Market Trends

Official New Zealand Government forecasts are for Australian visitor arrivals to reach 1.64 million in 2018 (source: NZIER Tourism forecasts  2012-18). One of the quoted drivers from NZIER is the opportunity to leverage growing middle class incomes in Australia.

There has been a significant shift in where Australian holiday arrivals are entering New Zealand. Christchurch airport's Australia holiday arrivals have almost been halved by growth in Queenstown and Auckland arrivals in the past four years.

As the proportion of first time holiday visitors to New Zealand declines, the amount of time Australian holiday visitors are staying here declines. The average length of stay of Australian holiday visitors has declined from two weeks in 2000 to 10.9 days in 2012.

Australian holiday visitors flying directly into Queenstown tend to stay for shorter periods of time than the norm (9.1 days). A separate analysis shows these tourists typically spend 20% more per person than the average Australian holiday tourist.

New South Wales, Queensland and Victoria account for the largest numbers of Australia arrivals into New Zealand but Western Australia has shown the highest growth with increased airline capacity from Perth to Auckland.

Summer has the highest peak for Australian holiday visitors, but marketing by Tourism New Zealand and other industry players has helped make New Zealand a popular year-round destination. Winter has seen sustained growth in the popularity and accessibility of ski tourism for Australian visitors.

New Zealand competes closely with the US and Indonesia in the Australian market, as well as with domestic Australian destinations such as Queensland and Western Australia, but New Zealand remains the number one outbound destination for Australians.

Tourism New Zealand runs a range of campaign activities in Australia year round, including television advertising, online marketing, and public relations. It also works closely with regional tourism organisations, airlines, operators, and travel sellers to promote New Zealand and develop the market.

Australians are confident researching and booking New Zealand holidays online (see research channels) and Tourism New Zealand campaign activity in this market makes the most of digital media channels.

New Zealand has the highest consideration and preference as a holiday destination in Australia. It is perceived to be a destination where you can explore and discover unique places and experiences. Combined with competitive trans-Tasman airfares and a favourable exchange rate, New Zealand is in a good position to maintain visitor numbers this year.

Australia continues to be New Zealand's most important market in terms of visitor numbers, and Tourism New Zealand will be maintaining levels of investment in Australia.

Economy

Key Indicators
 
Against a challenging global backdrop, the fundamentals of the Australian economy remain strong and the outlook remains positive. Economic activity is expected to grow at around its trend rate over the next two years, the unemployment rate is forecast to remain low and inflation is expected to be well contained.

Australia's economic growth prospects are favourable, with real GDP forecast to grow three per cent in both 2012/13 and 2013/14, underpinned by growth in new business investment, non rural commodity exports and household consumption.

Sources:
www.budget.gov.au (GDP Growth)
www.xe.com (Exchange rates)

For more detailed information on the Australian economy read the economic analysis in New Zealand Trade and Enterprise's Australia country brief.

Outbound Travel

Total outbound departures are forecast to continue to record solid growth in future years.
While the forecast growth rate of outbound departures has been revised up to 6.9 per cent
and 5.1 per cent for 2012/13 and 2013/14 respectively - from the previously forecast
6.6 per cent and 4.9 per cent in each year - it does represent a slowing in growth.

Driving the forecasts are the assumed solid consumer economy, sustained high value of the
Australian dollar and continued expansion in aviation capacity to many key leisure outbound markets. In the longer term, the annual average growth for outbound resident departures is now expected to be 3.7 per cent with departures reaching 11.6 million by 2021/22 (source: Australia Tourism Forecasting Committee, TRA 2012 Issue 2).

According to Tourism New Zealand research, its target market in Australia is looking for a holiday destination where they can have fun, learn and experience new things, and feel relaxed, welcome, safe and comfortable.

Those aged over 40 are more likely to value feeling safe and welcome, and less likely to prioritise reducing stress and escaping everyday life; those under 40 are more likely to value personal challenge and getting an adrenalin rush.

Airline update

The proposed alliance between Qantas Group and Emirates will take effect from March 2013 - subject to ACCC approval. If approved, this agreement will result in two alliances that supply almost all trans-Tasman travel.

Qantas (QF), Emirates (EK) and Jetstar (JQ) will make up 36.5 per cent of the market and Air NZ/Virgin Australia will represent 60 per cent. This will essentially create a duopoly on trans-Tasman travel. It will also result in the probability of Qantas flying from Adelaide and Perth to Auckland which would be a potential boost for travel to New Zealand. Air New Zealand has been operating as a monopoly on those routes.

Cruise

The cruise industry is resilient and emerged strongly from Australia's recession. Mass market cruise is growing faster than other travel sectors, and according to market reports there is no foreseeable limit to industry growth. Australia has surpassed North America as the main source of cruise passengers to New Zealand in recent years, with Australian bookings for the 2012/13 season forecast at 95,000 passengers.

Just under 90 per cent of all Australia cruise passengers to New Zealand are not recorded as official International Visitor Arrivals (IVA). Cruise itineraries are primarily sold as sailing from Australia and returning to Australia. As passengers embark and disembark in Australia, they are seen as transit passengers in New Zealand. While passengers actually visit up to eight ports as the ships circumnavigate New Zealand, their visit is not counted as a holiday arrival unless they fly into, or out of, New Zealand.

The potential of the Australian outbound cruise market for the New Zealand tourism industry is huge, even though New Zealand at present only captures 13 per cent of Australia's cruise market. If Australia meets its target of 1 million outbound passengers per year by 2020, New Zealand's current market share would equate to 130,000 passengers.

Competitor Activity

There were more than eight million outbound resident departures for the year, an increase of 8.0 per cent on the previous year.

New Zealand remains the top destination for Australians, but it is losing market share at the expense of Indonesia (Bali), and the United States, along with growth in the popularity of cruise travel.

The superiority of the Australian currency against the United States dollar, cheap flights to Bali, and an increase in domestic tourism promotion in Australia means New Zealand faces more competition than ever for Australia visitors.