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Invest in New Zealand Tourism

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Invest in New Zealand Tourism INVEST IN NEW ZEALAND TOURISM Invest in New Zealand Tourism | 1 CONTENTS Foreword 5 Why invest in New Zealand’s tourism sector? 6 Sector stories 18 Regional overviews 36 Get in touch – next steps for investors 68 4 | Invest in New Zealand Tourism FOREWORD Tourism is a leading export earner and driver of economic growth for New Zealand. The industry presents numerous opportunities for the right investors to make a significant impact. As New Zealand’s largest export earner, tourism plays New Zealand Trade and Enterprise (NZTE) is leading a a pivotal role in our economy, contributing $15.9 coordinated government project aimed at accelerating billion or 6.1 percent of New Zealand’s Gross Domestic new private investment into tourism attractions, in Product (GDP) and directly employing 8 percent of partnership with the Ministry of Business, Innovation the New Zealand workforce1. Tourism spending has and Employment (MBIE) and Tourism New Zealand surged in recent years and is forecast to continue (TNZ). We are building a robust pipeline of high-quality growing as we focus on attracting higher-value visitor projects around the country with the intention of segments and making New Zealand a year-round reducing shortages in the sector. visitor destination. This prospectus summarises key information and The warmth of our welcome and uniqueness of our independent forecasts in relation to the New Zealand culture, combined with our stunning and diverse tourism sector. It provides a snapshot of international landscapes, give us the perfect proposition for and domestic data, cut by activity and region, to high-value global visitors. It is these factors that have provide a fact base for tourism investment decisions visitors talking about us long after they’re gone, with in New Zealand. 94 percent of visitors reporting that New Zealand The New Zealand Government is committed to exceeded their expectations. attracting high-quality investment. NZTE, MBIE, New Zealand is a destination that offers a political TNZ and our public and private partners are seeking haven and economic stability, together with a high to enrich New Zealand through sustainable tourism quality of life. The rapid growth in visitor numbers growth. We welcome your interest in being a part has put pressure on some public and private of our growing tourism economy and attracting the infrastructure. The New Zealand Government investment this sector needs. This type of investment recognises the importance of tourism and is helps lift the value of the industry, provides premium supporting the sector by contributing to the visitor experiences and supports regions and development of quality infrastructure to cater for communities to thrive from tourism. increased demand. This commitment is reflected in We look forward to working with investors in two key funds which support the tourism sector and developing exceptional tourism attractions that meet help regions to expand their capacity. the increasing demands of visitors to New Zealand. The Government has allocated $3 billion over three years to the Provincial Growth Fund for New Zealand’s regions. This presents an opportunity to invest in tourism-related projects where they align to the regions' strengths. The Tourism Infrastructure Fund has provided over $100 million for local communities facing pressure from tourism growth. It offers funding to support the development of tourism-related infrastructure such as carparks, freedom camping facilities, wastewater works and transport projects. Hon Kelvin Davis Hon Phil Twyford Minister of Tourism Minister for Economic Development Invest in New Zealand Tourism | 5 WHY INVEST IN NEW ZEALAND’S TOURISM SECTOR? 6 | Invest in New Zealand Tourism DEMAND IS GROWING First-rate demand drivers combined with superb global connectivity have fuelled a boom in international visitation. It is expected that visitor demand will continue to experience strong growth over the next 10 years. VISITOR SPEND OPPORTUNITY As high-paying demand from visitors increases, there is still significant opportunity to increase visitor spend by offering enhanced attractions. DIVERSE TOURISM OFFERING New Zealand’s advantage over other destinations is that it offers visitors a rich and diverse offering within a small geographical area. INFRASTRUCTURE New Zealand’s world-class transport infrastructure and regional diversity provide clear tourism routes and a captive market for tourism investment. OPEN FOR BUSINESS New Zealand is renowned for its environmental diversity and increasingly proactive approach to sustainability, providing a unique opportunity for socially, environmentally, and economically aware investors. New Zealand is a safe place to invest and do business. Invest in New Zealand Tourism | 7 DEMAND IS GROWING First-rate demand drivers combined with superb international connectivity have fuelled a boom in international visitors. International visitor arrivals to New Zealand Australian and Chinese holidaymakers reached a record 3.8 million