Investing for the long game

By Tourism Industry Aotearoa chief executive Rebecca Ingram

Elections bring with them the usual political debates around where to spend money and save costs. It’s important to be strategic about our cost cutting and take care not to undermine programmes that deliver real benefits. 

Tourism is an industry that many believe looks after itself. Pre-Covid, it was the country’s biggest export earner, and we are the third biggest today.

Covid hit it hard, but just a year since our borders fully opened, the tourism industry is again doing some economic heavy lifting, accounting for 9.5% of the workforce and thousands of small to medium-sized businesses.

Experience has taught us that New Zealand benefits from the vibrancy and opportunity that tourism brings, and the airlinks that carry our visitors also carry our high value exports and allow our social connection with the world.

But valuable industries like tourism do not just happen by accident. They need to be well-led and managed. They need a plan, and that plan will need support.

The Government has announced a number of funding cuts to save costs, including $60 million from the tourism portfolio. The savings are to come from Tourism New Zealand, which does such important work to ensure New Zealand competes on a global stage, and the Innovation Programme for Tourism Recovery.

Tourism NZ’s funding cut goes well beyond the 2% baseline cut that other agencies are being asked to find, and the innovation programme was only rolled out in November.

There is also a signal that critical funding for the New Zealand Cycle Trails will move to being funded from another source.

In TIA’s view these cuts disproportionately impact tourism and they place at risk our ability to develop in a way that really works best for New Zealand.

Tourism is an industry of ambition. We are looking beyond our critical economic contribution and striving for positive cultural, social and environment outcomes. We need to invest in infrastructure and facilities, to develop our people, to develop new products and services, and to reduce carbon emissions, among other goals.

We have such a plan. Tourism Industry Aotearoa represents about 1300 member organisations right across the tourism industry and we are currently working on a reset of our industry strategy.

In this strategy we identify secure, sustainable funding for tourism infrastructure and activities as one of the biggest challenges we face.

It seems counter intuitive to suggest tourism needs better funding or funding mechanism. But despite our size, tourism has a lack of industry good funding, research, or data for planning and for innovation.

Our observation is the central government does well from tourism – in 2020 this totalled $3.9 billion from GST alone. Yet funds do not flow to local government for investment in infrastructure or to the industry itself for activities it should be doing – business capability, sustainability, research, advocacy – at the scale and depth needed to make a real difference.

Some regions are discussing the idea of bed taxes to generate this funding. Rather than ad-hoc solutions across the country, the industry favours a national approach that will provide the most equitable, efficient, and sustainable solution.

Our upcoming Tourism 2050: A Blueprint for Impact also recommends a National Policy Statement for tourism. This would certainly give some stable, longer-term direction to tourism and lift us above a three-year cycle.

Tourism is important. We have great ambitions for a future with broad and ongoing benefits. It will need commitment and courage from all those involved, whether government, industry and range of other stakeholders, to make it happen.

Now is the moment to be strategic and invest in the tourism we want. Let’s invest so it can pay a bigger dividend for us all in the long term.

Industry News

Investing for the long game

7 September 2023

Thanks to our Strategic Partners

Westpac

Thanks to our Strategic Partners

Tourism Industry New Zealand Trust

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