Leading image: Anchorage, Abel Tasman National Park
This is a post by Paul Callister and Heidi O’Callahan
Tourism in New Zealand has suffered under Covid 19. As the Queenstown mayor says:
We must diversify our economy. We must also consider the negative side of global tourism and the concern for the effects of mass tourism on our communities and our environment. In the future, we must do things differently…
we need to do all we can to welcome Kiwis here.
Given these uncertain times, planning to rebuild tourism needs to involve scenario mapping. This can highlight the investment options likely to provide multiple benefits regardless of how the future unfolds. We should aim for more secure employment, better opportunities through enhanced transport systems and far better care of the environment.
The Parliamentary Commissioner for the Environment, Simon Upton, released a report on sustainable tourism just late last year, entitled
Pristine, popular… imperilled? The environmental consequences of projected tourism growth
He identified many challenges and pressures in the sector:
- freedom camping,
- visitor density and loss of natural quiet,
- low pay in some areas of the sector,
- the very high carbon footprint of NZ tourism through long haul flights and cruise lines,
- local degradation of landscapes, water quality and biodiversity.
He discussed growth in the sector, plus factors that could interrupt it:
unforeseen events – the outbreak of a global pandemic, regional conflict, the spread of protectionism or an economic downturn – could also detract from continued growth
This year has shown how strategic planning for such unforeseen events is crucial.
It’s not difficult to see why the challenges have arisen. Visitor arrivals had been growing rapidly, from just 465,000 arrivals in 1980 to 3.9 million in the year ended December. This was a significant influx in relation to New Zealand’s resident population. By 2019, there were just 1.3 residents for every arrival over the year.
Source: Base data Infoshare, Statistics New Zealand
Overseas travel by New Zealanders was growing strongly in recent years, too. In 1990 there were 720 thousand trips overseas. This had risen to just over 3 million in the year ended December 2019.
Source: Base data Infoshare, Statistics New Zealand
It’s hard to see which period on the graph we would consider ‘business-as-usual’.
The view of Mt Ruapehu from the InterCity coach. Image Credit: Chris McKellar
The Tourism Minister Kelvin Davis has announced that the Government and industry are working together on a plan to restart tourism.
Davis said he expected to receive advice on the recovery plan in the next two weeks with Tourism New Zealand (TNZ) leading the project and getting input from the Ministry of Business, Innovation and Employment, the Department of Conservation and industry.
The Department of Conservation appears to be the environmental voice here. Alongside its conservation activities, it has been pushed into a tourism role in recent years.
The view of the Rangitikei River from the Northern Explorer. Image credit: Chris McKellar
Simon Upton has offered his assistance with planning for this recovery, in a letter that stresses the need to focus on the long-term, and questions whether the taskforce is equipped to allow for strategic thinking:
any process of reflection needs to resist the temptation to go back to old ways. TNZ’s statutory mandate and primary area of expertise is marketing. Its role in the broader tourism policy landscape is limited. ‘Reimagining’ the way we govern tourism, how and to whom we market New Zealand and how we manage our visitors requires a different perspective.
Air New Zealand’s Cam Wallace (one of the tourism ‘leaders’ uniting to show support, and presumably on the taskforce), said:
But we do have a sense of confidence Air NZ will re-emerge from this crisis bigger and better.
This is a curious statement that doesn’t align with the country’s pressing environmental and social challenges. We need aviation to contract from what it was, not expand. Our emissions must drop radically by 2030, well before technological advances in aeroplane emissions will be developed and widespread.
New Zealand already has one of the highest CO2 emissions per capita from aviation in the world, primarily based on international travel. Most of this CO2 is ‘hidden’ from the general public as international emissions are not generally counted in official publications.
In transport, the modes with the most rapidly rising emissions are light trucks (which include double cab utes) and international aviation. Domestic aviation emissions had been declining, a trend that changed 5 years ago, and the latest figures show the year’s increase was 12%.
Cars are the biggest contributors to New Zealand’s transport emissions. In the following graph, aviation emissions do not include the radiative forcing effect. Once this is included, the effect of the international aviation emissions is approximately double what is shown, meaning aviation in total contributes roughly the same amount as our cars do.
Source: New Zealand’s Greenhouse Gas Inventory.
