Big spending backpackers key to tourism growth

12th Jun 2001

Those casually dressed foreign backpackers checking their e-mail at a central Auckland travel centre are hiding a lucrative secret.
They may not show it, but the polar fleece-clad visitors have deceptively deep pockets and getting them to open their wallets a little wider is seen as the key to developing the foreign exchange-earning tourism sector. Last month, the industry issued a 180-page blueprint for achieving sustainable growth over the next decade.
Tourism Strategy 2010 suggests that with a smart focus on increasing yields, an expected 85 per cent rise in visitor numbers over the next nine years could be turned into a 270 per cent boost in tourism revenue. The strategy points out that a 1 per cent increase in spending by all visitors generates the same economic result - a $1 billion rise in revenue - as a 12 per cent increase in tourist arrivals.
In other words, rather than the traditional focus on attracting more tourists to New Zealand, the plan is to put just as much effort into getting them to spend more while they are here. Adding value to the Kiwi holiday experience is what travel companies such as Travellers Contact Point are all about. Backpackers are lured into the company`s Queen St centre by its cheap internet rates.
But after saving a few dollars checking their e-mail accounts, visitors often then stay to book several thousand dollars of tours, travel and accommodation. Travellers Contact Point manager Kirsty Morrison says one independent traveller came in asking where he could hire a helicopter to fly him to a friend`s wedding in Northland. Others turned up looking for information on bus fares but left having booked up to $5000 in campervan rentals and adventure activities.
“They`ve travelled such a long way to get here that it`s easy to convince them they should take in a few extra sights,” Miss Morrison says. “Reminding them how low the kiwi dollar is compared with their home currency also helps.”
On average, foreign holidaymakers spend $3000 here. The Japanese are the most lucrative visitors, spending more than $5000 each, while Australians spend the least individually, but travel here more frequently and are our biggest market.
Tourism New Zealand head George Hickton says industry yields can be increased through a focus on lucrative niche markets such as wine and food tourism, and fishing adventures.
Luring visitors off the traditional busy tourism routes so they spend more in the smaller centres will also help increase overall yield.
But getting tourists to spend more could be easier to recommend than to achieve.
Simon Milne, professor of tourism at AUT and a Tourism Research Institute coordinator, sees a lot of work ahead.
“This is a competitive environment. “We`ve got a rapidly fluctuating New Zealand dollar, a lot of overseas competition [and] the travel distribution channel being radically altered, with travel agents being cut out more and more.
“There is a lot of talk in [the strategy] about small and medium enterprises being weak and needing to be strengthened. “But what I don`t see is a lot of attention on how to create alliances between them.”
A 10-member sector group, chaired by Sky City managing director Evan Davies, was given $700,000 of Government and industry money to prepare the strategy and spent months reviewing submissions on where tourism should be headed. While the group made headlines by suggesting that a change to the flag could help NZ`s international identity, it also suggested several more practical changes, including a shakeup of the way the industry is represented and organised.
For a start, the group wants to see a Ministry of Tourism. Tourism NZ, the Government`s overseas tourism marketing body, would take a greater role developing the industry nationally and regionally. And the number of regional tourism organisations would be trimmed.
The Government has committed $4 million over the next year to implementing the group`s recommendations, with further funding promised for future years.
Officials studying the strategy are due to report to Tourism Minister Mark Burton next month.


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