Slowing China arrivals reinforce need for new tourism market

Article – BusinessDesk

Slowing China arrivals reinforce need for new tourism markets

By Gavin Evans

April 26 (BusinessDesk) – Reduced visitor numbers from China are a reminder of the need for New Zealand to keep looking for new potential markets for inbound tourism, Auckland International Airport says.

The slowdown, after several years of “break-neck” expansion, reflects the economic cycles that all visitor source countries go through, says Scott Tasker, the airport’s aeronautical commercial general manager.

Slower growth in the domestic economy had prompted some Chinese consumers to put off overseas holidays or spend less on them. Some Chinese airlines are also consolidating services after adding seat capacity for several years and pricing flights to fill them, he said.

Visitor numbers from China in the past six months are down almost 6 percent – about 14,000 – according to Stats NZ data. But that has been more than offset by increased arrivals from Australia – our biggest tourist market – and from the US, the third-largest arrivals market behind China.

Together with the UK – where arrivals have also slowed amid Brexit uncertainty – this country’s four-largest tourist markets account for almost two-thirds of all international visitors here.

“There’s a lot of eggs in those baskets,” Tasker told BusinessDesk.

While those markets need to be maintained and sustained, “we need to make sure that we are aware of those future growth markets as well,” he says.

The rapid growth of China’s middle class, coupled with the direct air services made possible by more efficient jet liners, saw its visitor count overtake those from the UK and the US in 2012.

In the four years through 2018, annual arrivals growth from China averaged 15 percent.

Tasker says we shouldn’t be surprised by the sharp slowdown late last year. The big drop in February – down 26 percent nationwide – reflects both the earlier timing of the Chinese New Year holiday this year and the “stellar” New Year season in 2018. Even with the latest decline, Chinese arrivals this year will still be higher than in 2017, he says.

Arrivals from other major markets – Japan, Germany and Korea – have also softened during the past year.

The decline in UK arrivals – down 6 percent nationwide in the year through February – “doesn’t look so bad” given the Brexit uncertainty and surge in travel for the mid-2017 Lions’ tour that is still captured in the year-earlier data, Tasker said.

Conversely, arrivals from India climbed almost 11 percent to 68,566 in the year through February; while those from Hong Kong and Indonesia also posted high single-digit increases.

Arrivals from the Philippines were 19 percent higher at 28,662 in the year through February and have almost doubled since 2016, according to Stats NZ data.

Auckland airport handles about 70 percent of the country’s visitor arrivals and has been a big beneficiary of increased direct services to and from Asia and North America in recent years. Its international passenger count climbed almost 4 percent in the year through February.

Tasker says seven airlines offer up to 41 flights a week flying six routes direct from Auckland to mainland China.

The new direct service Air New Zealand started to Taipei in November helped increase arrivals from Taiwan by 27 percent in the year through February. Two-way travel in the four months since the service started was 67 percent higher than in the same period the year before.

Arrivals from the US have also benefited from the strong economy there and the direct Chicago service Air New Zealand also started in November. That built on the Houston service that started in 2015 and complements other direct services being offered by United Airlines and American Airlines.

Almost 355,000 US visitors arrived in New Zealand in the year through February, 5 percent more than a year earlier and about 128,000 more than in 2015, according to Stats NZ.

Tasker says it is direct services that are really delivering on years of work by Tourism NZ promoting this country as a tourist destination.

“Otherwise it’s a long way to travel and it’s expensive to get here.”

But he said the country remains dependent on carriers maintaining that direct capacity against competition from other potential routes and markets.

The numbers travelling here are also almost a “rounding error” relative to the growing outbound tourist populations of some countries. That makes them susceptible to even small swings in the economies and travel preferences in those markets.

That said, Tasker says the trends underlying Chinese arrivals here remain strong.

Passport numbers in China rose from 38 million, almost 3 percent of the population in 2012, to 129 million in 2016. Its outbound visitors are projected to reach 203 million by 2020, from about 130 million in 2017.

And Chinese visitors appear increasingly confident to travel here independently, hiring cars and seeing more of the country. The percentage travelling on group visas dropped to 33 percent in the year through January, down from 55 percent in 2015.

“Our view is that China still remains a significant opportunity for growth of inbound visitors to New Zealand,” Tasker said.

“The China visitor story still looks very, very positive.”

(BusinessDesk)

Content Sourced from scoop.co.nz
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