New Zealand is enjoying its best summer for overseas tourist arrivals but operators are worried that demand from our most important market, Australia, could be dented by the fall in the value of the Aussie dollar.
Latest figures show an overall increase of 5 per cent in international arrivals for the past year to 2.83 million, the "no vacancy" sign will be up in tourism hotspots during the next two months and operators are upbeat.
Tourism Industry Association chief executive Chris Roberts said that almost without exception his members were experiencing "an outstanding" season.
"The forward bookings are looking very strong - we're going to have a record summer and that momentum will increase with the Cricket World Cup starting in February."
The Fifa under-20 football tournament in the middle of the year would also raise the country's profile in diverse markets, including South America if teams from countries there qualified, he said.
Roberts said "one potential handbrake" on our biggest international market, Australia, was the weakness of their dollar.
In the 12 months to the end of November, 1.24 million Australians visited New Zealand, an increase of 3 per cent on the previous year, but their spending dropped 1 per cent to $2.03 billion. The Australian dollar has been trading at record lows against its Kiwi counterpart and Roberts said that if this carried on the damage could continue.
"That is making New Zealand more expensive for Australians and that's showing up with the average spend declining - we're still getting growth in numbers but what they're spending in Australian dollars is down."
It would be difficult to get spending growth out of that market and he said the high Kiwi dollar would continue to make Australia a very attractive option for New Zealanders.
"We have that perennial problem of convincing New Zealanders to holiday at home rather than hop across the Ditch."
Ministry of Business, Innovation and Employment figures show 1.08 million New Zealanders visited Australia in the past year, an increase of 8 per cent on the year before.
Listed operator Tourism Holdings is also concerned about the inbound Australian market.
"It's absolutely their economy. We have to keep pushing the value proposition - it's going to be a challenging one. We also need to be aware that amongst the glory from all the other markets it's one that we need to be cautious about," said chief executive officer Grant Webster.
On December 18, Flight Centre issued a surprise profit warning, blaming challenging trading conditions in Australia for eating into its earnings, saying people were still worried about the federal Government's Budget.
But Tourism New Zealand chief executive Kevin Bowler - whose government-funded organisation markets this country overseas - is more optimistic about demand out of Australia. He said the Aussie dollar was also falling against other currencies further away and New Zealand could pick up market share from long-haul destinations such as the United States.
"Australians are committed holidaymakers," he said.
All three tourism bosses say hotels and other facilities will be stretched to maximum capacity this summer, particularly in Auckland and Queenstown during the January and February peaks.
Roberts said the pressure on facilities showed the need to entice tourists into the regions and encourage them to visit at other times of the year.
"We're going to have some capacity constraints which we haven't seen in New Zealand for a long time," he said.
"Auckland on certain weekends this summer and Queenstown during Chinese New Year will be full."
Webster's Tourism Holdings upgraded its profit forecast just before Christmas because of strong bookings.
Its core business is hiring out motorhomes and while it might not have enough of them for the February peak "you never want to build a church for Easter", he said.
"We think we've got the balance right and we'll see what continues to happen over the next few years."
Coming up in 2015
• Tourism set to continue summer highs with major events including the Cricket World Cup lifting New Zealand's profile in the important growth market of India.
• New air routes flown by Air New Zealand to the US and South America will stimulate inbound tourism.
• Ongoing uncertainty over the Auckland conference centre after SkyCity's pre-Christmas plea for some public funding.
• Chinese tourism will grow, visitors will spend more as they continue to travel more independently. A resurgent United States economy will boost that market.
• The weak Australian dollar could deter travel from that market.
• The "Hobbit effect" will continue although it has peaked.
• Prime Minister John Key has kicked off discussion of a bed tax in Queenstown to help pay for infrastructure.
• The new safety regime for adventure tourism operators is in place although it will not prevent all accidents.
