New Zealand announces funding to support tourism industry and help local communities cope with tourist influx

New Zealand’s Prime Minister John Key has announced that NZ Government would invest $20 million over four years to further support tourism across New Zealand, of which $12 million would go towards a regional tourism facilities fund to help local communities struggling with record tourist numbers.

Tourism industry and local government representatives have appreciated the $12 million infrastructure, calling it a good start but they say more money is needed.

PM John Key acknowledged the funding was “definitely not” enough to cover long-term infrastructure requirements, but it was a starting point and would be reviewed later on.

New Zealand government is open to the idea of providing more funding in future and PM said that the Government will consider any proposals from the tourism sector that could deliver a big financial boost.

The announcement comes after tourism operators called for a central fund to help them build facilities and infrastructure to deal with an influx of travellers.

“For some of these communities, you think the likes of Franz Josef or Fox or Stewart Island or wherever it might be, they have a very small rating base, so the capacity for them to deliver the kind of infrastructure that we need off their rating base is often a challenge” New Zealand’s PM said.

Key said the Government would prefer its funding to be matched dollar for dollar by the communities, although it was possible that communities unable to do so could still receive cash.

Nea Zealand’s Tourism Industry think it’s a good start but look for more funding

Tourism Industry Aotearoa had called on the Government to set up a central infrastructure fund of up to $100 million to support local communities dealing with an influx of tourists.

Chris Roberts, the association’s chief executive, said Key’s announcement was “a good start”, but more money would likely be needed.

“If presented with enough sensible investments that provide a long term return for New Zealand, there will be good reasons for government to look at adding to the initial funding.”

Roberts said the tourism industry was dealing with “unprecedented growth levels”, and smaller regions did not have enough money to pay for the tourism infrastructure they needed.

Local Government New Zealand president Lawrence Yule said the funding needed to be seen as the “first tranche” of support.

“$12 million over four years is better than what we had yesterday – I’m pleased because these things can often take time, but actually in a pretty short time the Government responded and we’re grateful for that.” Yule said the initial funding would likely go towards “basic amenities” like toilet blocks.

Local authorities were working with the tourism industry to develop a sustainable funding model for infrastructure.

They would present their work to the Government at the end of the year for consideration “in a more significant way” in next year’s Budget.

New Zealand’s tourism sector has exceeded forecasts by hitting an expected $32.5billion of tourist spending in the year to March, but getting visitors out of hot-spots like Queenstown to visit further afield is proving difficult.

Tourism Industry Association’s (TIA) chief executive Chris Roberts released a report on the industry’s tourism strategy, Tourism 2025, which had a goal of increasing tourism revenue to $41billion in 2025.

Two years into that strategy, revenue had risen from $27billion to $32.5billion, more than the growth rate required to reach the goal. The value of the visitor economy had also grown. Arrivals in the country were up 9.6% last year and visitor spending rose 31%.

In the two years, total international arrivals were up 15.6%, hotel revenue per room was up 23.3%, and guest nights up 10.7%

But Mr Roberts said along with trying to attract tourists in off-peak times, “dispersal” – getting tourists to visit regions outside major tourist hotspots – was an issue.

Improving the spread of tourism across the country would ensure all regions benefited, as well as taking the pressure off popular destinations such as Queenstown, where “the strain is going to come” in summer.

“We could take another million visitors tomorrow, if they are dispersed around the country,” Mr Roberts said.