Somewhere the other day I noticed a job advert (no, I wasn’t looking) for a role in tourism policy at MBIE. I guess one has to do a bit of a hard sell to get good policy analysts to work in such a minor area of government, but the rather over the top claims (‘high profile portfolio’, ‘make a difference to New Zealand’s economy’) irked me a bit, so I dug out a bit of data.
The World Bank has collated data on international tourist arrivals for a huge range of countries and territories. For these purposes, “tourist” includes most business visitors (anyone not visiting for a purpose directly remunerated from within the country visited). The World Bank data comes with quite a few health warnings – countries collect data in different ways, some only capture those staying in hotels for example, and I presume in the Schengen area there is no real way of capturing day trippers. Being an island, and with our good international arrivals cards, New Zealand’s data are pretty comprehensive, with little risk of undercounting. On the other hand, no one comes to New Zealand for an afternoon’s shopping.
In 2014, France had around 83 million visitors. New Zealand was the 66th most visited country in the world with 2.8 million visitors, wedged between Qatar and Uruguay (I’ve noted previously that the beaches looked nice in Uruguay). Remarkably, although I know almost nothing about the country, the Kyrgyz Republic comes in just ahead of Qatar.
What about the number of visitors per capita? I only bothered looking at the places with at least one million visitors a year. Even so, some tiny places top the list – Andorra, reportedly has 32 visitors per capita each year, and Macao (less surprisingly with all those casinos) 25. Here is a chart (lopping off the tiny places at the top).
We do considerably better than Australia, of course, but we are still a long way down the chart. And that isn’t really that surprising. After all, we are long way from almost anywhere, which means it is really expensive (time and money) to get here. The upside is that the median visitor here probably spends more than they do in most of the other places – having spent so much to get here, you tend to stay a bit longer – but it doesn’t have the feel of an industry with massive growth potential (and that is setting aside the point various other commentators make, that tourism is neither a high productivity sector, nor one with huge apparent productivity growth opportunities. Which is not to decry tourism. Most of us like holidays.
I also dug out the data for OECD countries on exports of services. International tourism is classified as a services export, and for New Zealand it is a very large component of our services exports. But that isn’t so everywhere.
Here is the share of services exports in GDP last year.
Large countries don’t tend to do as much international trade as small countries – they don’t need to, there are plenty of opportunities and markets at home. I’ve highlighted the large countries (more than 40m people) in green, and the small countries (under 11m, where there is a natural break) in red. New Zealand has the lowest services export share of any of the small countries (and, by the look of it, the lowest real dollar value of services exports as well) . Of course, we are much more remote than the other small countries, but it just highlights the difficulty of generating really high incomes for lots of people in a place so distant.
(I don’t purport to understand the Irish numbers, although I assume much of it has to do with tax.)
And it isn’t as if the picture has been getting better. Here is the change in the services exports share of GDP (in percentage points) over the last decade.
If one looks at a 20 year history rather than just 10 years there are fewer countries to compare with, and New Zealand’s relative performance isn’t quite so bad. Over that period we were only 4th worst.