International visitors spent $6.3 billion in 2004

Last updated: April 2008

Media Statement

27 April 2005

International visitors to New Zealand spent $6.3 billion in the year to December 2004, down 1.3% from the previous year. This decline comes following record expenditure levels reached in 2003.

“New Zealand has benefited from significant growth in recent years, and now we are experiencing a period of consolidation of tourism sector expenditure,” Ministry of Tourism’s Research Manager Bruce Bassett said today.

New Zealand’s top 10 markets accounted for 76% of the total visitor spend. Visitor spend for 2004 was generated from Australia ($1.4 billion), the United Kingdom ($887 million), Japan ($649m), the United States ($611m), China ($409m) and Korea ($325m).

In terms of growth performance, Australia increased by 22%, United Kingdom fell by 4%, United States fell be 3% and Japan increased by 5%. Korea fell by 48%, as did China at 4%.

The Australian performance is particularly noteworthy because of both the rate of increase and the magnitude of the spend – an additional $262 million compared to the previous year.

“In assessing these results, it is useful to consider them in the light of the 11.2% increase in international visitor arrivals over 2004 and there is no doubt that visitor expenditure has lagged behind the growth in arrivals over the past year.

There have been a number of factors influencing performance over 2004, including:

New Zealand’s currency had a significantly higher average value in 2004 than in 2003. While the relationships between exchange rates and tourism expenditure are not always clear, New Zealand has been a substantially more expensive destination to visit in 2004 than it has been for a number of years. The United Kingdom and United States markets in particular appear to have been influenced by this factor.
The decline in the export education sector has had an impact with a decline of 16% in expenditure by travellers coming to New Zealand for the purpose of “education”. This is manifested by the sharp drop in earnings from Korea and China in particular. By contrast “holiday” expenditure increased by 2%.
There have been significant shifts within some of our markets in 2004. In particular, the competitive trans-Tasman market stimulated growth of Australian travellers who have shorter visits and therefore lower spending per trip than other longer stay markets. As such, the strong Australian visitor growth is not reflected in the overall spend performance.

“These factors reflect the dynamic nature of the tourism sector and reinforce anecdotal feedback on the performance of the sector, particularly over the latter part of 2004.”

These results are from the International Visitor Survey (IVS) for the year ended December 2004 released today by the Ministry of Tourism.

For further information please visit the Ministry of Tourism research website - www.tourismresearch.govt.nz.

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