Hotel sector leaders say New Zealand needs to get more ambitious about attracting big events as the country’s tourism sector battles a persistent view that the country is overpriced.
Les Morgan, the chief operating officer for Hind Management, the parent company of Sudima Hotels, says border and visa fees are a deterrent.
‘’Of course, you face very high prices here. I was in China six months ago when one wholesaler said, ‘New Zealand is now viewed as being more expensive than Switzerland’ - and that’s sobering,’’ he says.
‘’You just have to fight harder and a lot of countries haven’t made Chinese citizens subject to any visa. it’s part of the security that we must go through, but it’s the fact that in a competitive situation, potentially New Zealand’s losing ground.’’
Domestic travel, responsible for up to 75% of Sudima bookings, was also hurting, he says, with Auckland suffering more than other centres.
‘’It seems everyone seems to be tightening the belt no matter what sector they’re coming from. It’s made for a tough winter and Auckland is back on last winter and last winter was the worst we’d seen in Auckland for decades.’’
He says Tourism and Hospitality Minister Louise Upston’s visit to China was encouraging.
Says Morgan, ‘’The drip feed of IVL [International Visitor Levy] revenue or funding into tourism is not really moving the dial. And in my opinion, it’s time the Government was bolder.’’
The America’s Cup was not as popular with the public as it once was, but it was an example of the type of event the Government should get behind.
Horwath HTL figures for July show a continued mixed performance across New Zealand’s hotel sector.
Changing international travel patterns, a still-soft domestic market, and region-specific factors influenced an overall 1.1% decline in Revenue per Available Room (RevPAR).
While overall visitor arrivals moved closer to pre-pandemic levels, remaining global uncertainties and local economic headwinds continued to temper the pace of recovery, Horwath HTL says.
It’s the same at Cordis, Auckland where managing director Craig Bonnor says there’s a story of contrasting fortunes - strong growth in the South Island and regional North Island, but stagnation in Auckland and Wellington.
In Auckland, double-digit growth in hotel room supply since 2019 has met softening domestic demand and importantly, international arrivals that are 13% below 2019 levels.
‘’We reap what we sow and chronic under-funding Tātaki Auckland Unlimited has left very little funding for major event bids and destination marketing. Throughout the critical winter months, when some hotels are less than half full, for years to come there is an absence of major events. ‘’
A recent example of the impact of the funding gap is that in May this year, after knocking out 22 cities in the bid for the 2030 Gay Games, Auckland had to pull out of the final-three race, due to a lack of ongoing bid funding.
The Auckland bid had already beaten cities like Adelaide, Melbourne, Seattle and Vancouver as it made the final three. This event draws many thousands of competitors to a 10-day event. This type of funding was also needed for attracting major events like concerts, that all benefit the wider community.
Bonnor was encouraged by Upston’s approach in other areas.
Tourism has seen ‘’great engagement’’ from the minister with some short-term promotion funding of campaigns to boost transtasman tourism as well as an initiative for business events across New Zealand. This came from the previously ‘’impenetrable vault’ that are the IVL funds. More initiatives like this, with a longer planning lead time to improve effectiveness.
Bonnor says there a need to ease regulatory barriers; specifically, the short-term visitor visa, which is expensive and takes a lot longer to process than the market we compete against for international visitors, Australia.
The trial of Australian visa recognition for eligible Chinese visitors, due to commence in November this year, is a good start, he says. This will halve the cost and dramatically reduce the processing time down to around 72 hours. Clients (large agents) in China agreed that this, while helpful, is unlikely to drive the volumes that New Zealand tourism seeks.
‘’Perhaps it is a catalyst for a larger conversation with our transtasman neighbours. Considering the current co-operation and general alignment around security, a single Australasian platform for short-term visitor visa processing would be worth discussing.’’