Tourism is one of New Zealand's most significant economic drivers, ranking as the country's second-largest export sector.
However, the nation is lagging behind global counterparts in post-COVID recovery, with international visitor arrivals hovering at just 85% of pre-pandemic levels. In contrast, the rest of the world has either returned to or exceeded pre-COVID tourism levels. Given New Zealand’s ambition to double exports, increasing international tourism is the most immediate and effective lever available.
New Zealand needs to position itself as a destination that is poised to compete against destinations like Australia, Japan, and Europe, where well-funded tourism strategies ensure premium visitor experiences. Simply reopening borders is not enough; the visitor experience must justify the additional expense of travelling to the bottom of the world. The reality is that regional tourism investment outside of major centres has been incremental, aside from a few major investments such as Wai Ariki in Rotorua. International visitors want to explore beyond the cities, yet large-scale regional tourism investment has largely not materialised due to barriers such as high construction and labour costs and low population bases.
Unlike other global tourism hubs, New Zealand does not offer incentives to attract major tourism investors. Countries worldwide, including highly capitalist markets like the United States, actively court tourism investment through financial incentives and partnerships. Large-scale tourism investment brings long-term benefits: stable employment (0.4 to 0.5 full-time employees per hotel room), GDP growth through construction and operations, and economic multipliers that stimulate retail, transport, hospitality, and tourism services. Moreover, the presence of internationally recognised tourism brands creates confidence, attracting further investment and supporting regional development.
A strong precedent exists for targeted economic incentives – New Zealand’s film industry has received nearly $400 million in rebates since 2010, yet tourism delivers a far greater return on investment. Unlike film production, which is short-term and mainly concentrated in major centres, tourism infrastructure creates enduring employment and benefits regional economies directly. There are different mechanisms such as GST rebates, accelerated depreciation and loosening up of FDI settings, that could be explored which could be self-funded through new government tax revenue, avoiding direct impacts on government expenditure while unlocking long-term economic growth. RotoruaNZ supports a discussion on these mechanisms to create an investment environment that encourages large-scale tourism development.
In the short term, RotoruaNZ is working to turn the dial on tourism by advocating for the addition of China and India to New Zealand’s visa waiver programme. These markets represent high-value growth opportunities that could significantly increase international visitor numbers. Additionally, RotoruaNZ is collaborating with airlines to increase capacity from key international markets, particularly Australia and the United States, ensuring that more seats are available to bring visitors directly into the country. We’ll also continue to partner with North Island RTOs on campaign activity where there are shared objectives and target markets.
In the long term, RotoruaNZ is committed to ensuring that the right policy settings are in place to attract large-scale tourism investment that supports sustainable growth. A strategic, collaborative approach is required to unlock the full economic potential of tourism, ensuring Rotorua and the wider New Zealand tourism sector remain globally competitive.
Hosting TRENZ 2025
Alongside this important work, a significant highlight for the upcoming year is Rotorua's role as the host city for TRENZ 2025, New Zealand’s largest international tourism business event. This event will bring together leading tourism operators with global and domestic travel buyers, providing an invaluable platform to showcase Rotorua’s diverse offerings. We anticipate that hosting TRENZ will not only boost our local visitor economy but also reinforce Rotorua’s reputation as a leading destination in Aotearoa.
