International tourists remain significant source of spending growth
Auckland, Monday 5 March, 2018
International tourists continue to contribute strongly to spending growth, making up over 10% of the extra total spending through Paymark in the last four months and over 50% of growth amongst Accommodation merchants.
Spending nationally through Paymark was $5,014 million in February, up in underlying terms by 5.1% since February 2017 and up 0.1% in seasonally adjusted terms since January 2018, confirming an ongoing, albeit moderate, spending momentum.
The highest annual underlying growth rates were recorded by merchants in Marlborough (16.0%), which includes Kaikoura in the Paymark statistics, and Southland (11.6%). Slow growth was experienced in Auckland/Northland (4.4%) again, as well as in Nelson (+1.6%) and Canterbury (+3.5%).
Over the recent, busy four months, nationwide Paymark spending has totalled $20,921 million, up 5.4% in underlying terms on November to February twelve months earlier. Within this total, payments with foreign-issued credit cards have totalled $1,183 million, constituting 5.7% of all payments. At the margin, the tourist impact is greater with the annual growth in international credit card spending being 11.3% of the total spending growth.
This spending impact of international tourists continues to be greatest amongst Accommodation merchants, where they make up 32.8% of the sector payments through Paymark and 55.3% of their annual payment growth. Other merchants having strong links with international tourists include duty free and gift stores within “Selected retail shops“, art galleries, museums and activity operators amongst “Activities and events“ and airlines and rental vehicle companies within “Transport“. Conversely there are many merchants where foreign-issued credit cards represent less than 2% of all spending, such as hardware stores, tyre companies, financial service providers and utility companies.
Spending with foreign-issued credit cards and total spendingFigure 2: Spending with foreign-issued credit cards and total spending through Paymark for four months to Feb-18
through Paymark for four months to Feb-18
Credit cards issued in Australia represent a large portion of foreign card spending, being 29% of total foreign credit card spending in the recent four months. Growth in spending from this source remains strong at 14.0% per annum. Also strong was spending growth with Chinese-issued credit cards. Conversely UK spending through Paymark declined this summer.
Origin of foreign-issued credit card spending
through Paymark for four months to Feb-18
Figure 3: Origin of foreign-issued credit card spending through Paymark for four months to Feb-18
The regional mix of international tourist spending over summer highlights several trends. First, there is tourist spending returning to Marlborough, now that State Highway 1 is open again, and consequently a shift away from neighbouring Nelson. Second, there has been strong tourist spending growth in regions such as Otago, West Coast and Southland where international tourism traditionally plays a relatively large role, a likely factor behind the general strong spending growth in this part of the country in recent months. Third, there are also other regions where foreign spending plays a relatively lessor role than domestic spending that have experienced strong international spending this summer, including Waikato, Palmerston North and South Canterbury. And last, strong international spending growth in Auckland/Northland confirms the reason for the slow total spending growth in this region of late is due to domestic factors, likely to be a slower housing market.
Regional foreign-issued credit card spending
through Paymark for four months to Feb-18 Share of NZ
Figure 4: Regional breakdown of foreign-issued credit card spending through Paymark for four months to Feb-18
PAYMARK All Cards Data
PAYMARK All Cards Data (Feb 2018 versus same month 2017)
- Hawke's Bay
- Palmerston North
- West Coast
- South Canterbury
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