The New Zealand tourism industry’s growth trajectory for visitor numbers and spend have been lowered in this year’s official annual forecast by the Ministry of Business, Innovation and Employment.
The ministry’s New Zealand Tourism Forecasts for 2019 – 2025 put visitor arrival growth at 4% per annum to hit 5.1m visitors in 2025.
This is a downgrade on last year’s forecast of 4.6% annual growth, which put NZ on track to hit 5.1m visitor in 2024, although it is still a significant jump on current visitor numbers which were 3.9m last year.
More moderate growth in spend is also forecast. This time last year MBIE said visitor spend would reach nearly $15bn by 2024. However, 12 months on it is now forecasting total international spend is expected to reach $15bn a year later – in 2025.
International spend was $11.2bn in 2018, so the forecast is for a 34% increase on this total at a pace of 4.3% a year.
With spend growth forecast to grow at a slightly higher level than the growth of visitor numbers, suggests that spend per visitor will increase, according to MBIE.
The ministry also added that the key factors contributing to the overall growth forecast include strong growth in the US in the short-term, and growth in Asian markets, especially China in the longer-term.
Australia is New Zealand’s largest visitor market, providing 1.5 million visitors in 2018, and is expected to remain so over the period of the forecasts. We expect this market to have an average growth of 2.5 per cent a year to 2025.
Short term growth will be driven by a range of factors, especially available seat capacity, and rising fuel costs affecting ticket prices and demand.
Australia is New Zealand’s largest visitor market, providing more than 1.5m visitors in 2018. The forecasts show that this market will continue to be healthy, and looks set to grow by 19% by 2025.
Australians currently spend $2.6bn annually, with expectations that this will reach $2.9bn in 2025. Last year the forecast was for spend to reach $3bn by 2024.
Growth in the Chinese market has also been downgraded. MBIE said today that China visitor numbers are expected to grow 55% in the forecast period, increasing from 449,000 in 2018 to reach 696,000 by 2025.
Last year the prediction was for 800,000 Chinese visitors spending $3.1bn by 2024, which would have seen China overtake Australia as NZ’s largest market by spend.
Today’s forecast from MBIE said that Australia – currently NZ’s largest market by spend – will keep this title, although Chinese spend will reduce the gap by 2025.
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