Domestic tourism received around 20% of the $10bn earmarked for overseas travel, according to a survey. Image: TT
Around 20% of the annual spending that Kiwis would have put towards an overseas trips has gone to domestic tourism since borders shut in March 2020.
The survey by former Bank of New Zealand chief economist Tony Alexander showed that of the $10bn spent each year on overseas travel, around $2bn likely went to domestic tourism operators in any given 12 month period during the pandemic.
The number one use for unspent overseas travel funds was home renovations, maintenance and improvements, which people would otherwise not have done, at 26%.
Domestic travel was the second largest category at 20% and the third largest was savings at 18%, although Alexander said that many respondents indicated they were keeping the funds in their bank accounts for offshore travel when borders re-opened.
“A number in fact have noted intentions to stay longer overseas than previously planned,” he said. Others said they would increase the frequency of their overseas trips in future.
Source: Tony Alexander
Other categories included buying a new car or motorbike at 12%, or debt reduction at 11%. Less than 10% of unspent overseas travel funds went on new furniture, shares and other investments such as managed funds or cryptocurrency, residential property, or helping children buy a home.
Eating out received 3.1% of diverted overseas travel spend.
Other leisure related categories included spending on sports goods such as gym equipment and bicycles at 4%, buying a boat at 1.7%, and buying a caravan or motorhome at 1.4%.
Alexander said that if all the categories related to investment and savings were put together, the total would come to just over 47% suggesting considerable restraint on the part of consumers.
The independent economic commentator’s special survey had 1,586 responses from regions around New Zealand.
Read Tony Alexander’s latest survey here.
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