Not shown is national and international shipping.
When planning how the sector could be rebuilt, the figures for tourism pre Covid-19 are useful:
- International tourism in NZ: $17.1 billion
- Domestic tourism in NZ: $23.7 billion
- New Zealanders holidaying and business overseas: $6.5 billion (plus flights).
- GDP in the same March year was $303.4 billion
Source: https://www.stats.govt.nz/information-releases/tourism-satellite-account-2019
Simon Upton advised Kelvin Davis:
The pressures I identified are, as the industry repeatedly reminds us, not just a result of overseas visitor growth. The consequences of domestic growth are significant too…
In the longer term, sustainable tourism will involve lower international tourist numbers than what we had before. In the short to medium term New Zealanders’ holidaying needs must be prioritised, due to the risks of Covid 19 being reintroduced.
But both short and long term we need to work towards low carbon lifestyles. Tourism can be part of a responsible lifestyle, if the options on offer are low-carbon, and travellers are aware of their own carbon budgets. Can we do this while establishing an economically viable industry?
View of Mt Ngauruhoe from InterCity Coach. Image Credit: Chris McKellar
It’s important to note that the dependence on international tourism was not equally spread across New Zealand. Overall, regions in the South Island have been far more dependent than those in the north, especially the West Coast and Otago:
Source: MBIE, Tourism dashboard. Blue indicates North Island regions, red South Island.
Other countries are coaxing their populations to travel domestically. The Czech Republic has closed its borders to tourists and is drafting a proposal to incentivise domestic tourism:
so that no new wave of infection is caused by travellers going to countries where the epidemic is not yet over… I think that our citizens could use this situation in order to enjoy the beauties of their own country,
If our goal is to increase sustainable domestic tourism, New Zealand will need to overcome our lack of low-carbon transport options.
In recent times, aviation has been considered the best option, but we’re facing a climate emergency. To tip the balance towards more sustainable transport options, air ticket prices should be set to recoup the full costs of flying, including carbon emissions and keeping airports open.
The taskforce needs to consider alternatives to subsidising airports and airlines. Establishing lower carbon transport networks to serve multiple goals (eg rail improvements that would both form the backbone of an improved public transport network and of an improved freight network) would serve us better in the future under most scenarios.
Currently, the rail network is too slow and expensive to appeal to most northerners considering a South Island holiday, unless they have a lot of time to spare at either end of the holiday.
Source: Wikipedia, CC BY-SA 3.0, Northern Explorer near Waiouru.JPG, Created: 19 November 2012
We’ve been campaigning for a shift to a low carbon national public transport network throughout New Zealand. Improvements required to make it work include:
- Better train stations, bus stops and interchanges, including in Auckland.
- Better lower-emission buses, that carry bikes, are accessible for people of all mobility levels, and have adequate handwashing and toilet facilities.
- An overnight train between Auckland and Wellington. Coordinated with ferry and a day time train between Picton and Dunedin, this would cut the Auckland to Dunedin travel time down to 24 hours, without missing out on any of the scenic South Island scenery.
- Evidence-based decision making by Government, acknowledging the environmental and regional access benefits of public transport, and Government’s role in coordinating the sector.
- Far safer walking and cycling amenity throughout the country, with smaller towns and cities geared up for bike hire and cycle tourism. This is needed so passengers can reach bus stops and train stations safely and also make holidays in smaller towns and cities without a car more feasible.
Safety is also an issue when considering domestic holidays by car or campervan. Our dangerous open road network should be improved before domestic tourism by vehicle is encouraged too much. NZTA is undertaking many open road safety improvement projects, but we could achieve a massive step up in safety from adjusting the default open road speed limits to be in line with Vision Zero.
For sustainability, these longer vehicle trips would ideally be in electric vehicles. Both electric car rental and electric campervan rental is available, which is handy both for people who have gone car-free in the city or who would like to try driving an electric vehicle on a holiday, before they buy their own.
Rotorua’s Inter-regional bus stop beside the i-Site. Image credit: Chris McKellar
There is already a push to open the borders again to enable tourism:
By June/July, Australians could be enjoying ski activities in Queenstown while New Zealanders enjoy some great deals on the wine trail in the Barossa Valley.
