| The current recessionary environment sweeping the | | | | inevitable high cost/value positioning of our tourism |
| world has been notable for both its severity, and also | | | | product make us more susceptible to recessionary |
| its wide ranging scope. Travel, and in particular luxury | | | | down-turns? The answer to this question is complex. |
| tourism, is sentiment-driven consumption, and is | | | | Our high cost/value tourism product feeds directly |
| therefore highly susceptible to the current | | | | into a boom-bust cycle of demand. The higher cost |
| recessionary mindset. | | | | aspect of our tourism makes us highly susceptible to |
| The decision to travel requires the means and the will. | | | | the downturn of an economic cycle -the bust! |
| In a recessionary environment, both of these factors | | | | Ironically however, while the distance to New Zealand |
| can be affected. The effects of a recession on the | | | | underpins our high cost tourism product, it also |
| means are obvious: jobs are lost; investment | | | | makes the demand for the same high value product |
| portfolios are compromised and devalued. What is | | | | non-perishable. Put simply, a trip of this magnitude is |
| less obvious however is the effect of a recessionary | | | | anticipated so much that the desire to do it remains |
| mindset on the will to travel. Tourism is all about | | | | for many years even if current economic |
| feeling good. People take luxury tours to enjoy | | | | circumstances do not allow it. Any demand that is |
| themselves. Even though a recessionary environment | | | | unfulfilled does not perish, but is simply deferred until |
| might not affect the personal means of certain | | | | circumstances improve, with a resulting deferred |
| market segments, the general negative environment | | | | boom in the industry. |
| surrounding a recession is often enough to take | | | | In summary then, the relatively isolated location of |
| away the feel-good factor, and therefore the will to | | | | New Zealand makes it highly susceptible to a |
| proceed with a sentiment driven purchase. | | | | boom-bust tourism cycle. In a recessionary phase, |
| The inbound New Zealand tourism industry is in a | | | | the high comparative cost of our tourism product |
| unique position in that our distance from almost all of | | | | exacerbates a drop in demand. However the high |
| our major markets makes travel to this country | | | | comparative value of our luxury tourism product |
| expensive. The cost of getting to New Zealand | | | | often results in that drop in demand being deferred |
| further encourages travelers to stay longer, thereby | | | | until the recessionary cycle is over, with a resulting |
| making their vacation even more comparatively | | | | tourism boom. |
| expensive. Recognizing this paradigm, the New | | | | It is critical for the success of tourism businesses to |
| Zealand Tourism Industry has through the years | | | | understand this boom-bust cycle, and use a planning |
| focused on the value added segments of the tourism | | | | horizon that covers both the boom and the bust |
| industry, including the luxury sector. This is an | | | | parts of the economic cycle. |
| understandable position to take but does the | | | | |