Lincoln researcher urges oil-based caution

28 March 2007

Lincoln researcher urges oil-based caution on NZ tourism growth from distant markets

A growth warning is given to the New Zealand tourism industry in a study by Lincoln University researcher Dr Susanne Becken, soon to be published in an international tourism management journal.

Dr Becken, a Principal Research Officer in the Tourism Group of Lincoln University´s Environment, Society and Design Division, warns that in preparation for the day when world oil production reaches its peak - and forecasters are predicting this could be between 2010 and 2020 - New Zealand should be wary about further tourism growth from distant markets.

"Such growth is likely to more than outweigh any oil saving initiatives at the destination," says Dr Becken.

"The United Kingdom, which is currently considered to be a growth market for New Zealand would be at particular risk under an oil scarcity.

"Similarly Germany might be affected too."

Closer markets such as Australia and Asia are more favourable than long- distance European and North American markets, says the study.

Overall the lowest risk markets for New Zealand with respect to oil requirements are Australia, China, Singapore, Taiwan and South Korea.

In the report, titled Managing Tourism In the Face of Peak Oil, Dr Becken says that traditionally tourism marketing strategies are largely aimed at increasing visitor arrivals and while more recently other aspects such as seasonality and regional spread are also being taken into account the time has now arrived when "it could prove beneficial to incorporate risk factors related to oil"

Dr Beceken says it is surprising that given the certainty that oil resources will one day be depleted and that a transition to non-fossil fuel energy source is inevitable, "there is very little debate about what this means for tourism".

"Current tourism forecasts do not seem to take into account the challenge of oil availability and, as a result, seem overly optimistic. Given the increasing evidence for the imminence of a peak in oil production and the economic effects that this would cause, Dr Becken says it is "timely and prudent" for tourist destinations to consider their current oil requirements and establish indicators for assessing tourism´s oil intensity.

Dr Becken says that tourist destination managers should be concerned about oil for several reasons - o Oil scarcity and lack of alternatives (eg. for aviation) will lead to higher prices for travel and as a result lower demand. o In an extreme scenario for oil depletion oil will only be available for life-supporting industries. Tourism travel (often treated as a luxury/discretionary spending item) will not be a priority in oil allocation. o Oil use is linked with a range of other socio-political concerns such as increased carbon dioxide concentrations in the atmosphere, contributing to climate change and also environmental concerns such as air pollution, and security concerns for countries that depend on imported oil from politically unstable areas.

A transition to less oil-intensive tourism is inevitable, says Dr Becken, and while the timeframe depends on the viewpoint (all models suggest a decline in oil production at the very latest from 2050) she repeats the warning already made by others that it is "not too soon to think about paths to non- carbon energy sources and economies."

For destinations that rely totally on international air travel it might be wise to consider reinvesting into domestic tourism, including the development of fossil-free transport systems.

Dr Becken´s views and warnings are not made lightly or recklessly. She supports them with an analysis of the oil-use intensity of different markets to a destination, using New Zealand as the case study, and applying 10 "indicators" for measuring oil intensity at different scales and with various end-uses in mind.

The 10 indicators are - total oil use by market; oil sue by (domestic) air transport; oil use by (domestic) road transport; ratio of (domestic) air transport oil use to total oil use; oil use per tourist-trip; fuel use per tourist- day; eco-efficiency: tourist expenditure versus (domestic) oil use; OD (origin and destination) travel total oil use by market; OD travel oil use per tourist; ratio of OD travel oil use to overall oil use.

Among the 10 indicators eco-efficiency is particularly important as it allows a comparison of input and output in terms of economic contribution. In other words it compares the dollars spent by a market or tourist with the resources required to provide the service or good, in this case oil.

The highest eco-efficiency of travel in New Zealand is associated with tourists from China, Australia and Singapore in that order. These tourists spend comparatively large amounts of money compared with their oil consumption in New Zealand. The least eco-efficient markets are Canada and Germany.

The data used for Dr Becken´s analysis came from New Zealand´s 2005 International Visitor Survey which is undertaken in the form of an exit survey at New Zealand´s main international airports - Auckland, Wellington and Christchurch. Approximately 5500 visitors are interviewed every year.

Drawing on the data, Dr Becken points out that more than half of the total energy use by tourist transport in New Zealand (in all sectors, road, other and air) is due to travel by visitors from three markets - Australia, the United Kingdom and the United States of America.

The amount of oil consumed for air and road travel are important indicators for the development of energy reduction strategies, she says. Japan, the UK and Australia are the largest oil consumers for air travel.

Overall the lowest risk markets for New Zealand in terms of oil requirements (and climate change policies) are Australia, China, Singapore, Taiwan and South Korea.

A copy of the paper is available at: www.lincoln.ac.nz/trrec

ENDS

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