As shown in Hokkaido, restrictions shouldn’t be eased too soon. Some of the risks go well beyond public health risks from Covid itself. If slightly relaxing the border control results in the odd outbreak of the virus, it will create unease in the population around using any public transport and around having holidays domestically. The big losers could be:
- tourism operators trying to appeal to the domestic market,
- regional public transport operators like InterCity,
- public transport in urban areas, and therefore the entire modeshift strategy, thus:
- New Zealand’s overall climate response and modeshift plans.
The better alternative to opening up to international tourists early is to concentrate on domestic tourism and all the investments that would support it. Passenger rail and regional bus, environmental repair, cycling routes and safer local street networks throughout New Zealand. This would benefit all New Zealanders, including bringing lifestyle benefits and opportunities to tourism operators and their families.
The Northern Explorer. Image Credit: Chris McKellar
We have a clean slate for planning a better tourism industry. The taskforce to restart tourism should include experts in a number of fields:
- Social development
- Transport planning
- Climate change, including the Climate Commission
- Tourism-related local environment issues (such as the Environmental Defence Society who released a report yesterday called Tourism and Landscape Protection)
- Key stakeholders from passenger rail and inter-regional bus
And clearly, with his work already done to help inform good strategic and sustainable planning at this critical time, the Parliamentary Commissioner for the Environment should be involved.
International flights, before coronavirus and now: pic.twitter.com/aYzqQVqcDb
— ian bremmer (@ianbremmer) April 23, 2020
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If we’re serious about using trains as ways to get places for tourism, then they have to go places tourists want to go. Taupo, Coromandel, Tauranga.
As for freedom camping, may we write that off as a product of its time. There is no favourable argument for encouraging low-spend, large-footprint tourism anymore.
Was there ever a time for freedom camping? Was it ever sensible at significant cost to ratepayer/taxpayer to provide an environmentally unfriendly holiday option?
But I would like to know who is going to defecate on our beaches and areas of natural beauty now? Should we as New Zealanders try and fill the gap left by our friends from Europe? Do we need a roster? Or is it a rota? I have never been sure. I could get out to Muriwai some mornings.
I would offer to do this work from home, but I’m not sure the wife would be impressed.
“Freedom camping” was the result of NZ’s reputation as a cheap place for a holiday remaining while the actual price of a holiday in NZ increased.
Yes, it’s pretty gross. But shouldn’t some of the blame go to the accommodation owners who deliberately try and fleece tourists?
Tend to agree. The explosion in numbers of freedom campers has not been much benefit to NZ Inc. and created big issues for the tourist hotspots. But NZ is a very expensive country to travel around. Freedom camping can be a very sustainable, low footprint method of travel if managed and once you get over the bias against using private vehicles instead of public transport. They tend not to use a lot of resources (they don’t need their towels and sheets changed each day) and most are environmentally aware.
It seems to me that people are blaming the victims.
NZ’s been keen to take the tourism dollar, but not invest enough of that dollar taken in meeting the increasing demand.
Of course it’s easier to get nasty when they’re not the top-spenders. But people need to realise that these people are the bulk of the people wanting to visit NZ and who even know much about the place in the wider world. They might be close to skint early twenty-somethings. But in 2 decades time; they might well be cashed-up and willing to trade and invest-in NZ.
Daniel Eyre – I agree with your comment.
Eliminated in not eliminated – Freedom campers have the lowest financial return to the economy on average of $80.00 per day person on food and attractions. The next lowest is back packers at on average of $115.00 per day on accommodation, food and attractions.
And then you have got the motorhome association they have a lot of clout and they want freedom camping.So its not just tourists.
That view from the window of the Northern Explorer at Wiaouru: 100% total and complete environmental annihilation.
That needs sorting out as well as the way we travel.
What are you referring to? The electricity pylons? That’s not going to change. Or to the fact there’s no trees? That’s entirely natural. Not sure what you’re on about .
sorry. I thought you meant actual Waiouru (ie Desert Road etc). You mean grass? You want a war against grass? No sheep? No more farmers?
Good luck with that.
I assume he/she was referring to the fact that the native fauna has been converted to grazing land… …sometime in the late 19th century.
“Or to the fact there’s no trees? That’s entirely natural. ”
Quite how a clear felled rainforest is natural I’ve no idea.
