US market continues its strong growth trajectory

All indicators point to a positive growth trajectory for the US market in the wake of its strong economic recovery, was the message delivered to stakeholders at Tourism New Zealand's research and market insights webinar, held last week.

For the year ending September 2014 arrivals from the US were up to 213,680 - an 11.6 per cent increase on the previous 12 months. Holiday arrivals were up 14.3 per cent, at 127,968, indicating that holiday arrivals are driving the overall growth.
Gregg Anderson, Tourism New Zealand's (TNZ) General Manager - Americas & Europe, says, "The appetite for international travel is really rebounding and New Zealand is doing particularly well out of that at the moment.

"US holiday visitors are valuable to New Zealand, as their expenditure  is worth around $773 million per year while the average US holiday maker spends around $4000 - well above the average holiday spend of $2,850."

Similar to other Western markets, there is a strong seasonal trend around US holiday visits, with almost half (42 per cent) choosing to visit during New Zealand's summer months, December to February.

"A lot of growth has occurred in December and February, but we've also seen growth in the shoulder seasons around summer in November and March. The increase in US cruise visitors may be contributing to this," says Gregg.

The US is the second biggest cruise market for New Zealand, with 33,900 US holiday visitors arriving in the 2013-14 season. Almost one in ten US holiday visitors arrive by cruise ship, while one in six either arrive on a cruise or get on a cruise in New Zealand.

"The focus is now on pre and post cruise tours. We are starting to see some really innovative programmes that are adding different destinations in New Zealand, such as Stewart Island, and coach and cruise operators combining to provide tours."

Gregg says the 20-34 age segment has also grown significantly in the last ten years. "50 plus used to be our top US holiday visitor demographic, so the rise of this younger segment gives us the best chance of getting repeat visitation over a lifetime."

TNZ's research shows the 20-34 age segment seeks outdoor and adventure activities, including bungy jumping, glacier walking, skydiving and hiking, and like to socialise in bars and nightclubs. The second peak age segment, 45-64, typically includes couples travelling independently around NZ, while the 65-74 segment tends to use organised travel styles such as coach and cruise. Both age groups typically visit wineries, attend cultural performances and visit museums.

"There is quite a lot of dual destination travel out of the US with 73 per cent visiting another country during their trip making seven days a key time period for a holiday in New Zealand, although some stay for as many as 21 days."

While California still provides almost a quarter of US holiday visitors to New Zealand (23 per cent), arrivals from Hawaii have doubled in the last two years to 8 per cent, continuing to show increases as a result of Hawaiian Airlines' direct service to New Zealand.  

"All airlines that provide direct services to New Zealand are increasingly gaining a bigger share of the market, with 30-40 per cent of travellers now buying directly from the airlines. This is leading to a disaggregation of land and air travel sales where travellers are tending to buy air and land travel separately."

Online travel has grown significantly, especially amongst the younger segment who have only ever known online sellers as places to buy their tickets, although these agencies are not as strong when it comes to selling ground products. Travel retail agencies and consortiums, such as Virtuoso, have strengthened in their buying power and customer bases, and are now a vital part of TNZ's US trade, marketing and PR mix.

"While wholesalers probably account for less than 35 per cent of the air sales to New Zealand now, compared with 50-60 per cent ten years ago, they still account for around 70-80 per cent of the value, because they are the companies that are putting together detailed programmes for consumers in conjunction with in-bound tour operators."

The US is a priority market for TNZ and increased focus on premium, special interests and business events will continue over the next 12 months.  The Hobbit will also continue to play a key marketing role, particularly around the release of the last film, The Hobbit: The Battle of the Five Armies, from late November to March 2015.

Read more about TNZ's marketing activity in the US. You can also read the latest US market infographic here and webinar presentation slides here.