Tourism business confidence drops

Media release

21 June 2012

Tourism business confidence drops

Tourism business confidence remains down, with fewer businesses feeling confident about the next three months.

The Ministry of Economic Development’s Tourism Industry Monitor, published today, shows the business confidence index dropped to 52 in the May 2012 quarter, down from a record high of 144 in September 2011, and a further fall on the 60 recorded in the three months to February 2012. Index values of lower than 100 indicate more pessimists than optimists.

“After record high confidence levels during the Rugby World Cup, the tourism industry has reverted to levels of confidence similar to the same time last year, when the business confidence index registered 56,” says Peter Ellis, Tourism Research and Evaluation Manager at the Ministry of Economic Development.

“The fall in confidence is matched by industry demand, which is expected to fall by 4.1 percent over the next three months, and profitability, which is expected to fall by 3.4 percent, compared to the same period last year.

“Global economic conditions, the international visitor market and the exchange rate are the main concerns for tourism businesses.”

For the first time in the past year, South Island respondents are more confident than North Island respondents.

“Of the South Island respondents, 36 percent experienced an increase in demand over the past three months relative to the same period last year, compared to 28 per cent of North Island respondents,” says Mr Ellis.

The Tourism Industry Monitor is an industry initiative published by the Ministry of Economic Development each quarter to provide up-to-date information on the performance of the tourism sector.

The May 2012 quarterly report is available from the Tourism research and data section of our website.

ENDS

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