Domestic tourism takes a knock

Spending in the billion-dollar domestic tourism market has fallen for the second year running as the high exchange rate makes overseas breaks more attractive and fewer New Zealanders holiday at home.

A new Ministry of Tourism report shows that domestic travellers spent $7 billion in the year to March - a drop of 0.4 per cent on the previous year but enough to see spending slashed by more than $762 million since 2004.

The result - based on interviews with 15,000 people - was a significant improvement on the 9 per cent decline the previous year.

But Tourism Industry Association chief executive Fiona Luhrs said there was concern about the domestic tourist market, which had declined during the previous 18 months as cheaper airfares saw Kiwis head overseas.

The domestic industry kept many tourism operators going during the winter, Luhrs said.

"I think as things have got softer over the last 18 months everybody's looked at each other and said, 'Well no one's really responsible for the domestic market on a national basis'," she said. "It's sort of in no man's land."

Increased promotion through public-private sector partnership and initiatives to make booking domestic holidays as easy as overseas packages would help, she said.

Ministry of Tourism research manager Bruce Bassett said the new data suggested a new balance was being struck between the number of Kiwis heading overseas at the expense of domestic travel. But the ministry's report showed the number of overnight domestic trips taken in the year ended March fell 1.95 per cent to 14.4 million and the number of day trips was down 4.9 per cent at 29.7 million.

Data from Statistics New Zealand showed the number of short-term departures for the same period was 1.9 million - up 4.9 per cent.

"We do think that we might be at the tail end of that sort of problem. We're certainly well past the worst, I think."

The key to this was the stabilisation of the New Zealand outbound travel sector, he said.

"Basically there's a clear substitution effect between more New Zealand out-bound and less New Zealand domestic travel and that seems to be stabilising."

The rate of growth of short-term departures had slowed in recent months, with a 2 per cent increase in the year to July and a 1.1 per cent rise in the year to August.

Trevor Hall chief executive of Tourism Holdings - owner of attractions including Kelly Tarlton's and the Waitomo Caves - said flight costs and the high dollar had made travelling across the Tasman a good option.

"I think the other thing you have to factor in is there was a lot of market stimulation for both the domestic travellers and international travellers last winter because of the Lions Tour and that's not in the mix this winter either."

However, the warmer weather and the turnout in the first week of the recent school holidays had been encouraging.

"We're not unhappy with the amount of domestic activity around at the moment but one week doesn't make a 52-week business year," Hall said.

The regions had done a good job promoting domestic tourism but Hall would also like to see the Government work with the regions in some joint ventures.

"Promotion is something we can always do more of and obviously a tourism company would like to see much more regional spend driving people to visit," he said.

"We are competing with the east coast of Australia so the more that we can point out to New Zealanders what they have in their own back yard the better it's going to be for us."