Japanese tourist numbers forecast to plunge then rebound

Wednesday 30th March 2011

The number of Japanese tourists visiting New Zealand will fall by 45.5% to the lowest level since 1985 in the second quarter of this year due to the earthquakes in both countries.

The quarterly drop will have a large impact on total New Zealand tourism spending because Japanese tourists spend $4500 each on average, nearly double the $2300 most tourists spend.

This is according to an analysis of the impact on the tourism sector of the recent traumatic events in Christchurch and Japan by Philip Borkin, an economist at Goldman Sachs & Partners New Zealand.

He concludes, after studying the impact of other natural disasters on tourism, that the impact varies but it is usually temporary.

Overall, he expects the number of tourists arriving in New Zealand to fall by 10% in the second quarter of this year. Visitor arrivals will rebound in the third quarter and be back to pre-earthquake levels, excluding the Rugby World Cup, by the end of the year.

"Our analysis of other major disasters suggests there is no 'standard template' for the impact these events have on visitor arrivals into those countries," the Goldman Sachs report said.

"However, what does appear to be common across the majority of the events is that any impact is relatively short-lived."

Visitor arrivals recovered quickly after the 1999 Taiwanese earthquake, as they did in Thailand after the 2004 tsunami.

"Of course, we do not know ... what arrivals would have been if the event had not occurred," the report said.

The report also said that disaster events strike the tourism sectors of smaller nations harder.

The magnitude 7.1 earthquake in Christchurch in September did not hit the tourism sector. As at January 2011, seasonally adjusted visitor arrivals were 2.7% above the pre-quake level.

But a "sharp negative response" was expected to the magnitude 6.3 earthquake in February as damage was greater, lives were lost and international media coverage was greater, the report said.

Goldman Sachs expected this reaction to abate as the "shock and awe factor" died away.

"Visitors are likely to appreciate eventually that the whole country has not been damaged by this event and we expect promotional activity, both by the public and private sectors, to be ramped up to encourage visitors. The Rugby World Cup, which starts in September, could also act as a medium for advertising the country.

The Ministry of Tourism expects the sports event to generate 85,000 international visitors, while Goldman Sachs estimates 66,000.

Additional capacity on airlines will help increase visitor arrivals, the report said.

"We expect seat capacity growth into Asia to reach 30% per annum by the end of 2011, including new services from Singapore, Kuala Lumpur and China. In addition, soft demand conditions are likely to ensure that pricing, particularly for new entrant airlines, is competitive, supporting demand despite recent increases in fuel surcharges."

Goldman Sachs forecasts visitor arrivals will fall by 0.3% in 2011 and rise by 5.6% in 2012. Stripping out the Rugby World Cup, a 0.7% fall in visitor arrivals is expected in 2011 and a 3.2% rise in 2012.

NZPA

Comments from our readers

No comments yet