Tourism deserves an independent Minister

Tourism deserves an independent Minister

“If Oscars were awarded for location, New Zealand would scoop the lot,” says Clive Irving, Senior Consulting Editor of Conde Naste Traveller. Our country enjoys a clean and green image, with magnificent mountain chains and waterways, steaming volcanoes, sweeping coastlines, deeply indented fiords and lush rainforests. It is a haven for those seeking peace, rejuvenation and relaxation as well as a playground for thrill-seekers and adventurers, creating tourism as one of our biggest export industries.

State of Mind
New Zealand is more than a holiday destination; it is a state of mind.
As a person involved in the tourism industry for more than 20 years, managing successful businesses and as a member of the Tourism Industry Association New Zealand, I am distressed over the current state of the sector.

Tourism contributes close to 10% of our Gross Domestic Product (GDP), remaining one of our largest foreign exchange earners despite challenging times in the last 12 months.

The value of Tourism in New Zealand is $23 billion annually, as per the total tourism expenditure figures for the year ended March 2011.

Tourism is a $63 million per day industry, delivering $27 million in foreign exchange to the economy each day of the year. Domestic tourism contributes an additional $36 million in economic activity every day.

Tourism is today the second largest export earner (accounting for $9.7 billion or 16.8% of total export earnings), down from its top position a few years ago. International tourism derives almost double the amount of export income, compared to the meat and meat products sector, which recorded $5.2 billion in 2011 (third place). The Seafood industry derives just over one-tenth ($1.3 billion in 2011) of the export income generated by international tourism.

High tax revenue
Almost one in 10 New Zealanders is employed in the tourism sector, directly and indirectly, placing the number at 179,800 in full-time equivalent jobs.

As per statistics, visitors paid $1.7 billion in Goods and Service Tax (GST) for the year ending March 2011. The domestic travel market accrues an additional $1 billion in GST revenue.

Under the Labour Government, the mid 2000s was a ‘golden period’ for inbound international visitors largely due to the ‘Lord of the Rings’ trilogy and the British and 2005 Irish Lions Rugby tour.

With these events and getting the new market mix right, the industry has the potential to outperform the peak 19.5% of total exports that international tourism as an export sector achieved in 2006 under the Labour Government.

Lost momentum
But a recent ‘Tourism Industry Association and Lincoln University’ report on the ‘State of the Tourism Sector 2012’ was an indictment of the National Government’s failure to maintain the momentum of this multi-billion dollar industry. Over the last 12 months, tourism’s contribution to foreign exchange earnings fell to 16.8% (from 18.1% in the year ended March 2010). If it were not for the Rugby World Cup that brought 133,200 visitors to New Zealand last year, the tourism sector would have been in deeper trouble.

We are concerned that New Zealand has dropped in its status as a desirable destination, partly because of the downturn in the global economy and partly because we are seen as an ‘expensive country.’ We are seeing less number of visitors from traditional markets such as Japan, Europe, North and South Americas. We have not effectively tapped new and emerging markets.

Losing opportunities
School and university groups could be a new niche market. While spending resources and time in reviving the dead markets, the tourism ministry was not smart enough to pre-empt and recognise well in time the multi-billion dollar opportunities presented by new markets in Asia (China and India in particular). A number of operators in New Zealand still perceive China and India as “very, very difficult and demanding markets.” But India and New Zealand share a number of common values. The Australian Government has committed A$30 million to the Chinese visitor-market over the next four years. Australia, South Africa and Canada are far ahead of New Zealand in their strategies and shifting the focus on niche and new markets.
In order to compete globally, we have to make a difference. We need a long-term vision, using not only our environment but also a number of other unique factors including cultural diversity.

The pending release of The Hobbit is an opportunity to build on our tourism base. There are also opportunities to grow the export earnings of this sector with the ‘2015 Cricket World Cup,’ jointly hosted by Australia and New Zealand) and the 2015 Under 20 FIFA World Cup, hosted exclusively by us.

We will not regain our status as the world’s favourite destination, unless we have a Government and a Minister committed to working with the tourism sector. Labour leader David Shearer has promised to appoint a Minister with tourism as a primary focus if the Party is re-elected to form the Government.
- By Sunny Kaushal

Sunny Kaushal is a Member of the Labour Party. He was a candidate at the Pakuranga Constituency in the Election held on November 26, 2011.

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