“Far safer walking and cycling amenity throughout the country, with smaller towns and cities geared up for bike hire and cycle tourism.”
A few times I’ve tried to convince the family to go and have a break in some small towns in the top half of the N.I. where various great grandparents grew up. Then we looked at streetview. Some nice buildings but gee, the wide barren roads, trucks, few pedestrian crossings. We can do better.
Thanks for those graphs. Really interesting. The rise in emissions from ‘light trucks’! So many in Auckland are just silly fashion statements.
Napier is an interesting case – the Art Deco architecture has driven a boom in visitor numbers, many international, with much from the cruise ship trade. There’s no railway service connection for the public from north or south, nor is there likely to be, and who knows if anyone will ever want to take a cruise again. JetStar has stopped flying in NZ and AirNZ has intimated that their future network will not include Napier. Therefore: no planes, no ships, no trains, no international visitors: they’re really on their own there.
Napier/Hastings is one of the seven biggest urban areas in NZ, and it’s relatively isolated from the remaining six. I can’t see any future scenario where Air NZ doesn’t service Napier.
If the playing field was leveled Napier could well be connected to the south. I remember as a boy taking the train from Hastings and then connecting at Palmerston North to travel north. What if roads were priced to reflect their true cost with the implementation of a national tolling system? Yes, hard to imagine such a quantum change, but also hard to believe that regenerative farming might be gaining traction in NZ. Time are a changing. It is becoming increasingly obvious to many, as Fraggle suggests below, that much of NZ is paying a high price for rampant tourism.
I understand that the Napier /Gisborne line is being restored. The step beyond freight to have a passenger connection may then be achievable.
Air NZ will not drop Napier from the regional network. Napier/Hasting combined urban and semi urban population makes it 5th largest followed by Tauranga and Dunedin. Air NZ has 3 return daily services on Tues/Thu/Fri on its current Level 3 domestic timetable.
Why is it not likely that there would be a rail service? Wellington, Levin, Palmerston North, Hastings, Napier, Gisborne Covers almost a million people, would seem like a really good line for a rail service.
That is 1 I agree that should be restarted , also restart the old Southerner to Invercargill . And extend the Alpine service from Greymouth down the West Coast .
On KR’s web page the put a report out on the 18th March for a Feasibility Study as per this ;-
https://www.kiwirail.co.nz/assets/Hokitika-to-Westport-Tourist-Rail-Feasibility-Study.pdf
And if they get it up and running I sure as hell would love to do it .
And if they can set up a service via the SOL line that also would a good opportunity to use .
https://www.greystar.co.nz/news/lead/no-to-tourist-train/
Hasn’t tourism been pretty much a net loss to the country? It creates not just low-wage (and often seasonal/casual) employment, but it is in fact the lowest-wage industry we have. And it also increases the cost of living for residents, through higher rents and property prices (and higher cost of goods produced and sold through premises which have to pay those higher prices). Meanwhile it also imposes higher infrastructure costs. So, for most people, there’s a downward drag on wages combined with an uplift in expenses, meaning that wages adjusted for cost of living spiral ever lower (see OECD data). All at environmental and social cost and at the expense of more productive human endeavour. Apart from those with multiple properties, and some business owners/concession holders, it’s not good for NZ. So let’s find something more useful to do with our labour and enjoy the decreasing cost of living and the space for recreation.
Other industries certainly find themselves priced out if tourism takes over in a town, or simply pass their rising costs on to us.
Ever seen a full analysis of this, Fraggle?
No, just the pieces of the puzzle individually.
No, tourism has been a net gain for NZ. It’s basically NZ exporting a service. It’s not any export for a net loss.
All of those negative effects you cite are due to the governments of NZ failing to foresee them ( as usual: despite the well-documented experiences of other nations) and act in advance, not the fault of tourism itself.
I wonder if you’re old enough to remember the ’80s and ’90s and just how economically depressed New Zealand actually was?
“Hasn’t tourism been pretty much a net loss to the country?” simple answer is No. Yes, it has helped increase house prices to a ridiculous extent, but on the other hand, cities like Napier would have died a death without it. There is huge amount of wealth destruction in country areas without tourism potential.
