Build It And They Will Come
Tourism will consume Christchurch
1 April 2016
As Christchurch moves past the five-year anniversary of that terrible day in 2011 when so many lives were affected, the Reserve Bank has put out an interesting bulletin that looks at how the Garden City has been going with the rebuild. (Go to www.rbnz.govt.nz and read the bulletin ‘The Canterbury rebuild five years on from the Christchurch earthquake’) It makes for thought provoking reading and all in all, Canterbury gets a pretty good rating based on the scale and challenges the region faced.
Future Tourist Hotspot
One thing that really sticks out to me as I look at investment opportunities, is the tourism numbers before 2011 and today. In 2015, tourism overtook the dairy sector as New Zealand’s largest GDP earner. $13.5 billion vs $13 billion to the 12 months to September, 2015.
The sector has been flagged by MBIE (Ministry of Business, Innovation and Employment) in a recent forecast to continue to accelerate from 2.9 million tourists in 2014 to 3.8 million by 2021 so it’s a huge earner for New Zealand and the South Island already gets a fair share of this spend.
Since 2008 tourists arriving into New Zealand have grown 37% from 1.6 million to 2.2 million. All locations have experienced growth since 2008 except Christchurch (a direct result of the Canterbury earthquakes).
Number Of Hotels
What is also very encouraging is in the 12 months to January 2016, nearly 500,000 tourists visited Christchurch and if we go to pre-earthquake comparisons, this number should be more like 750,000. I am amazed that it is as high as it is with the few hotels currently open and assuming the numbers eventually follow their previous city spreads, Christchurch can expect a lot more people wandering around with cameras and maps.
If we look down the road in Queenstown, being the second main tourist beacon for the South Island, the numbers there have grown from 28,000 in 2008 to an astonishing 207,000 in the year ending January 2016. By nature of being the gateway to the lower South Island, Christchurch should benefit from the Queenstown Lakes District’s growth, once the rebuild is complete.
Set To Grow
The new Christchurch has been touted as a world-leading example of a green, open space and low-rise city that will attract new tourists and residents alike. It would be safe to assume that when the sectors that support tourism have been re-established, the local economy will benefit and provide new growth over and above the rebuild economy that is currently Canterbury’s main driver.
As a renovator and provider of short term accommodation in a number of centres across New Zealand, we have been involved in the tourism market for a number of years. Looking at these statistics I get even more comforted that this location isn’t under any threat and that investing in the Garden City makes sound commercial sense.