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Bounce in international guest nights some reprieve for slowing tourism sector

Monday 14th October 2019

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The first increase in international guest nights for nine months will give accommodation operators some reprieve, although indicators are still pointing to a slowing sector. 

Statistics New Zealand's accommodation survey showed there were 958,000 guest nights in August, up 0.5 percent from the same month a year earlier, and the first gain since November. Both islands reported more international visitors, with North Island stays up 0.2 percent at 470,000 and South Island rising 0.8 percent at 488,000. Hotels were the biggest beneficiary, with a 1.3 percent lift to 422,000. 

"International guest nights picked up in August, after falling each month since the end of 2018. On the other hand, domestic guest nights have generally been rising for about 18 months," accommodation statistics manager Melissa McKenzie said in a statement. 

"August is typically one of the lower months for overseas visitors, with international guest nights doubling in summer compared with the quieter winter season."

New Zealand has attracted fewer Asian tourists over the course of 2019 - a year that was meant to be the NZ-China Year of Tourism - although rising numbers of Australians and Americans more than offset that the decline. 

While international visitors have continued to come to New Zealand, accommodation operators haven't benefited. Instead, they've relied on domestic tourism to prop up their occupancy. 

Total guest nights were up 3.7 percent at 2.62 million in August from a year earlier, with domestic guest nights up 5.6 percent at 1.66 million. 

Separately, the Bank of New Zealand-BusinessNZ performance of services index showed tourism industry activity on a three-monthly average basis at its weakest level since September 2010.

"The weakness follows slow international visitor arrival growth overall and unevenness across segments by age, reason for travel, and source country," BNZ economist Doug Steel said in a note. 

Steel said the September reading alone looked better but was "by no means strong."

The PSI's overall reading of 54.4 in September was down 0.2 of a point from August, but still indicated activity was growing. 

Stats NZ figures showed the increase in guest nights were spread across the country, except on the West Coast, where the flooding that washed away the Waiho Bridge in March continues to affect the area. 

Jim Little, regional tourism manager at Development West Coast, said the Waiho Bridge is estimated to have caused $50.4 million of lost earnings, and now the closure of Fox Glacier Valley Road was affecting Fox Village. 

"However forward bookings are solid and we are seeing plenty of camper vans and rental cars on the road," Little said. 

The West Coast is the country's smallest regional economy, estimated to be $1.6 billion, or 0.6 percent of national gross domestic product, in 2018. 


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