Tourism industry rides high on growth hopes

By SIMON HENDERY

Most tourism operators expect to boost profits this year and half plan to take on more staff.

The Tourism Industry Association's tourism outlook survey polled 93 chief executives and found 68 per cent expected an improvement in their company's profit for the year to June 30.

Over the same period, 50 per cent expected to employ more staff.

Seventy-five per cent expected revenue to increase, while 19 per cent expected it to fall.

The association's chief executive, Glenys Coughlan, said the results mirrored the finding of the last survey, released in May, which also showed the industry was upbeat about the future.

"Operators are also bullish on the continued growth potential of all international markets, with optimism strongest in relation to the United Kingdom, North American and Australian markets," she said.

"The Asian bounce-back continues to be reflected in operators' expectations."

However, the gap between expected profit and revenue growth signalled the industry's nervousness about external factors, such as higher fuel and labour costs and the lack of major events over the next few months, she said.

"Industry-specific concerns include insufficient hotel capacity in some key tourism areas, and over-supply in others, seasonal visitor arrival patterns and fluctuations in the exchange rate and domestic economy."

The survey found major events over the past 18 months, including Apec, the America's Cup, Millennium celebrations and the Sydney Olympics, had proved a mixed bag for the industry.

Of those chief executives who had thought the America's Cup would have a positive impact on their business, 80 per cent had had their expectations met or exceeded.

An equal number were satisfied with Apec, but almost two-thirds of those who thought the Millennium would have a favourable impact were left disappointed, as were half of those who had counted on a boost from the Olympics.

Ms Coughlan said that despite the disappointments, major events, including the Olympics, provided marketing opportunities from which the tourism industry would benefit in the long term.

"Indications from Australia are that the Olympics will provide more business, particularly from the UK, Europe and the United States," she said.

"New Zealand can be expected to see some of these people combining New Zealand with their Australian holiday."

British tourist numbers are picked to show the biggest jump this year, with 95 per cent of those surveyed expecting an increase.

Half expect the rise to be more than 5 per cent.

The majority also expect overseas visitor arrivals from all other countries to increase.

Three-quarters expect to see growth in the domestic tourist market.