Looking at the graph above it looks like international tourism is a relatively small part of the Hawkes Bay economy. The main reason Napier does well is it is in one of New Zealand’s best growing areas for horticulture.
Both right! Napier is the main tourism centre in the region, so may indeed suffer a bit, but Hawke’s Bay in general has it’s own extensive horticulture-based economy (from growing/labouring to manufacturing to agritech) that is accessible from Napier. Which is to say that the region and city are economically sustainable without tourism.
Some other regions and towns would make for better examples, AH. Mackenzie, Otago, West Coast, Fiordland. Hopefully more attractive to domestic tourists again, to lessen the impact. Who is thinking next holiday will be around the South Island instead of overseas? I might have skipped Tekapo based on the stories I’ve heard of over-tourism, but now it might be attractive again.
It’s an interesting one as it is definitely low-wage and seasonal. However, I think we will see very clearly have valuable tourism has been for the economy.
The loss of GST, income and company tax will have a significant impact on the countries coffers, while the government will be paying more in benefits at the same time.
There are other benefits from tourism as well, such as coming out from 12 days tramping the Dusky Track in Fiordland to the option of four different sailing times to get back across Lake Manapouri.
Don’t disagree with you, just providing some alternative observations.
Yes we will see the loss of tourism resulting in lots of job losses and economic pain now. It’ll be worse for having put so many eggs into that very breakable basket, rather than something more productive and sustainable and wealth-creating.
In my view the likely reduced property prices and rents should not be seen as wealth destruction, but as a reduction in living costs thereafter. Perhaps a rebalancing wealth transfer to the young and future generations.
Some of the tax losses may be offset by lower infrastructure expenses. It’s not cheap to upgrade sewerage systems.
Where we are now, it’s not looking very attractive to rebuilt international tourism. Perhaps it’s not even possible for a long time, even if we did think it was a good idea.
fraggle – Yes, the tourism industry up to the lock down is has been a net loss due to the ‘cramp them in’ supermarket tourism model that the country ended up using resulting in a low financial yield return to the country
For those who wish to use the Northern Explorer in conjunction with a cycling holiday, Kiwi Rail will only accept a maximum of 2 bikes per train in their roomy luggage Van . Easy win to change this ridiculous rule.
Have you written to them, Kerry? Every letter counts. 🙂
Great article. There’s also a global angle as many small countries, island countries, and developing states are even more exposed to international tourism than New Zealand. This has lead to global bodies (UN World Tourism Organisation and International Civil Aviation Organisation) being relentlessly pro-growth. Could New Zealand now shift and join the more environmentally-focussed nations?
Regarding this point, “To tip the balance towards more sustainable transport options, air ticket prices should be set to recoup the full costs of flying, including carbon emissions and keeping airports open.” – how likely is that to be recommended, when the industry is in freefall? Could ask the same question of all the other articles asking for a big shift to sustainability. There is a risk that the previously roadblocks will be even stronger now.
I like the comment “It’s hard to see which period on the graph we would consider ‘business-as-usual’.” BAU = continuous exponential growth with costs pushed onto the environment and future generations.
The tourism industry will rebuild itself but not to it former self, as the the national tourism infrastructure has a maximum capacity without damaging the environment of 2 million tourists (domestic and international) per year. Since the there has been little investment over the years, to restore to a sustainable environmentally friendly industry will cost $1-2 billion but the financial returns will be higher as the ‘new’ tourism industry will offering quality tourism products and services.
How did you determine it was 2 million?
Incidentally if it is a 50/50 split then that’s 1 million domestic visitors, which means we each get to have a holiday every five years, which isn’t very sustainable.
Its easy. NZ has15 unique geographical scenic regions over a land mass approximately similar size of Japan and Italy with nearly 300 tourism destinations which are predominately located around sparsely spaced small communities. Auckland, Rotorua, Mt Cook/Aorkari, Franz Joseph Glacier, Queenstown, Christchurch and Bay of Islands is not the only destinations that tourists will visit.
Out of NZ’s 16 regions, 9 regions do not have the population bases to pay for the necessary tourism infrastructure costs for that that tourism destination and the necessary roading upgrades to support tourism transport like buses, tour coaches, cars and campervans.
That still doesn’t explain how you came to determine it was 2 million visitors not 1 million or 3 million. Looks like you have just plucked a number out of thin air.
