
Furthermore, there are lots of sparsely attended locations which have plenty of opportunity to attract more tourists.
The regional aviation market, particularly after Jetstar introduced four regional routes last year, has great fares and means places such as Nelson and Hawke’s Bay are much more attractive destinations.
New Zealand ranked quite low in the world when it came to visitation per population and visits per square kilometre, Littlewood said, meaning there was plenty of room to grow.
“We just need to recognise we are becoming a popular destination and we do want to ensure that those popular locations are managed properly and that we also try and make the most of all the other fantastic locations around the country.
“That’s the benefit of tourism, it is quite distributive, if you have connectivity, whether it’s road or air, you can get people around this country.”
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