The Future of Tourism in New Zealand

Rural scene with mountains behind, Kaikoura, Gisborne, New Zealand
George Karbus Photography / Getty Images

New Zealand is among a handful of countries that—so far—have managed to keep the coronavirus infections and deaths relatively low. As of May 3, 20 deaths had occurred, with 1,136 confirmed infections. These low numbers haven't been possible without some very strict measures, though. Arrivals from China were paused early February, and on March 19, when there were only 28 confirmed cases of the coronavirus in New Zealand, the borders were closed to everyone but citizens and residents (and their families with valid visas). Around that time, the reports from countries suffering most from the virus, such as Italy and Spain, were extremely grim, giving New Zealanders a sense of what could happen here if strict and swift actions weren’t taken.

The following week, on March 25, New Zealand entered Level 4 lockdown. This required everyone but essential workers to stay home, except when going out to buy groceries, visit the doctor, or exercise close to home. Unlike in the U.S., restaurants and cafes weren't allowed to open, even for delivery or collection, and online shopping was banned (except for essential items). This was initially for a period of four weeks, but ended up being extended to five. Even though the daily numbers of cases continued to increase for a couple of weeks, they dramatically tailed off, fully flattening the curve throughout the country.

As of early May, New Zealand is under Level 3 lockdown, a slight easing of restrictions that means many more businesses have reopened. People are still expected to stay at home when they're not at work or going about essential activities, though.

New Zealanders are now generally feeling cautiously optimistic that the country has escaped the worst effects of the coronavirus. But dampening the optimism is the stark realization of what the (very necessary) closing of the borders has done to an economy that's heavily reliant on overseas tourism. Prime Minister Jacinda Ardern hasn’t specified how long the borders will remain closed to foreign visitors, but she has suggested it could be a very long time. They may not open again in 2020, or beyond. There's unlikely to be a return to "business as usual" in the New Zealand tourism sector.

The Effect on New Zealand Tourism

Until March 2020, tourism was New Zealand's largest export industry, making up more than 20 percent of all exports, bringing in about NZ$112 million ($67 million) per day. That ground to a halt on March 19. According to a survey conducted by the Tourism Industry of Aotearoa (TIA), up to half of all tourism-related jobs in New Zealand may be lost in the short term.

The country's national air carrier, Air New Zealand (52 percent of which is owned by the government) is facing enormous losses. They received a bailout from the government, but that hasn't been enough to save thousands of jobs. Up to a third of their 12,500-strong workforce could be become unemployed, and a late-March statement from the airline suggested that in the future we may see Air New Zealand become a domestic-only airline.

It's not all terrible, no-good, horrible news, though. Tracee Neilson of the Nelson Regional Development Agency noted that a large majority of the luxury sector of regional tourism operators had experienced postponements rather than cancelations. North Americans in particular, she stated, seem to be optimistic about the future of travel to New Zealand. The Nelson Tasman region was perceived to be safe, as much of the rest of the country is, too; New Zealand needs to make sure that reality matches expectations. 

It's clear that New Zealand won't be opening up to international visitors again for quite a while—what "a while" means, though, depends on whether vaccinations or treatments for can be developed, and whether a second wave of infection takes place around the world later in 2020. So, for the remainder of 2020 at least, the focus within the country is on promoting domestic travel.

snow-capped mountains, lake and houses in Queenstown
Apexphotos / Getty Images 

The Likely Rise of Domestic Travel

New Zealanders are big travelers, both within their own country and abroad. If they can't travel abroad for the foreseeable future, many will travel more around their own country, both for their own enjoyment and to support the struggling tourist sector. Domestic tourists were already the backbone of the tourism industry here, spending more than international tourists overall.

Many tourism operators are going to have to think creatively about attracting local visitors once domestic travel opens up again; under Level 3 restrictions, unnecessary travel around New Zealand is still prohibited. Local travelers don't spend their money on the same kinds of things as foreign travelers, and are more inclined to enjoy free activities, such as visiting beaches or national parks. Many attractions and hotels in places that tend to be very popular with foreign visitors (such as hotels in Franz Josef, or Hobbiton in Matamata) have been mothballed, on the understanding that they won't be getting many visitors anytime soon, even when domestic tourism opens up.