in 2018, representing are the leading international visitors a 57 percent increase from 2009 and continuing to exceed official forecasts2. Australia and China are New Zealand’s largest international visitor markets, contributing half MBIE predicts this exceptional growth in of all international visitors in 2018. international visitors will continue. MBIE’s most recent forecasts suggest international visitor arrivals Visitor arrival projections to 2025 place China’s will total 5.1 million annually by 2025, representing growth firmly ahead of all other markets. Annual seven-year growth of 4 percent per year and visitor arrivals are expected to increase 55 percent 1.2 million visitors3. from 449,000 in 2018 to 696,000 by 2025. Total annual international spend is forecast to Australia is New Zealand’s largest visitor market reach $15 billion in 2025, up 34 percent from 2018, by spend; however, China will be a close second by equating to a 4.8 percent growth rate per year. 2025. A key factor driving this shift is a strong trend Spend growth is forecast to grow at a slightly higher towards the Free and Independent Traveller (FIT) rate than visitor numbers, suggesting that spend per segment, and away from tours and groups. visitor will increase. In August 2017, FIT visitors accounted for approximately 75 percent of all visitor visas issued 4 International visitor arrivals to New Zealand to Chinese visitors to New Zealand, a significant 6m increase from 40 percent in August 2013. 5m The Chinese FIT segment is highly lucrative, as these visitors typically stay longer and spend more money 4m relative to other visitor types. In 2025 the average 3m Chinese visitor2019 is forecast to spend $342 per day, 2m 68 percent higher than the 2025 average visitor spend of $203. 1m 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Aus chi uk us canada germany india japan south kor sing other Share of international visitor arrivals to New Zealand by market Australia 38% Australia 35% China 12% China 14% United Kingdom 6% United Kingdom 6% United States 9% United States 10% Canada 2% Canada 2% 2019 Germany 3% 2025 Germany 2% India 2% India 2% Japan 2% Japan 2% South Korea 2% South Korea 3% Singapore 2% Singapore 2% Other 22% Other 22% Aus chi uk us canada germany Aus chi uk us canada germany Source: Statistics New Zealand, MBIE visitor arrival forecasts, Fresh Info india japan south kor sing other india japan south kor sing other 8 | Invest in New Zealand Tourism 2025 Aus chi uk us canada germany india japan south kor sing other The holiday visitor segment is Led by the Tourism Industry Association, the growing strongly Domestic Tourism Working Group includes representatives from Regional Tourism Organisations Holiday visitors represent a strong and growing New Zealand, the Automobile Association, New Zealand visitor segment, boosted by the Air New Zealand, Hospitality New Zealand, increasing adoption of a more independent travel Holiday Parks New Zealand, Intercity, the style by Chinese and other international visitors. New Zealand Cycle Trail, i-SITE New Zealand/ Holiday visitors typically spend more money than Tourism New Zealand, the Department of other visitor types. Conservation and the Ministry of Business, Innovation and Employment. Share of international visitor arrivals by purpose of visit Domestic visitation by four sectors Holiday 52% Culture and heritage 24% VFR 28% Natural environment 28% 2019 Business 8% 2018 Adventure tourism 26% Other 12% Wellness 22% Occupancy rates in New Zealand rank Domestic tourism is thriving and with the best in the Asia-Pacific provides a robust visitor base for tourism experiences in New Zealand A surge in international visitors to New Zealand has helped make Auckland one of the strongest- Kiwi tourists are increasingly spending more performing hotel markets in the Asia-Pacific region. in their own country, with annual domestic Occupancy rates in Auckland and Queenstown are tourism expenditure increasing to $63 million per on par with the likes of Sydney and Melbourne, day compared to annual international tourism which are experiencing similar patterns of tourism expenditure2025 at $44 million per day. growth to New Zealand. The increase in domestic spending reflects continued strength in the retail, passenger transport, and hospitality sectors. Domestic tourism has a Annual hotel occupancy in major New Zealand big part to play in regional dispersal and smoothing markets as at December 2018 out seasonality. To this end, New Zealand has a collaborative and 83% 76% 79% 79% 84% industry-wide group that focusses on creating a sense of connection between New Zealand and New Zealanders, leveraging a greater share of Queenstown Christchurch Wellington Rotorua Auckland New Zealanders’ disposable income, and Source: CBRE addressing seasonality. Invest in New Zealand Tourism | 9 100% Pure New Zealand Campaign Visitor attraction data Tourism New Zealand is the Government We have developed, and made available to the organisation responsible for marketing public, quality international and domestic visitor New Zealand to the world as a visitor destination.
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