If we were to allocate even a portion of the $1.5 billion in GST raised from visitors per year to local councils we wouldn’t have an infrastructure issue. It’s simply been a choice of governments to pocket this money and leave councils to sort out infrastructure themselves.
jezza – International visitor/tourists arrivals to 31 Dec 19 was 3,888,473. Queenstown as NZ largest destination for tourists to go to due to unique scenic beauty, had already reach its maximum capacity to point the town was grossly overcrowd with tourists in an confined physically restraining environment. The similar issues where along in the major tourism routes like Mt Cook/Aoraki, Franz Joseph and lessor extent Foc Glacier, Kaikoura, Bay of Islands. Tongariro National Park, Wanaka, etc.
In 2009 when international visitor/tourist arrivals was 2,458,328, Queenstown was experiencing over crowding and the warning bells where ringing in other major major tourism destinations.
In the space of 10 years there has been an increase of 1,430,145 international visitor/tourist arrivals will very little investment into the national tourism infrastructure.
This why 2 million is the upper limited for international visitor/tourist arrivals to protect the environment and reduce pollution create by the fossil fuel self drive travel which which has became rampant to due the perception that NZ is small country that you could drive from Auckland (NZ’s only large city) to Queenstown in 1-2days.
If the COVID hadn’t killed the tourism golden goose, mass uncontrolled tourism would have. NZ upper to the boarder lock was getting a reputation of mass tourism image, bad tourism infrastructure and expensive destination to visit.
“Queenstown as NZ largest destination for tourists to go to due to unique scenic beauty, had already reach its maximum capacity to point the town was grossly overcrowd with tourists in an confined physically restraining environment. ”
I last went to Queenstown in 2014 during the Aussie winter school holidays, and New Zealand tertiary holdays which I understand to be the busiest time of year in Queenstown. I was surprised by how *empty* it was, not how full. Queenstown is nowhere near at capacity for tourism, most of the hotels aren’t even mid-rise!
You stated that total tourism in 2009 was 2 million visitors and that no infrastructure expoansion has occurred since them, yet you haven’t proven that capacity was fully utilised or that additional capacity couldn’t be provided.
If you believe that there is an actual capacity constraint can you spell it ot please because it seems like you just feel that NZ’s tourist destinations are too crowded for your liking.
Sailor Boy – NZ tourism capacity issues is from Mid October to early April.
The 150km Otago Rail Trail has been a success. Would there be a demand now for longer and more varied trails, maybe a complete network? Perhaps e-bikes + low-carbon tourism could be the trigger.
Agree. What you are describing is already starting to happen, you can now cycle from Alexandra to Lawrence on two trails that connect with the original rail trail. A track is also being built from Alexandra through to Queenstown.
It was one of the successes of the Key government, hopefully we continue to build on it.
We should 100% be trying to connect the network up. A truly National cycling network connecting all of our cities would be awesome for domestic and international tourists.
Not sure I would want to start my holiday with 24 hours on a train….. or even worse finish it with 24 hours on a train. Probably need another day of leave to recover. Taking a scenic trip by train is a great way to travel, but needs to be fast for general get from A to B stuff. So flying really is the most practical and cheapest way.
How much of the domestic tourism spend is actual tourism and not spend by business? i.e. flights, accom, etc. Would be good to see the breakdown.
Now that people have “discovered” the benefits of video conferencing I suspect a big drop in domestic travel for business. This will kill many motels etc that rely on business spend which is usually not cost-conscious.
The main people still flying will be public “servants” as cost is not a consideration and they don’t need to justify travel time.
Agree, regarding the train. Any Auckland to the lower South Island trip is still likely to be done by flying.
Not sure about business travel though, the value of face-to-face contact can’t be underestimated. Many business have used video tech for years but still physical travel for some meetings.
Your way off the mark for government travel, cost has long been a consideration, and Skype etc has been the most common method for intercity meetings for years.
Many people will agree with you about the flying, Stu. And having an occasional holiday by plane isn’t going to break your carbon footprint unless you also plan high-carbon activities on the trip and have a generally high-carbon lifestyle.
But anyone who flies shouldn’t expect tax payer subsidies to the airline and ratepayer subsidies to the airport.
