Tourism has 'capacity to grow'

Adrian Littlewood said New Zealand still has plenty of capacity to grow tourism.

Auckland International Airport's chief executive said New Zealand still has plenty of capacity to grow tourism from its record levels achieved last year.

Visitor arrivals to New Zealand rose 10 per cent to a record 3.13 million last year and tourism has become the country's number one export earner, overtaking dairy which is in the doldrums.

The sector has an aspirational goal of hitting $41 billion in total revenue by 2025, up from the $29.8 billion achieved in 2015.

Adrian Littlewood said while the goal is "quite a significant step up", it is achievable providing the industry works cohesively on growing the infrastructure to support that sort of rise in volume and quality of international visitor who will stay longer and spend more.

"We need to get it right."

Key opportunities identified in the 2025 tourism strategy are high-value Chinese, international students, business events, cruise visits, emerging markets, and promoting Christchurch as a gateway and destination.

Auckland Airport's financial fortunes are closely aligned with that of the overall tourism industry and it spends about $10 million to $15 million annually supporting tourism marketing for the country while also lifting capital expenditure to deal with anticipated growth at the airport, the country's national gateway.

Littlewood is critical the industry was too slow to respond to fast growth out of China and initially spent money in the wrong areas. In order to reach its target, New Zealand has to spread more visitors throughout the year rather than just in the peak summer months to ensure higher quality visitors enjoy the experience, he said.

Auckland Airport's own aspiration is to become a southern Asia-Pacific hub and Littlewood said it has taken a further step on that path with a stronger than expected period of expansion in air services. Six new airlines have commenced or announced services to Auckland in the past 12 months.

Achieving that desired hub status relies on a partnership with another international airline carrying a large population through Auckland on to South America or another destination, Littlewood said.

A simple comparison against peer group countries suggested New Zealand still had capacity to grow, though it would require ongoing and close coordination between government and industry, he said. New Zealand is ranked number 67 in the world by visitation per capita and 107th by visitation per square kilometre.

In one example of where change is needed, Littlewood said there is no nationwide group view on hotel development. Providing detailed information on visitor forecasts to hotel developers would give them "a real handle before they put their money at risk", he said.

- BusinessDesk