Exchange rate lures more Australians

Visitors from Australia are up but arrivals from Britain and the US have fallen. Photo / APN

A favourable exchange rate is helping to entice Australian holidaymakers across the Tasman, says an industry expert.

But Simon Wallace, policy and research manager for the Tourism Industry Association New Zealand, says an over-reliance on the Aussie tourist market should be avoided by Kiwi businesses.

Statistics NZ figures released yesterday show the number of Australian visitors to this country increased by 4 per cent to just over one million in the year to November 2010, compared with the previous 12-month period.

Wallace said that since 2006, visitors from across the Tasman had gone from making up 37 per cent of the total to almost half.

The rise of low-cost carriers such as Jetstar and Pacific Blue, as well as the fact that Australia had suffered less of an economic downturn than other countries, was also fuelling the increase in numbers, he said.

Wallace said Kiwi tourism operators, however, needed to be careful not to place too much reliance on the Australian market.

"I don't think we can just sit back and keep relying on [Australian visitor numbers] going up like they have been. We need to keep working on some of our emerging markets like China and India, which are showing growth," Wallace said.

The latest Statistics NZ figures show visitor numbers from China were up 15 per cent in the year to November, and those from India increased by 17 per cent.

Arrivals from South Korea were up 28 per cent, while those from Japan climbed by 12 per cent and the number of Taiwanese travellers was 30 per cent higher than in the previous year.

Wallace said the number of independent Chinese travellers was increasing, which was a positive development for the local tourist industry.

Tourists from China have traditionally visited on group bus tours.

He said independent travellers were usually higher value as they tended to spend more time in the country.

China Southern Airlines' announcement this month that it would begin flights from Guangzhou to Auckland early next year would be a boon for New Zealand's tourism industry, he added.

"That southern part of China around Guangzhou is quite a rich industrial area and opening up that route offers some really good opportunities to target those Chinese who like to travel more independently."

While Asian and Australian visitor numbers were up, the figures indicated arrivals from Britain were down 13 per cent in November 2010 to 21,200, compared with the same month in the previous year. And the number of Irish visitors was down by 22 per cent in the 12 months to November.

"The UK [market] has been declining for the last four years and I don't think that's just about the exchange rate on its own - its about the state of the economy [in Britain]," said Wallace, adding that it would be two to three years before the number of British tourists visiting New Zealand began to grow again.

Visitors from the United States were down 8 per cent on the previous period.

A total of 2.5 million visitors arrived in the year to November - a 3 per cent increase on the previous 12 months.

Almost half of those arrived in New Zealand for a holiday, while 781,200 came to visit friends and family and a further 249,200 were in this country on business.

KIWI COULD GO LOWER STILL AGAINST AUSSIE

The New Zealand dollar is reaching lows against the aussie not seen for a decade and could be pushed lower still if GDP data released tomorrow proves lacklustre, says an analyst.

BNZ currency strategist Mike Jones said the kiwi hit a 10-year low of A74.40c on Monday afternoon.

It then gained ground, trading at A74.83c last night.

Jones said Australia's interest rates - which were tracking higher than those in New Zealand - were helping to keep this country's currency low against the Australian dollar.

The BNZ reckoned flat, 0 per cent GDP growth figures would be released tomorrow, he said.

The lower the GDP figures were, Jones said, the more downward pressure would be placed on the kiwi's cross rate against the aussie.

He said the kiwi could push as low as A73c late this week.

It was plausible a negative GDP number could be unveiled tomorrow, Jones added, which would indicate a contracting economy.

"The key point is that the recovery in New Zealand is still proceeding at an extraordinarily slow pace," he said.

Export New Zealand executive director Catherine Beard said Australia's importance as a destination for NZ products meant the current exchange rate helped local exporters.

It made New Zealand goods cheaper for Australians to buy, and increased returns for Kiwi firms exporting to Australia.

"I think smart exporters will be taking advantage of [the cross rate] and enjoying that differential but they will also be planning for it to get back to higher levels," Beard said. '

The New Zealand dollar was trading at US74.57c last night.