Why Key's national bike track could be paved with gold

Fewer than two of every 100 visitors to New Zealand might use the Prime Minister's proposed national cycleway - but the ones that do are likely to be among tourism's bigger spenders.

Tourism Ministry figures show fewer than 2 per cent of visitors take part in cycling, but they stay more than twice as long as the average tourist and spend 1.6 times as much.

The proposed $50 million cycleway could attract international tourists but the benefits to local communities are unpredictable, one report suggests.

The cycleway was among ideas to emerge from the Government's Jobs Summit three weeks ago and has been backed strongly by John Key, who is also the Tourism Minister.

It is hoped the 3000km cycleway will create jobs for up to 4000 people.

Ministry of Tourism figures for the year to last September show 45,000 of the 2,469,064 international visitors took part in a cycling sport.

The cycling tourists spent $199 million on their trips - excluding international airfares - an average of $4386 each. The average spending of all international tourists is $2692.

Cycling tourists on average stayed in New Zealand for 49.2 nights, more than twice the average length of stay of 20.9 nights.

Britons make up the biggest number of cyclists at 19 per cent, followed by Australians at 17 per cent and Americans at 9 per cent.

An economic study done last year on the Otago Central Rail Trail - New Zealand's longest and most successful cycling trail - found only about 30 per cent of its visitors were international tourists.

International visitors are counted as a trade gain to New Zealand because they bring money into the country.

Domestic tourists are considered to be spending money they would have spent in New Zealand anyway.

The 150km Otago trail attracts between 10,000 and 12,000 people every year at a conservative estimate. Up to 80,000 people are thought to use some part of it on a regular basis - many to walk their dogs.

Otago Central Rail Trail Charitable Trust chairwoman Daphne Hull says the trust has spent about $1.3 million on facilities such as toilets and information signs on the track since it opened in 2000.

The Department of Conservation has also spent a significant amount.

She says the route of the proposed national cycleway needs to be considered carefully to try to take it through as many small communities as possible and bring local businesses an economic benefit.

The study shows nearly half the businesses surveyed along the rail trail got 20 per cent of their revenue from tourists associated with it.

Daphne Hull says it has had an effect on new businesses opening up in places such as Ranfurly, where a section sold for just one British pound in 2001. Now a motel has been built in the middle of the town to cater for people using the trail.

Despite the rail trail's popularity, Ms Hull is not certain a national cycleway would boost tourism.

"It depends on where they put it and how well they plan it."

She believes a route following State Highway One would be unlikely to prove popular.

"People enjoy little shops and bed-and-breakfasts - that's what small communities can provide."

The authors of the economic report also give a warning: "The Rail Trail has become a significant part of the local economy but its contribution is uneven, largely unpredictable and subject to economic forces ..."