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In the midst of the pandemic, many countries are considering the type of tourists they want to attract once international borders re-open. For New Zealand, it offers a chance to re-invent their tourism industry.

New Zealand has long been a haven for budget-savvy backpackers. Wishing to save a few dollars as they travel across the country, they typically stay in low-cost accommodation and spend less money than regular tourists who visit the country. However, following the appointment of Stuart Nash as New Zealand’s Tourism Minister, this could all be about to change.

Low Spend, High Cost

In a speech given at the Tourism Industry Aotearoa conference in the nation’s capital, Wellington, Nash outlined new plans to target wealthier travellers to New Zealand’s shores. Speaking bluntly, he spoke of the reluctance to move back to the pre-Covid ways of welcoming tourists, and proposed a shift towards sustainability.

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The logic behind the decision stems from the dilemma about who foots the bill for the costs that arise from welcoming international travellers. At present, it’s the New Zealand tax payers and ratepayers who have to pay for the impact caused by tourists to local infrastructure and the environment, and Nash believes that this isn’t fair.

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By targeting wealthier travellers, Nash asserted that New Zealanders wouldn’t have to subsidise international travellers to the extent that they had been doing in the past. His speech was warmly received by industry leaders, who flocked to the sold-out event to hear what Nash had to say.

Tourism in New Zealand – The Numbers

Prior to the pandemic, New Zealand boasted impressive tourism figures that reflected growth. Tourism expenditure in the year ending March 2019 stood at $40.9 billion, an increase of 4% on the previous year. International tourism grew further still, with an increase of 5.2% and a $17.2 billion share of the overall tourism expenditure.

Tourism is valuable to the Kiwi economy, comprising 5.8% of national GDP, and it stands as the country’s leading export industry. As well as this, 8.4% of the nation’s employed citizens work in the tourism industry – a rise of 3.9% from the previous year.

The Impact of the Virus

Like everywhere else, the impact of Covid-19 has had a significant effect on tourism in New Zealand, despite the country’s impressive efforts at containing the virus. Jacinda Ardern, New Zealand’s Prime Minister, has been applauded for her stance in combating the spread of coronavirus, yet the country has been far from immune to its harm.

The pandemic is expected to see New Zealand’s GDP shrink by as much as 5%. The tourism industry is expected to face a loss of $10 billion, whilst unemployment is expected to rise to 8% by the end of the year.

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International tourism isn’t on the cards for New Zealand, with borders not expected to open until next year at the minimum. However, the silver lining for New Zealand is a strong domestic travel scene, which currently accounts for 60% of all tourist-based income. Domestic tourists outspend international tourists in the majority of categories, so a pivot towards domestic tourism and wealthy international tourists could be just the medicine for New Zealand.

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