New Zealand
New Zealand’s international borders have reopened in stages to visitors following closure for most of 2020-21. In the year ending March 2020, tourism directly contributed NZD 16.3 billion, or 5.5% of GDP. The impacts of the pandemic saw this fall to NZD 8.5 billion, or 2.9% of GDP, in the year ending March 2021. Tourism directly employed 218 580 people in 2020, representing 7.9% of total employment. This fell to 146 295 people (5.2% of total employment) in the year ending March 2021, a 33% reduction in the tourism workforce from pre-pandemic levels.
Strict border closures saw international visitors fall to 996 000 in 2020 and to 207 000 in 2021, remaining 94.7% below 2019 levels. This caused a 91% decline in international tourism expenditure, which fell to NZD 1.5 billion in the year ending March 2021. International visitors accounted for 43% of total tourism expenditure prior to the pandemic. Prior to COVID-19, 39% of international arrivals to New Zealand were from Australia. Some of New Zealand’s largest international visitor markets are the United States, the United Kingdom, and Japan.
Domestic tourism expenditure increased to NZD 24.6 billion in the year ending March 2021, 2.6% above pre-pandemic levels.
The Ministry of Business, Innovation and Employment (MBIE) advises the government on creating productive, sustainable and inclusive growth in the tourism sector. MBIE works closely with other government agencies whose portfolios intersect with the tourism sector. These include the Department of Conservation, Department of Internal Affairs, Ministry of Culture and Heritage, and Ministry of Transport. Tourism New Zealand (TNZ), a public body, markets the country as a visitor destination internationally.
Local and regional authorities provide tourism-related infrastructure and local planning frameworks to help communities grow and manage local tourism challenges. Regional Tourism Organisations (RTOs) have traditionally been responsible for promoting their destinations. In recent years, RTOs have also assumed leadership in bringing together local stakeholders to develop destination management plans to ensure their destinations are well-managed and sustainable.
RTOs are largely funded and governed by local or regional councils, with some RTOs receiving additional funding from other sources, including central government, annual membership fees from local industry and industry partnership funding. The RTOs’ destination management work has been accelerated through COVID-19 funding packages provided by the central government and with the support of their membership organisation, Regional Tourism New Zealand. By the end of 2022, every RTO in New Zealand is expected to have a published destination management plan for their region.
The New Zealand Government Budget directly related to tourism for the 2022/23 financial year is NZD 296 million. This includes NZD 3 million for tourism data. Budget 2022 reflects the shift away from time-bound COVID-19 funding back towards ‘business as usual’ levels as borders reopened. The main areas of the tourism-related budget include:
NZD 112 million allocated to TNZ for the promotion of New Zealand to key markets as a visitor and business destination.
NZD 54 million for the development of a Tourism Innovation Programme.
NZD 32 million for the funding of New Zealand’s tourism infrastructure, including cycle trails.
Additional funding to meet COVID-19 response programme commitments.
A feature of the New Zealand tourism funding landscape is revenue from the International Visitor (Tourism and Conservation) Levy. Revenue is tied to the volume of international visitors. Most visitors are required to pay the levy, with some exceptions. In 2022/23, NZD 5 million was allocated from the International Visitor (Tourism and Conservation) Levy for additional tourism data funding.
Source: OECD, adapted from the Ministry of Business, Innovation and Employment, 2022.
In 2019, the New Zealand-Aotearoa Government Tourism Strategy was released. The Strategy sets out a stewardship role for the government in tourism to ensure tourism enriches New Zealand through more productive, sustainable and inclusive growth. Priority actions for delivering this include co-ordination across the tourism system, developing long-term sustainable funding mechanisms, facilitating destination management and planning, and better data and insight.
In 2020-21, New Zealand provided a range of support to the tourism sector to enable its eventual recovery from the pandemic. In 2020, immediate support came from economy-wide support measures, including NZD 1.8 billion through a Wage Subsidy scheme and NZD 285 million through a Small Business Cash Flow scheme. An NZD 400 million Tourism Recovery Package was also provided, which funded initiatives including a Strategic Tourism Assets Protection programme.
In 2021, an NZD 200 million Tourism Communities: Support, Recovery and Reset Plan invested in new programmes such as psycho-social support and wellbeing services, small business support, tourism infrastructure, the conservation estate, and Māori development. The plan focused on five communities with a high dependence on international tourism in their local economies while advancing a nationwide re-set.
New Zealand has taken the COVID-19 pandemic as an opportunity to accelerate work streams that focus on transforming the tourism industry into a regenerative model. The focus is shifting from survival and recovery to supporting the tourism industry to reflect the new model. The Minister of Tourism has announced four key principles that will guide the recovery and transformation of New Zealand’s tourism sector. These are: i) elevate ‘Brand New Zealand’ so international travellers see New Zealand as a leading aspirational destination, ii) rebuild tourism on a sustainable and regenerative model (see Box 3.10), iii) ensure that tourism’s costs and negative impacts are mitigated or priced into the visitor experience, and iv) establish partnerships between the government and industry.
In 2021, the Minister of Tourism announced reforms to freedom camping laws to improve the sustainability of freedom camping, protect the environment, and ensure local communities support the hosting of freedom campers. Increasing numbers of freedom campers have placed burdens on the natural environment and some communities in New Zealand. A Freedom Camping Bill is currently being considered by the House of Representatives.
In 2022, the Minister of Tourism announced an NZD 54 million Innovation Programme for Tourism Recovery. As New Zealand welcomes international visitors, there is a need to look to the future and innovate. The programme is designed to help stimulate a shift towards a regenerative, low-carbon, productive, and innovative tourism sector. The programme is targeted at transformative initiatives that deliver on climate, environmental sustainability and technology outcomes, improve the sector’s resilience, or promote and protect things of social and cultural value to Māori across the visitor journey. A Tourism Data Co-Governance Group was appointed in 2022. The group is to provide leadership on the collection, dissemination and understanding of tourism data and recommend needs for future investment in tourism data. Representatives from industry and government previously agreed that a co-governed data system would create value for users of tourism data.
Work on the Tourism Industry Transformation Plan (ITP), which has the overarching objective of establishing a regenerative tourism model, is underway (see box below). The ITP is created in a partnership between the government, tourism industry, Māori, unions and workers. The first phase focuses on Better Work, addressing some of the workforce challenges in tourism. The second phase will focus on the environment.
In 2021, the New Zealand Minister of tourism announced that work would begin on a Tourism Industry Transformation Plan (ITP). The ITP has an overarching objective of establishing a regenerative model of tourism, to create a sector that adds more than only economic value and gives back to the community and the environment in which it operates. The ITP is designed and delivered through a partnership of government, Māori, industry, and workers.
The first phase of the Tourism ITP, Better Work, will identify a series of practical actions that can be taken by actors in the tourism system to address workforce challenges. Several systemic challenges exist in the tourism workforce, including negative perceptions of working in the sector; difficulty attracting and retaining talent; reliance on low-paid, temporary and migrant labour; and seasonality.
The second phase of the Tourism ITP will identify practical actions for the tourism industry to adapt to and mitigate climate change and promote positive ecological outcomes. Ensuring the tourism industry has a positive impact on the environment is critical to achieving a regenerative tourism model.