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Electronic card swipes capture changes in international tourism

An important shift in international tourism in New Zealand happened in 2012: China became our second-largest source of visitor spending and visitor arrivals (behind Australia).
  • Image, tourist photographing Mount Cook on a boardwalk above native tussock.

    China took second place from the United Kingdom (UK), traditionally our second-largest tourism market. Differences in how and where visitors from China and the UK spend their money have brought changes to our tourism industry.

    The regional tourism indicators – a new measure of tourism in New Zealand based on electronic card transactions – show dramatic changes in electronic card spending by international visitors following the global financial crisis that began in 2007.

    Most telling is the growth in Chinese visitor electronic card spending by visitors from China, which increased 54 percent from 2008 to 2012. Spending by visitors from the UK decreased 47 percent across the same period.

    Visitor arrivals showed a similar trend, with more visitors from China and fewer from the UK.

    The International Visitor Survey, conducted by the Ministry of Business, Innovation and Employment, shows that in 2012 tourists from China spent a total of $651 million in 2012. This was more than any other country except Australia.

    China and UK visitor spending changes differ across regions

    The changes in visitor arrivals and spending affected New Zealand’s regions to differing extents. Figure 1 shows the growth and decline of electronic card spending at a regional level for visitors from China and the UK.

    One example of regional variation is the decline in spending in the Bay of Plenty region (including Rotorua) by visitors from China, and an increase in all other regions. Another is that while UK visitor electronic card spending declined across all regions, the extent of the decline varied.

    Figure 1: Changes in China and United Kingdom visitor spending by region, 2008–12

     Map showing changes in Chinese and United Kingdom visitor spending by region, 2008–12

    On average, Chinese people spend fewer days in New Zealand and visit fewer regions than visitors from other nations. The circles in figure 1 show that the bulk of electronic card spending by visitors from China was concentrated in Auckland, Bay of Plenty, and Otago. UK visitor spending is more evenly distributed after Auckland, with comparatively large contributions in Canterbury, Wellington, and Waikato. 

    China's visitors spend more on retail goods

    Table 1: Distribution of Chinese and UK visitor spending (percentage of total spend) in New Zealand across industries for year ending March 2012

    Industry China UK
    Percent
    Accommodation 21 15
    Education services 12 2
    Food and beverage serving services 16 28
    Transport 6 15
    Other tourism products 5 14
    Retail sales – fuel and other automotive 2 7
    Retail sales – other 38 19

    Source: MBIE analysis of the regional tourism indicators, Tourism Satellite Account, and International Visitor Survey

    Visitors from China also differ in what they spend their money on while in New Zealand. Table 1 shows that while the largest proportion of UK visitor spending is on eating out (and drinking), visitors from China spend more on retail goods (such as souvenirs). The lower proportion of spending on transport and fuel for China's visitors is likely to reflect their tendency to travel as a tour group and to visit fewer regions while here. Finally, a much higher proportion of spending by visitors from China is on education services, which illustrates the importance of China's students to our tourism and education sectors.

    Consequences of different spending patterns

    While the global financial crisis had a major effect on UK visitor arrivals and spending (and other western markets similarly), visitor arrivals from China, and their spending, have continued to grow.

    If the number of visitors from China increases as forecast, the regions and industries where these visitors currently spend less money will miss the full possible benefits of the increase. Thus an important goal for regions is to continue to increase China's visitors' spending as a whole, and to encourage a more even distribution across regions and industries. This is a trend we are already seeing, with the stronger growth in the South Island shown in figure 1.

    Related information

    The regional tourism indicators measure the change in spending by international and domestic travellers in New Zealand by region. The data are based on electronic card transactions.

    The regional tourism indicators webpage has more information.

    Why is the China market so important for NZ? gives more detailed information about our fastest-growing market for international visitors.

    Source: Statistics New Zealand

UK visitor spending is comparatively large in Canterbury, Wellington, and Waikato.
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