Tourism boom set to continue but worries about shortage of Kiwi workers

Tourism is booming including in Kaikoura which is recovering from the 2016 earthquake. Photo / Supplied

A major study of the tourism industry shows businesses are confident the boom will continue but remain worried about infrastructure gaps and a shortage of Kiwis to work in the sector.

The survey of more than 350 businesses for Tourism Industry Aotearoa finds 62 per cent of businesses expect their results will improve during the next year in a sector that is the country's top foreign exchange earner.

In the year ended March 2017 international arrivals were up 8.9 per cent to more 3.5 million, the fifth successive year of growth. Overall visitor spend is rising at a slower rate, up 1.9 per cent to $35.9 billion. And while domestic spend was up 4 per cent to $21.4b, international spending weakened 0.9 per cent to $14.5b in the period studied by the Wellington Institute of Technology.

In spite of a change in marketing strategy to attract visitors at off-peak times and away from top tourist destinations, there had been no significant progress since 2014 on increasing the visitor spend in the regions or on altering international visitors' seasonal travel patterns.

And visitor experience data shows there are slipping levels of satisfaction although they remain very high. This country met or exceeded expectations among 95 per cent of visitors in 2015 but this had slipped to 93.4 per cent last year.

The report finds that while infrastructure rates highly or air and tourist service infrastructure — 15th and 19th respectively — port and ground infrastructure is well down the World Economic Forum ranking in 50th place.

''Survey responses not only suggest the impact of inadequate infrastructure constrains growth but it also has a negative effect on the visitor experience,'' said the report authored by tourism lecturer Jamie Smiler.

''International visitors have many destination options and they want to move easily through a destination.''

Infrastructure was of strategic importance for New Zealand's global competitiveness and a theme of comments from respondents suggested that more central Government funding should come from GST collected from visitors with budget allocations based on tourism's contribution to the economy and border taxes.

The Auckland Council targeted rate on commercial accommodation providers - which is used to partly fund tourism promotion - was seen as offering very little value to the industry.

Staff shortages were a key area of concern and this could compromise the ability to deliver a ''quality visitor experience'' and 82 per cent of respondents strongly agreed or agreed that labour shortages are becoming a significant issue.

Nearly 231,000 people are employed in tourism businesses, an increase of 9.3 per cent from the previous year and only 38 per cent agreed that they could find skilled staff for their business.

Many survey participants said the reliance on migrant labour was a risk given uncertainty over immigration policies and difficulties in getting visas for workers.

''Survey participants also noted the lack of domestic labour in front-line positions is detracting from the Kiwi experience for visitors.''

I have a real fear that we are taking away a uniquely New Zealand experience for our international guests by employing huge numbers of cheap migrant workers in front-end jobs

Tourism operator

One respondent said: ''I have a real fear that we are taking away a uniquely New Zealand experience for our international guests by employing huge numbers of cheap migrant workers in front-end jobs.''

Tourism Industry Aotearoa chief executive Chris Roberts said his organisation was working to address the challenges created by tourism's growth.

''We have a number of projects underway that bring tourism representatives together with central and local Government to find solutions," he said.

''It's pleasing to see that operators are expecting to build on the current positive business conditions. Even in Kaikoura, where operators suffered major business downturns following the November 2016 earthquake, they are optimistic about their future."

One operator, Encounter Kaikoura, has rebounded after the 2016 earthquake and its worst season to be booming but was having difficulty finding staff.

Business manager Lynette Buurman said the quake had exacerbated the labour shortage but her firm was about four or five people short.

She said the marketing effort around New Zealand was working.

''The response people are seeing in customer numbers through the high season gives us the confidence to think that we can only see more volume,'' she said.

''We are a destination of choice again. It makes us feel quite inspired again looking ahead and we're confident that the next four to five years are going to be strong.''

More airline capacity to New Zealand was helping drive growth, she said.

The report shows the number of international seats had increased from 6.7 million in 2014 to 10 million last year. The number of domestic seats has risen from 13.5 million to 16.2 million in the same period.