Since the borders were closed in March, we have consistently argued that an increase in spending by New Zealanders on domestic holidays could never make up for the loss in revenue from foreign visitors. Data for 2019 shows that international tourism was worth $16.0b to the New Zealand economy, while Kiwis spent $6.2b on overseas holidays.

But our chart of the month shows that the hit for tourism operators so far has been mild compared with what can be expected during the peak summer months.

Because more Kiwis tend to go overseas during our winter, and many more tourists come here during our summer, we estimate that the shortfall in aggregate spending between May and October averaged about $400m per month. In contrast, between November and March, we estimate it will be more than three times that amount, at over $1.2b per month. And that’s making the heroic assumption that Kiwis will simply spend all the money they had intended for overseas travel on domestic holidays.

The next five months are shaping as crunch time for the tourism sector. Even with government support, we expect the looming hole in revenue will prove to be insurmountable for many operators.