COVID-19 Knocks Spending By Overseas Visitors And Students

Spending by overseas visitors and students within New Zealand fell by half in the June 2020 quarter, down to $1.8 billion compared with the same period a year ago, Stats NZ said today.

Travel services spending has been New Zealand’s biggest services export in recent years, but it plunged as the COVID-19 pandemic hit. Travel services includes things like visitor spending on hotels, food, and travel within the country and course fees and rent paid by students.

“The border has been closed to new international visitors since March due to COVID-19 but spending by visitors did not stop because there were still tens of thousands of people already here,” international statistics senior manager Peter Dolan said.

Just before the lockdown in mid-March it was estimated there were 240,000–260,000 visitors in New Zealand, dropping to between 90,000 and 120,000 in August.

“While travel follows a seasonal pattern, this is the lowest June quarter we’ve seen for travel exports since 2002, now at a similar level to fruit exports,” Mr Dolan said.

Overall, services exports (including travel services) fell 41 percent in the June 2020 quarter compared with the June 2019 quarter.

The border closure also had an impact on transportation service exports (down 58 percent from the June 2019 quarter) as airlines carried very few international passengers to New Zealand in the June quarter.

While travel service exports measure spending by visitors and students while in New Zealand, transportation services relate to international movements of passengers and freight, as well as services associated with transportation.

Historically, transportation service exports have been New Zealand’s second largest service export earner after travel services. It was ranked fifth for service exports in the June 2020 quarter.

There were also falls in crude oil and fuel imports (down 60 percent compared to the June 2019 quarter) as far fewer people travelled by road and air in the June 2020 quarter.

"With such low demand for petrol due to border closures and alert level 4 lockdown, we have seen both the price, value and volume of petroleum imports plunge," Mr Dolan said.

See Export prices hit new high.

Logs dent goods exports as dairy holds up

Goods exports fell 2.4 percent compared to the June 2019 quarter to $15.8 billion in the June 2020 quarter. This was driven by large falls in exports of logs (down $361 million), seafood (down $136 million), and mechanical machinery (down $126 million). The falls were partly offset by a $434 million rise in exports of milk powder, butter, and cheese.

“While travel and transport services have plummeted due to COVID-19 measures, dairy products have continued to hold up New Zealand exports,” Mr Dolan said.

Dairy and meat were the top exports in the June 2020 quarter, followed by fruit and travel service exports.

Rise in digital imports as physical imports fall

Overall, New Zealand’s imports were also down 21 percent in the June 2020 quarter, compared with the June 2019 quarter. Service imports were down 33 percent to $3.9 billion, driven by large falls in imports of travel (down 83 percent) and transportation services (down 49 percent).

Countering these falls, computer services and personal and cultural services both saw increases compared with the June 2019 quarter, up $131 million and $61 million, respectively.

"With people at home due to lockdown for a large part of the June 2020 quarter, we saw an increase in offshore purchases of digital services such as gaming and streaming services," Mr Dolan said.

Goods imports were also down compared to the June 2019 quarter with an overall fall of 18 percent to $12 billion. Imports of petroleum and vehicles lead the fall, each down by around $1 billion.

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