FILE
More and more Rotorua residents are travelling thanks to increasingly low costs associated with going on holiday, local travel agents say.
The latest consumers price index (CPI) showed a 3.5 per cent decrease in the price of holiday packages from the three months to December 2014 to the same quarter in 2013. Petrol was another major downward contributor, with a 4 per cent decrease in price. Transport-related costs, most household contents and the cost of clothing and footwear also fell, despite a 0.8 per cent increase in CPI overall.
Harvey World Travel Rotorua manager Deborah Kay said holidays had never been so cheap - a fact Rotorua holidaymakers were well aware of.
"Demand is really high, there's more competition so there's better deals and the New Zealand dollar is really strong against the US dollar and the Euro," she said.
"People seem to be increasingly wanting to prioritise family time so instead of spending their money on a new car, they put it into a holiday."
Cruise-based holidays had had the biggest increase in popularity, she said. "The cruise market used to be really narrow. Now everyone - families, couples, singles - wants to go on them.
"The ships are far better than they used to be, there's far more destinations you can go and far more package options ... They're about a quarter of our business now."
Ms Kay expected the industry to continue to boom as new flight paths were continuously being added and new packages made available in response to sustained demand.
Galaxy Travel Rotorua owner Joanna Corbett agreed, pointing to Hawaii's increasing popularity as a holiday destination for Kiwis as an example. "Hawaii has become an affordable destination for the first time in years. It got quite expensive because Air New Zealand was the only one doing regular flights to Hawaii. Then Hawaii Airlines started flying here last year and that really gave Air New Zealand reason to rethink their prices."
Meanwhile, the overall 0.8 CPI increase fell below the Reserve Bank's targeted 1-3 per cent band. According to Statistics New Zealand, flat prices in the previous quarter slowed the inflation rate.
Cigarettes and tobacco prices had the greatest yearly increase - up 11.9 per cent. The prices were affected by a 10 per cent tax increase in January, which brought the average price of a pack of 20 cigarettes to $17.20. A further 10 per cent tax was added at the start of 2015, pushing the average price to about $20.
Rotorua's Special T Discounter manager Chelly Mansell said they'd seen a lot of new customers come in for cigarettes since the tax increase. "We've converted a lot of people to e-cigarettes and vapourisers, they're a bit cheaper and can make it easier for people looking to quit with prices getting so high," she said.
Other notable increases were the cost of newly built houses (up 5.4 per cent), rental properties (2.1 per cent) and electricity (3.6 per cent). Health and education-related costs and the majority of food costs also increased slightly.
AMP Capital Investors senior portfolio manager Warren Potter said the falling oil price was expected to have more of an impact on petrol costs in the first three months of this year.
Bank of New Zealand economists have also tipped New Zealand to report two quarters of deflation - the first six-month period of falling consumer prices since 1998/99. The economists were not especially concerned about the wider ramifications on the economy however, as growth is expected at a faster rate than developed nation peers this year.