Questions raised about cost of tourism

Questions raised about cost of tourism

More discussion is needed about who should fund extra infrastructure to cope with an influx of tourists, says Lincoln University tourism lecturer Michael Shone.

“A tourism boom is a good thing for the economy, but growth in the sector will inevitably affect the level of infrastructure and services needed in destination areas.

“How the impacts of tourism growth are managed, as well as who should bear the cost, are ongoing questions. Central and local Government have some tough choices to make in this area in terms of allocating resources and public funds.”

Dr Shone says the benefits of tourism to society are often less visible than those of other sectors and take longer to filter through, so it can be harder to show an obvious public return on investment.

“One of the difficulties we face as a country is that much of what we provide tourists is free of charge, but not free of cost. How can we provide tourists with the level and quality of infrastructure and services they need, and then convince New Zealand taxpayers and ratepayers to fund it?

“Responsibilities for this area inevitably fall to central and local Government, and the rationale for this is clear. A lot of the things we have to offer tourists, such as scenic landscapes, Great Kiwi Road Trips, conservation areas, as well as the cities and towns in which we live, are owned by us all. The Government has a clearly-defined role in protecting these, as well as managing their use on our behalf.

“Clearly the public sector also has a role to play in terms of funding tourism infrastructure, but we have to look at ways of softening that cost to taxpayers and ratepayers.”

Dr Shone says public-private partnership funding models could be an option, as there are clearly identifiable private sector benefits from tourism-related infrastructure projects.

He points out that the SkyCity-Auckland Convention Centre, while generating considerable public debate, is an example of how cost-sharing between the public and private sectors can ease the burden for taxpayers.

“Another idea that has generated some discussion is to shift some of the costs back to the tourists themselves, perhaps by utilising the GST they pay on products bought within New Zealand and not claimed back.

“The amount is in the order of $2.5 billion per year of tourist-generated GST payments.”

Dr Shone says a clear justification of tourism’s benefits to destination communities is also required.

“The sector needs to find ways of demonstrating to taxpayers and ratepayers that their money is being well-spent, and this is particularly difficult in regional areas, where the challenges associated with tourism growth are felt more acutely.”

He says that regions such as the Far North and the West Coast of the South Island are attracting significantly more tourists than ever, but fewer ratepayers in these areas mean they are paying a larger chunk of the cost.

He also stresses that decision-making in this area should be based on a clearer understanding of local destination capacities and market growth trends.

“This would allow us to predict more accurately and respond more effectively to potential tourism ‘hot spots’ before they reached crisis point.

“If, for example, we anticipate Chinese visitor arrivals to increase from the 378,000 we presently have to one million in the next few years, then we need to think very carefully about where our areas of greatest pressure associated with this growth are likely to be located in the future.”

ENDS

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