Government earmarks extra $20M for tourism over 4 years including funds for smaller centres, Key says

Friday 13th May 2016

The government is to invest an extra $20 million over four years to support tourism, with $12 million heading to a new fund to help communities with small infrastructure projects as tourism numbers are forecast to climb to 4.5 million by 2022.

The new funding is in addition to the more than $130 million a year the government currently spends in the tourism sector.

Local government bodies will need to apply to the new Regional Mid-Sized Tourism Facilities Fund to access the $12 million and Prime Minister John Key said they’d need in many cases to match dollar for dollar any funding they receive.

“If there’s someone with a very small rating base that doesn’t have the money, we’d probably pick up the bill but we do want to leverage it if we can,” Key said.

The need to upgrade infrastructure in areas affected by the big upturn in international visitors has been identified as a key priority by the industry.

Key said one of the aims of the fund will be to help local communities manage freedom campaign issues such as human waste being left on the side of the road, but he added the funding would go on more than just new toilets. It was also likely to be spent on things like new signage and more parking facilities, he said.

A working group, including sector representatives, will help set up the application process and funding criteria for the grants.

When asked whether $12 million is sufficient, particularly given his earlier statements that international visitors contribute over $900 million in goods and services tax a year, Key said it was probably not enough long term. “It’s a good starting point. Over time there is the potential to do more,” he said.

Tourism New Zealand will get $8 million of the extra $20 million the government is putting up to target key growth markets such as India and the US eastern seaboard.

“With strong economic growth prospects, India’s potential as a source of visitors is high. And the highest number of visitors from India peak in May – one of our shoulder seasons,” Key said.

Tourism NZ chief executive Kevin Bowler said additional marketing activity will begin immediately in the US to capitalise on newly announced air services which are expected to result in a 30 percent increase in seats between the US and NZ. It is moving to spend all of its annual $80 million marketing budget on encouraging high-value tourists in the shoulder season, given capacity constraints at peak times in the tourism hotspots such as Queenstown.

Key also announced additional investments in three new tourism projects – with $2.5 million for the development of new facilities at the New Zealand Maori Arts & Crafts Institute in Rotorua, over $1.2 million to Timber Trail Adventures for the development of a new 80-bed lodge on the Timber Trail cycleway, and half a million dollars for the development of a new bungy launch system at Queenstown Bungy’s Nevis site.

The government has now invested $14.6 million in 22 projects with applicants contributing $44.3 million.

As well as the direct government investment, a steering group of government and tourism sector people has been established to try to accelerate investment in new hotels.

One of the big constraint issues identified at this week’s Trenz tourism conference in Rotorua has been a lack of accommodation with Rotorua mayor Steve Chadwick saying the city needed help attracting investment in a new five-star hotel.

The Prime Minister said he’s also due to make an announcement this weekend relating to a new cycle trail in the South Island.

The Tourism Industry Association announced a re-branding this morning to Tourism Industry Aotearoa and launched a new website to better reflect its role as a voice for the industry rather than as a member association.

BusinessDesk.co.nz

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