Tourism cash 'best spent overseas'

Plenty of New Zealanders make the trek to Queenstown for skiing, but foreign business is prized

Taxpayers' money is best spent promoting New Zealand abroad and not at home, says Tourism Minister Damien O'Connor.

The clear stance comes despite some in the tourism industry looking for a greater Government role in the declining domestic traveller market.

"I think the regional tourism organisations do a good job in marketing their regional product to other New Zealanders," O'Connor said. "I don't think there's a place for Government expenditure in the domestic market."

Domestic travellers spent $7 billion in the year to March - 0.4 per cent down on last year and a drop of more than $762 million since 2004.

According to Statistics New Zealand, during the same period short-term departures were up 4.9 per cent.

The domestic market had caused some concern in the last couple of years "but the general agreement across the industry is that if we were to put money into marketing it was probably better focused into Australia", the minister said.

Each dollar spent in Australia generated $25 in return, he added.

"Growing the cake for everyone to share as we're doing with the Australian campaign is a better long-term prospect than spending the money encouraging New Zealanders to travel internally."

However, the AA's general manager tourism services, Peter Blackwell, said greater Government involvement was critical.

The AA has launched a $2 million tourism campaign called 101 Must-Do's for Kiwis aimed at getting people to holiday at home.

"We are looking at it as a non-profit association, as something where we think we can lend a hand and especially when nobody else will step up and do it," Blackwell said.

A huge gap needed to be filled and although regional tourism organisations had a part to play many didn't have enough funds to "climb on board and actually get the message out", he said.

Tourism Auckland chief executive Graeme Osborne said the council-funded organisation focused most of its $2.1 million budget on an international sector identified as being most valuable.

However, he didn't see central government as the answer to boosting domestic traveller numbers.

"I don't think we can keep on looking to the Government but I think that certainly our industry partners here in Auckland are an opportunity."

However, there was no point spending money for the sake of spending it.

"So I think we get our major events in line and then we come behind it with sufficient resource to market these."

National Bank chief economist Cameron Bagrie said a squeeze on household income would hit the domestic traveller sector.

"I just think New Zealanders are going to tighten the belt over the coming two years," Bagrie said.

"You've got a Reserve Bank that wants to slow down the economy, now you slow the economy by taking money out of people's wallets."

The sector would also be hit by pressure on company earnings affecting the business traveller market, he added.

Overall the tourism sector would be a big star in 2007 but it would probably be the externally dominated elements that would be the key beneficiaries, he said

The key to being relatively cheaper over 2007 was a fall in the value of the currency.