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Kiwis have a long history of welcoming guests and sharing what we love about our country. So it was perhaps no surprise that recent comments from New Zealand’s new tourism minister, Stuart Nash, have sparked such a passionate debate among locals and the industry.
At a summit hosted by the Aotearoa tourism industry, Nash said the future of New Zealand’s tourism industry is high-net-worth visitors who spend the most while here. To show his intent in this area, Nash also said that he would like to ban non-autonomous van rentals to tourists to stop the “Freedom Campers”, a specific subset of backpackers who sleep in their vehicle wherever fantasy takes them, as opposed to paying a few dollars for a campsite with amenities like bathrooms.
Many of these vans do not have onboard toilets, creating a human waste problem in pristine places, a problem that has irritated locals and that Nash has noted: rivers, ”Nash told RNZ on Wednesday.
The ministerial directive that the industry should focus on “value over volume” should come as no surprise, as it has been declared as one of the goals of the government’s tourism strategy for 2019.
Who doesn’t want to extract more value? But this is where we run into our first problem: What is “value” and what kind of tourists offer the best return?
The wealthy traveler in the luxurious hostel spends more money per day than the backpacker on their instant noodles, but stays for a much shorter time, and where does the money they spend go?
A lot of luxury hostels in New Zealand are foreign owned, so the money doesn’t provide much value to New Zealand. The backpacker will frequent smaller stores, in more dispersed locations, for a much longer period of time.
Backpackers will also contribute to the economy by making their way across the country, picking fruit, working on farms, or even performing professional duties. In an average year before Covid, 70,000 visitors to New Zealand would visit on 12-24 month working holiday visas (plus another 75,000 with student visas) that allow half the trip to be spent working. It is this group that makes up the majority of backpackers. Staying long-term means that many have parents or friends who come to visit them while they are here and spend more money.
Both groups will provide free marketing services through their social media and face-to-face when they return home. People in both groups fall in love with the country (or one of the people) and end up making the change permanently, contributing to economic output and paying taxes for decades to come.
The backpackers are also likely to return as future big spenders, having spent years yearning to recapture their incredible experiences as youngsters in New Zealand.
The above considerations are purely financial. When looking at the long-term sustainability of a company, or an entire industry, the “three Ps” framework is often used: people, planet, profit. What is the environmental impact of the rich visitor with his helicopter rides versus the 20-year-old in his van? There is very little data on this and more work is needed.
The same goes for impacts on communities. Intuitively, I’d say the backpacker is providing more community involvement in the pub, volunteering, participating in sports, but that might not be true. We simply do not have the data on the cultural exchanges enabled by different tourist segments.
It is necessary to work to determine exactly which tourism segments represent the greatest value and on what time scale we measure that value. This must be balanced with New Zealand’s welcoming attitude towards all people – it is not an elitist destination.
The rise of cheap international travel over the past two decades has brought a large increase in the number of tourists to New Zealand with nearly four million international visitors in 2019 contributing 20.4% of all New Zealand export earnings. Zealand and employed up to 14% of the workforce.
It has also brought significant problems, as identified in the environment commissioner’s report. Pristine Popular, in danger? which details the environmental impact that tourism is having on New Zealand’s most iconic setting.
It remains to be seen how quickly the global tourism industry will recover after Covid-19. Will travelers be too nervous to get back on the air or will pent-up demand have more influence on passenger numbers?
Will we see new low-budget airlines as a result of so many idle planes potentially being sold cheaply, or will the surviving airlines increase costs to pay off the debt accumulated during the pandemic?
Whatever happens next, can New Zealand’s tourism industry afford to be picky after a year of business closings and layoffs and at a time when global competition will be fierce?
Anthony Gardiner is a marketing strategist who recently completed an MBA with the University of Otago focused on recovering sustainable tourism from Covid-19.
