IVS commentary

International visitor spending continues upward trend

Spending by international visitors reached $10.6 billion, in the year ended December 2017, a five per cent increase when compared to the year ended December 2016 (although not statistically significant – link to technical glossary). This equates to an overall increase of $477 million over the year, and continues the growth seen in the year ended September 2017 (when it was up four per cent).

[image] International visitors to New Zealand expenditure

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Arrival numbers up while spend per visitor holds steady

Average spend per visitor has changed slightly (although not statistically significant – link to technical glossary) from $3,230 year ended December 2017 to $3,190 year ended December 2017 (down one per cent). This stability in average spend, along with continued increase in arrival numbers (up seven per cent1) has led to the rise in total spend.

[image] International visitors to New Zealand expenditure

Click on the image to view a full size version.

[image] International visitors to New Zealand expenditure

Click on the image to view a full size version.

Stable New Zealand dollar helps to maintain current levels of average spend

The value of the New Zealand dollar has not changed much since the start of the year, after the large increase from late 2015 to early 2017. This also coincides with the average spend of international visitors being relatively unchanged.

The nominal Trade Weighted Index (TWI) measures the value of the New Zealand dollar against the currencies of other countries. The exchange rate of each currency is given a weight based on the amount of trade between New Zealand and the currency zone. The TWI seems to have an inverse relationship with the mean spend per visitor so when the TWI rises (due to a rise in the New Zealand dollar), the mean spend per visitor tends to fall.

This strong correlation with the mean spend and TWI could be based on the fact that many visitors come to New Zealand on a fixed budget. This budget is based on the currency in their home country, so if the value of the New Zealand dollar appreciates (as seen in late 2015 to early 2017), their fixed budget of currency form their home country would be worth less New Zealand dollars than it was before.

[image] International visitors to New Zealand expenditure

Click on the image to view a full size version.

A rise in US spending continues to boost international visitor spend

Australian visitors remain the largest international market for tourism spending in New Zealand, totalling $2.6 billion in the year ended December 2017. The next largest market was Chinese visitors who spent $1.5 billion, followed by US visitors who spent $1.3 billion.

[image] International visitors to New Zealand expenditure

Click on the image to view a full size version.

US visitors spending significantly more

US visitors spent a total $1.3 billion, in the year ended December 2017, compared with $1.1 billion in the year ended December 2016 (up 18 per cent). Increases in US arrival numbers (up 14 per cent1) and average spend (up five per cent although not statistically significant) are driving the large increase in total spend. Over the last year there has been increasing competition in the New Zealand to US air routes, with both American Airlines and United Airlines increasing their capacity for the summer season, and strong demand continuing in Air New Zealand’s direct flights between Auckland and Houston.

US mean spend arrivals

German visitors spending less and staying fewer days

Of our top visitor markets, German visitors typically spend more per visit on average than visitors from the other markets. However average spending of German visitors fell from $6,300 in the year ended December 2016 to $5,100 in the year ended December 2017, a 19 per cent decrease. This is partly due to a decrease in the average length of stay of German visitors from 52 days in 2016 to 47.5 days in 20171.

German mean  spend arrivals

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We've changed the way we present the IVS on our website

We have tried to provide more clarity and transparency around the IVS results including a new summary infographic [PDF 476KB]. Please email TR_SharedMailbox@mbie.govt.nz to provide any feedback.

 

1 - International Travel and Migration, Stats NZ

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