Tourism loses top foreign earnings crown

Waitomo Caves. Photo / Supplied

Tourism has lost its title as the nation's biggest export earner, falling behind the dairy sector for the first time in seven years.

Statistics New Zealand figures released yesterday show the money earned from international visitors fell by $87 million or 0.9 per cent in the March year to $9.313 billion - the first time it has dropped in the 10 years since monitoring began.

The recession-hit tourism sector has fallen from 18.3 per cent of New Zealand's total exports of goods and services to 16.4 per cent, while dairy has shot up.

In the year to March 2007 dairy was worth $7.332 billion to the country but that increased to $9.975 billion in the year to March 2009.

The last time dairy was worth more than tourism was in the year to March 2002.

Ministry of Tourism research manager Bruce Bassett said spending by international visitors had fallen in the wake of plunging arrivals.

In the year to March arrivals were down 3.9 per cent.

"The last six months were very tough in terms of arrivals, especially the first quarter of this year where there were quite a lot less long-haul arrivals."

Bassett said the drop was significant for New Zealand tourism but in the context of the global economic environment it was a modest decline - 5 or 6 per cent, he said.

Bassett said the decline in tourism's percentage of total exports was caused mainly by the increase from the dairy sector.

But overall spending in the tourism sector had increased because of more Kiwis holidaying at home.

Domestic spending was up 2.6 per cent to $12.4 billion, increasing total spending by 1.1 per cent to $21.7 billion.

Tourism Industry Association chief executive Tim Cossar said the domestic market had been stronger than expected and the relatively small size of the drop in international spending was encouraging news for the sector.

"[It] shows the resilience of the tourism industry in what has been one of its toughest trading environments in decades, with many of our major international markets suffering dramatically from the world economic downturn."

But it remained a challenging time for many in the sector, particularly with the high New Zealand dollar.

"The high New Zealand dollar is probably the biggest short term factor affecting the industry, with the potential to impact negatively on people's decision to travel here, and to restrict spending for those who do come."

However, he hoped Australian visitors would help keep business up.