Kiwi's march against Aussie dollar a worry for tourism

The short jump across the Tasman for skiing in winter is an attractive and cost-effective option for Australians. Photo / Sarah Ivey

The kiwi nearing parity with the Australian dollar is causing concern for New Zealand tourism operators, but nobody's pressing the panic button yet.

During the past 30 years Australians have on average got $1.16 for their A$1, but now it's almost level.

Australia is New Zealand's biggest source of overseas holidaymakers by far with 485,000 Australians crossing the Tasman in the past year of the grand total of 1.25 million visitors which includes those on business or here visiting friends and relatives.

The Aussies in the year to February spent more than $2 billion while they were here, or an average of $1800 each. Holiday arrivals from our second biggest visitor market, China, roared ahead at 22 per cent last year to 215,000 people but while they spend more per person the total spend from Chinese is $1 billion.

So Australia remains the bread and butter of New Zealand's tourism export business, which is second in size to dairy but with hopes of overhauling that industry following a golden summer for visitor spending that contrasts with a lousy one for milk prices.

The Tourism Export Council represents operators here and says members are keeping a wary eye on the continued march of the kiwi against the aussie but there haven't been any distress calls yet. "We're learning to live with it," says council chief executive Lesley Immink.

And she points out that Australian visitors who haven't got the spending power they once had are canny with their cash. They're big users of daily deal sites.

What's also working in New Zealand's favour is the Aussie dollar's performance against the currency of another favoured holiday spot, the United States. When a trip to the States gets prohibitively expensive, for some the short jump across the Tasman - with its highly competitive air fares, skiing in winter and increasingly attractive long weekend breaks - is a good substitute.

But New Zealand also competes against nearby Asian destinations such as Bali for the Aussie dollar.

The Australian outbound market has been growing at an average 5 per cent a year but the increase in travel to New Zealand was only about 1.4 per cent last year. This country is being challenged to hold that share of outbound growth and the high kiwi won't help.