Summary:
Fewer domestic overnights, robust international spend, and job
declines
July was a challenging month for the West Coast's tourism sector. Despite a
slight rise in domestic card spend, commercial accommodation declined,
with a notable drop in both guest nights and occupancy. This was driven by
a decrease in both guest arrivals and average stay length. However,
international card spend showed strong growth. Tourism-related
employment for the month saw a decline.
Spending outpaces guest nights, hinting at day trips or average
spend
An increase in total domestic card spend (+1% YoY) when compared with the
domestic guest night decline of -13% YoY suggested that either the relative
average spend had increased, or the prevalence of day trip visitation. The
international card spend increase of +8% YoY, when contrasted with a +4%
YoY rise in international guest nights, also suggested a lesser increase in
average spend, or the prevalence of day trip visitation.
Domestic visitors self-cater, while internationals dine out more
When segmenting card spend by product type, international card spend
grew for all categories except for recreation (-2% YoY), whilst domestic card
spend by product produced mixed results. Food and beverage serving
showed further growth for the international market (+14% YoY) and a greater
contraction for the domestic market (-12% YoY) when compared to food and
beverage retail (domestic: -2% YoY, international: +4% YoY). This
observation suggested a continuing preference toward self-catering for
domestic visitors, while international visitors appeared to prefer dining out.
Domestic spending edges up, supported by West Coast support
Domestic card spend increased fractionally (+1% YoY) in July, which was on
par with the Marlborough and Hurunui RTO regions (both +1% YoY), and well
above the national average of -5% YoY. West Coast locals contributed to the
positive spend growth (+6% YoY), alongside other notable markets: Tasman
(+5% YoY), Nelson (+4% YoY), and Marlborough (+13% YoY).
Aussie and UK spending climb in July, while US declines
International card spend showed strong growth (+8% YoY) in July, equal to
Canterbury (+8% YoY). The Australian market grew strongly by +22% YoY,
taking the top position for distribution of total international market spend.
This was congruent with the off-season trend of 2023 and 2024. Other
notable market growth included the UK, which jumped by +26% YoY. The US
market declined by -11% YoY, a result that contrasted with significant growth
in most other RTO regions.
Domestic slowdown causes occupancy drop and shorter average
stays
Commercial accommodation declined overall for the West Coast region in
July, with occupancy falling by -2%pt. YoY and guest nights down by -9%
YoY. The drop in guest nights was driven by declines in both the average
stay length (-5% YoY) and guest arrivals (-3% YoY), while the fall in
occupancy was further exacerbated by an increase in available stay units
(+4% YoY). A comparison of the market mix, which showed international
guest nights were stable (0% YoY) while domestic guest nights fell by -13%
YoY, indicated that the decrease in average stay length and arrivals was
primarily attributable to domestic travellers.
Lodges and boutique spots double, propelled by international visitors
When segmented by accommodation type, guest nights decreased across
nearly all categories (holiday parks and campgrounds: -14% YoY, smaller
motels and apartments: -7% YoY, hotels: -8% YoY, backpackers: -13% YoY,
and large motels and apartments: -18% YoY), with the exception of lodges
and boutique accommodation, which doubled in guest nights (+100% YoY)
relative to July 2024. This growth was comprised of a +58% YoY increase in
domestic guest nights and an almighty shift (+450% YoY) in international
guest nights. This highlighted its strength as an emerging market, as shown
in the quarter-end figures (+357% YoY international guest nights vs. +32%
YoY domestic guest nights).
Guest declines persist despite pockets of international growth
Guest nights decreased across all TAs in July: the Westland District was
down by -5% YoY, the Buller District by -13% YoY, and the Grey District by
-10% YoY. These declines occurred despite an increase in international
guest nights in the Buller (+2% YoY) and Grey (+9% YoY) Districts. The
Westland District declined in both international (-3% YoY) and domestic (-7%
YoY) guest nights.
Tourism job dip in July, driven by food and accommodation
Tourism-related employment decreased by -3% YoY overall in July, a result
that aligned with the Mackenzie region (-3% YoY) but trailed the stable
growth seen in the national average (+1% YoY). This decrease was driven
primarily by the two largest tourism-related employment industries, food and
beverage services (-3% YoY) and accommodation (-8% YoY), and was
mitigated somewhat by recreation (+24% YoY) and travel and tour services
(+20% YoY).
Employment and accommodation decline, with minor stability in
places
Contractions in tourism employment were noted in the Westland (-4% YoY)
and Buller (-4% YoY) districts, whilst the Grey district remained stable at 0%
YoY. Food and beverage services declined by -7% YoY in the Westland
District, whilst remaining stable in both the Buller and Grey districts (0%
YoY). A decline in accommodation was reported in all three districts
(Westland District: -6% YoY, Grey District: -10% YoY, and Buller District: -8%
YoY).