Parts of New Zealand have been more badly affected by the sudden closures than others, however. Not all parts of the country are used to being busy year-round, and Neilson pointed out that in the popular Abel Tasman National Park, kayaking companies were starting to wind down for the low season anyway. On the other hand, the small town of Queenstown has taken an enormous hit. The Queenstown Lakes area was used to being busy year-round, and the economy here relied on tourism more than any other part of the country. In fact, over-tourism was a concern for the small town, which saw around 30 visitors per year for each resident. While it's an extremely scenic place, Queenstown is unlikely to be top of the list for many domestic travelers—it's a popular winter ski destination, but domestic ski tourists are unlikely to replace the sheer volume of international visitors. Also, Queenstown is difficult to reach from much of New Zealand, requiring a pricy domestic flight or a long overland trip through mountainous country. It's easier to imagine that more New Zealanders will head to places that are accessible from main centers when they can, such as Northland or the Coromandel Peninsula from Auckland, the Wairarapa wine country or Nelson-Tasman-Marlborough region from Wellington, or the Banks Peninsula from Christchurch.

Similarly, tourism providers across the country will need to reimagine the kinds of experiences and activities they offer domestic visitors. Road tripping has been a popular way for foreign tourists to see the country; New Zealand's public transport system isn’t extensive, and many of its most attractive natural sites are in rural areas. While domestic travelers don't dislike road tripping, time limitations and different spending priorities mean that the kinds of road trips marketed to foreigners won't have the same traction for domestic travelers. Juergen Gnoth of the Marketing Department at the University of Otago, writing for Newsroom, suggests that instead of packaging and promoting tourist destinations as “coach-stop attractions,” many places should pivot towards “hub-and-spoke” offers and activity circuits. Tourists would return to the same place they started at the end of each day rather than continually being on the road. Gnoth also suggests that developing health and wellbeing activities such as cycle and pedestrian trails will appeal to Kiwi travelers, and such infrastructure will continue to be useful to residents and international travelers in the future.

Winding road leading to Mt Cook along lake Pukaki in New Zealand
@ Didier Marti / Getty Images

A Trans-Tasman Bubble?

As New Zealand entered Level 4 lockdown in late March, Prime Minister Jacinda Ardern advised New Zealanders to stick to a tight "bubble" of people for the duration, an exclusive and tight group of people who would mix with nobody else, as a way of stopping the spread of the coronavirus. Since then, the "bubble" is how Kiwis have been referring to their very limited social circles during lockdown. Recently, it's been suggested that New Zealand and Australia may form a kind of Trans-Tasman bubble.

Australia is in a similar position to New Zealand in how effectively they've contained the coronavirus; the country has similarly strict entry controls, and they closed their borders to non-residents shortly after New Zealand did. Ardern and her Australian counterpart, Scott Morrison, have repeatedly given non-committal answers about this potential Trans-Tasman bubble but have suggested that it would make sense in the mid-term. Even if other parts of the world continue to see high infection rates, if New Zealand and Australia both have the situation well contained, it may be logical for the two countries to open up to each other again.

Australians have traditionally been the single largest group of visitors to New Zealand, with almost half of foreign visitors coming from there. Opening up New Zealand’s borders to Australians could provide some relief to the New Zealand tourism industry, but it should be remembered that Australia had a challenging few months before the coronavirus hit, with destructive bushfires in late 2019 and early 2020. Before the pandemic, Australia was gearing up for its own domestic travel push, encouraging Aussies to holiday at home in 2020. The Australian tourism market is also hurting, so it would be understandable if Aussies didn’t immediately flock to New Zealand when the borders open.

fern and palm trees and cold spring waters
 Edwin Leung / 500px / Getty Images

Build Back Better

With every crisis comes opportunities, and this enormous crisis for the New Zealand tourism industry could lead to some positive changes.

Despite some serious environmental problems such as rivers polluted by agriculture, loss of native species and habitats, and high per-capita carbon emissions, New Zealand has long promoted itself as a clean, green destination. But in late 2019, Parliamentary Commissioner for the Environment Simon Upton published a hard-hitting report, that in short, highlighted the dire effects that huge increases in visitor numbers were having on New Zealand's environment and resources. For perspective, annual tourist arrivals have increased from one million in the early 1990s to four million in 2019.

Many commentators are now realizing that New Zealand’s post-pandemic tourism doesn’t need to be a return to business-as-usual, and this may be a very good thing in lots of ways. If business-as-usual was damaging the very asset that visitors came to experience, why would we want to go back there?

“We now have a once-in-a-lifetime opportunity to take a fresh look at our industry, to shape tourism for the benefit of Aotearoa and our people," Chris Roberts, Chief Executive of the TIA, stated in a press release about the matter. "In a post-COVID-19 world, every part of the emerging tourism industry will need to consider inclusion, economic value, community values, cultural connection, and climate change perspectives in order to thrive. Sustainability must be at the heart of everything we do.”

Those who visit New Zealand in the future, whether that’s six months or two years from now, might actually see an improved New Zealand. “Our vision of becoming the world’s most sustainable tourism industry pre-dated COVID-19 but is now more relevant than ever,” stated Roberts. The future may be brighter than we can see right now.