Shane Kennedy says Kiwi travellers are excited about the strong New Zealand dollar.
Shane Kennedy says Kiwi travellers are excited about the strong New Zealand dollar.
The Kiwi dollar peaked this week at 99.78c, nudging parity with the Australian dollar and coming the closest the currencies have been since the Kiwi dollar was floated in 1985.
The news was received with mixed reactions yesterday with Kiwi travellers happy to get more out of their holiday pocketmoney, while exporters were expected to feel the pain of the shift.
Shane Kennedy, owner of House of Travel Tauranga and Mount Maunganui, said he was already seeing the impact of the closer dollar.
"Kiwis are aware of it, they are excited about it and we're definitely getting a lot of inquiries about Australia."
He said New Zealanders were bargain hunters and would plan their trips around destinations where they would get the most for their money.
"Kiwis are savvy travellers and quite patient too, so they're happy to follow the dollar and go where it is strongest, where they will get the best value.
"Everyone wants a bargain and wants their dollar to go as far as possible."
Institute of Economic Research principal economist Shamubeel Eaqub said the two biggest impacts of the potential parity would be for Kiwis holidaying in Australia and New Zealanders returning from across the ditch.
"New Zealanders going to Australia to visit for a holiday ... things are going to be quite a bit cheaper," he said. "Theoretically it used to be for every A$1 you only got 80 cents, but now you are going to be getting, roughly speaking, 20 per cent more for your money."
Seeka chief executive Michael Franks says only a small portion of kiwifruit exports go to Australia.
Kiwis were already cashing in on the strong dollar, with migration statistics showing 1.2 million Kiwis holidayed in Australia last year, and some flight companies reporting booking boosts of 25 per cent so far this year, with a 40 per cent increase to some states.
The news was not so good for major exporters. Local kiwifruit exporters were staying positive as Australia was only a small market in their export destinations.
Zespri communications manager Oliver Broad said Zespri had little exposure to the Australian dollar, "because of the fact that we export only small volumes there".
"However, foreign exchange movements do affect grower returns and Zespri constantly monitors exchange rate changes."
Zespri had a foreign exchange hedging policy in place which was designed to take the peaks and troughs out of currency fluctuations, mitigating against some of the volatility in the New Zealand dollar and the impact it had on growers.
Seeka chief executive Michael Franks agreed it was not a major worry for the company.
"It's not going to keep us awake at night," he said. Only a small portion of their kiwifruit exports went to Australia. Most avocados went to Australia but that was also not a concern as the market was expected to be particularly strong.
By late trading yesterday, the New Zealand dollar fell to A97.85c, down from A99c.10c just before the RBA's 4.30pm announcement and nearly A2c down from its record high on Monday.
