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Brexit and trade wars hit tourism revenues

Thursday August 15, 2019 Written by Published in Economy
Kiwi tourists Nathan Flannery and Sophie Mackenzie enjoy the beauty of the Avana harbour entrance. Visitor numbers from New Zealand are declining. 18100259 Kiwi tourists Nathan Flannery and Sophie Mackenzie enjoy the beauty of the Avana harbour entrance. Visitor numbers from New Zealand are declining. 18100259

Brexit and trade wars between the world’s largest economies are blamed for dwindling tourist numbers in Cook Islands.

 

Visitor arrival figures to June this year show a downward trend, quite opposite the growth that the country enjoyed last year – but those that come are spending more.

Halatoa Fua, the chief executive officer of Cook Islands Tourism Corporation, said the negative growth was largely due to external factors.

One of the reasons for this decline, Fua said, was the uncertainty in global markets.

This uncertainly was being driven by the trade wars between United States and China, as well as the Brexit withdrawal of the United Kingdom from the European Union.

Apart from January and April this year, which recorded 6 per cent and 4 per cent growth respectively, the remaining months have yielded negative returns.

In February this year, 7608 visitors were recorded in the country. This was 10 per cent less than the figure recorded in February last year.

The months of March, May and June all recorded negative growths: 10 per cent, 5 per cent and 1 per cent down, respectively.

The total visitor arrivals in the first six months of the year stands at 72,548. In the same period last year, 74,434 visitors were recorded. This represents a 2.5 per cent decline in visitor numbers for the first half of the year.

Cook Islands’ major market New Zealand is the biggest casualty with number of Kiwi visitors declining throughout the first six months, except April.

From January to June last year, Cook Islands recorded 45,204 visitors from New Zealand compared to 42,098 in the same period this year. This represents a decline of about 6.9 per cent.

Fua said the overall decline was largely due to the shrinking New Zealand market which contributes two-thirds of visitors to the Cook Islands.

He said it had also offset the growth recorded in the number of visitors from Australia and Europe this year.

“When you look at the New Zealand market for Jan-Jun 19, strong competition is adding to other factors such as extended summer periods and a slowing economy,” Fua says.

“Bali/Indonesia is up 37.6 per cent. Combining the Pacific Islands, growth for this period has stagnated at 0.3 per cent. Trade wars between the world’s largest economies and Brexit continue to provide uncertainty in global markets.”

Cook Islands Tourism Industry Council president Sue Fletcher-Vea also says competition in the New Zealand market has intensified with the likes of Fiji and Indonesia carrying out aggressive campaigns to attract Kiwi holidaymakers to their shores.

“Also New Zealand had a longer summer and their winter was quite mild. These are also some factors that resulted in the decline in visitors from New Zealand,” said Fletcher-Vea.

“This combined with the huge amount of marketing by Fiji and Indonesia market is solely responsible for the flattening and downward trend in the visitor arrivals.”

Fua said the decline was expected following significant tourism growth from 2015-2018.

The market conditions and growth projections were being discussed extensively with the tourism industry, he added.

“Strategies are put in place through traditional wholesalers and digital partners, to ensure the Cook Islands is in the forefront of holidaymakers in the New Zealand market.”

In terms of visitor expenditure as a measure of sustainable tourism, Fua said they continued to see a healthy increase.

Based on the latest International Visitor Survey to March 2019, visitor spend prior to arrival in the Cook Islands increased from $1967 per person in 2017/2018 annual average to $2197 per person.

Spend while in the Cook Islands was $162 per person per day compared to the 2017/2018 annual average of $149.

The average local spend per visitor during the entirety of their stay was $1442. “When pre-paid spend and in-country spend are combined, it is estimated that each visitor brings $2321 to the Cook Islands economy (or approximately $261 per day). This figure is higher than the $2051 average for 2017/18 and the same as the January to March 2018 figure of $2321.”

With the tourism industry now in the high season, Cook Islands Tourism and the Industry Council are hoping for a significant growth in the coming months.

Fletcher-Vea said they were experiencing increased bookings and lot more visitors compared to the first half of the year.

The high season was holding similar visitor arrivals to last year with some properties experiencing changes in booking patterns.