China will become New Zealand’s largest source of tourist income by 2020, overtaking Australia, according to government forecasts.
Spending by Chinese visitors will rise to NZ$2.32 billion ($1.7 billion) in 2020 from NZ$1.28 billion this year, the Ministry of Business, Innovation and Employment predicted in its annual tourism forecasts published in Wellington Monday. Australian tourists will spend NZ$2.27 billion in 2020 from NZ$2.18 billion in 2015.
New air services, promotional campaigns and increasing wealth will boost Chinese arrivals by an estimated 12 percent a year in the period 2015 to 2021, the government forecasts show. Tourism is New Zealand’s second-biggest earner of foreign income after the dairy industry, and contributed more than 7 percent to gross domestic product last year.
Ngai Tahu Tourism, which operates jetboat tours down the Shotover River canyon near Queenstown, has recently added a guided winter walking business that it hopes will attract Chinese visitors.
“We think there’s a lot of potential there particularly with the China market,” the operator’s chief executive officer, Quinton Hall, said in an interview. “China is a strong trend for New Zealand at the moment, and that’s predominantly driven the increases that we’ve seen over this last season.”
The average Chinese visitor will stay 27 days and spend NZ$238 each day by 2020, the government report predicts. By comparison, Australian tourists will stay an average 12 days and spending will fall to NZ$143 a day in 2020 from NZ$159 this year.
When the Australian dollar declines against the New Zealand currency, as it did in early 2015, Australians reduce spending, Chris Roberts, chief executive of Tourism Industry Association New Zealand., said in an interview.
Visitors may not eat as many meals out or partake in tours or other activities if their dollar isn’t going as far, so “it certainly does have an impact,” he said. “We have to work really hard to get our Australian visitors to open their wallets or extend their credit card limits when they are here.”
–With assistance from Matthew Brockett in Wellington.
This article was written by Tracy Withers from Bloomberg and was legally licensed through the NewsCred publisher network.