A tourism industry that relies heavily on tourism dollars is struggling to recover after a major blow from a devastating drought.
It is the first time the tourism industry has been so badly affected by the global economic downturn, says Tourism Economics and Technology’s executive director Andrew Williams.
New Zealand tourism revenue fell $1.5 billion to $2.3 billion in 2016, but its economy is projected to grow by $1 billion to about $7 billion this year.
But with more than half the country still in drought, the tourism sector is struggling.
The biggest losers were the South African tourists.
In February, a government agency said tourism would contract by as much as 40% in 2019, and tourism companies warned they could have to close their doors if the country’s tourism minister did not act.
Tourism economist Andrew Williams said the slump in South Africa’s economy could also affect the tourism sectors of New Zealand and Tanzania, which have seen similar downturns.
“There are very few businesses that are willing to relocate,” he said.
“You’ve got to look at the economic impact and the social impact.”
In New Zealand, the loss of international tourists was already apparent in the tourism-dependent communities of the capital Wellington, where the decline was more profound than elsewhere in the country.
There are still more than 60,000 international tourists in Wellington, which has become one of the world’s busiest destinations for international visitors.
But the numbers are dropping.
A year ago, about 80% of international visitors were from Australia, followed by Brazil, Colombia, India and the United States, according to the New Zealand Tourism Council.
In Wellington, international arrivals dropped from 1.4 million in 2017 to 736,000 in 2020.
But the tourism boom was also hit by a recession.
New Zealanders were still keen to visit South Africa, but the recession was too big to ignore, said Tourism Economics’ Williams.
The tourism sector was forced to shut down.
He said tourism could also face a challenge from the growing popularity of tourism in India and elsewhere in Africa.
Australia’s tourism industry is also facing a challenge.
The Australian government is reviewing its foreign direct investment rules, which are expected to affect the sector in a big way, said Mr Williams.
New York has seen its foreign visitors decline by half in a decade, and Australia’s economy is expected to contract by $6 billion in 2020, according the Australian Bureau of Statistics.
South Africa is already in recession.
Tourism’s growth in South America’s largest economy slowed from 8.6% in 2015 to 6.6%, according to data from the South Africa Tourism Council, down from 5.3% in 2014.
Its economy is forecast to grow only 2.6%.
The country has been hit by two recessions in the past 10 years, and the downturn has taken a major toll on tourism.
In November, the South American tourism council warned that tourism revenue would decline by $9.8 billion by 2020.
The council’s chief executive officer, Richard Mokwenzi, said the industry was now struggling to pay its bills.
More than 80% (70,000) of South African tourism revenue is used for rent or catering and food, he said, and it is estimated that half the budget is spent on advertising.
The economy is already at risk because of the recession, Mokenzi said.
Other major tourism regions are also struggling, including Peru, which is also experiencing a recession, and Vietnam, which had its own economic slowdown and was already facing a severe shortage of foreign tourists.
In some regions, the recession is so severe that tourism companies are having to close the doors, leaving locals without any income.
According to Tourism Economics, the country is now struggling with the worst of the downturn.
It is now one of only two countries in the world that have lost a significant amount of revenue, it said.
“The situation is getting worse by the day,” Williams said.