If we’re given a choice as a country about how to use our money to assist the economy, it is unlikely to be to subsidise aviation to the level it been receiving.
But anyone who travels for leisure or work shouldn’t expect tax payer subsidies or ratepayer subsidies.
Fixed that for you.
Every time you leave your front door you are getting some form of tax payer / rate payer subsidy. Of course most of us are tax payers and rate payers (directly or indirectly). Some of us just contribute more than we get back.
That’s not real true though Stu.
You can see this in the fact that the first part of your statement contradicts the second part.
Would be interested to hear what subsidies you think airlines and airports get? And if they shouldn’t get those subsidies, why should rail get subsidized – which would surely be needed to funded any new services?
I suspect you will be wrong re it is unlikely to be aviation receiving assistance.
Aviation doesn’t pay any carbon taxes. Local bodies providing roading infrastructure connections to airports, and Wellington City Council has shares in the airport authority, and I understand has contributed to airport expansion. Mayor Andy Foster supports a second Mt Victoria road tunnel with main justification faster access to the airport.
As one subsidy, if one books an international flight any internal flight within NZ does not attract GST. Nor does the international leg. Yet a bus trip on the same internal route does. No carbon taxes/ETS on international flights. There are some regional airports that have had direct government funding, the latest being Taupo airport through the Provincial Growth Fund early this year.
Outside of the big three airports, all of them are propped up in some way by the local council and some by the government as well.
Air NZ gets a bailout about every 20 years from the taxpayer.
Yes, these are some of the different subsidies that aviation gets. Also:
All transport modes use carbon; even the building of a footpath involves carbon use. So not having to pay the full cost of the damage done by the carbon used is a subsidy that applies to all transport modes. However, different modes use different amounts of carbon, and therefore the subsidy that is currently being paid while we don’t price carbon properly, is different.
Now throw into the mix the differences in speed, which is of course an incentive to fly. The subsidies to flying puts the incentive to take the faster mode on steroids. The natural dampening mechanism to prevent overuse of the higher-carbon faster mode (cost of that carbon) is removed. Hence the increase in flying we’ve seen.
If there was no subsidy to any of the modes, there’d be less flying and there’d be more demand for rail. But here are some reasons why subsidies to rail at this point in time are to be recommended even as the subsidies to aviation are removed:
1. The historical underinvestment over the years when aviation and roading was favoured over rail needs to be fixed. That’s a handicap the rail system should not have to carry forward any longer.
2. Electrification of transport changes the situation – it allows any mode to have a lower carbon cost. With rail, that technology is here. With aviation, it is not. We have time, with rail, to implement a low-carbon network within the timeframe that we must act. We do not have time with aviation.
3. The benefits of rail investment extend to both freight and to road safety. Getting those trucks and some cars off the road will have enormous benefits.
I often include trains as part of our family holidays. 24 hours on a train is not the same as 24 hours on a plane or a bus. For one the seats have more space. We often get a block of four with a shared table. So then it’s possible to play cards as you watch the secenary go by. Which is one of the reasons I prefer train travel over flying, you actually get to see the land you are travelling through. Also it’s considered normal to get up and walk around.
The seats in the long distance trains over in America are like recliner armchairs. Even without a sleeper it wasn’t that much of a hardship to do Los Angeles to New York via Orlando by train, with a few breaks to explore different cities on the way. I certainly didn’t get off train at any stage feeling like I needed a day to recover, so much so that the next time we travelled to USA we did the reverse trip via Chiago.
Having experienced European, North American and New Zealand’s train I certainly think it is an option that more people should try. Even if it is only one way and you fly home at the end of your holidays. Yes some of the legs were much longer than just 24 hours.
The other thing is Just because the length of time to go from the start to the very end may be longer than some would like to spend getting to the destination doesn’t mean it isn’t the better option for people getting on part way down the line and making short trips. I visit my father in Palmerston North and sometimes find it cheaper to fly into Wellington and take the train to PN at the end of the day, having had a day sightseeing.
Fantastic review of the impact of tourism. The overnight sleeper train between Wellington and Auckland has to be a win win situation, both for business trips and for a trip north or south. We have subsidised aviation for too long (no carbon taxes) – why not start the overnight express by transferring the subsidy to long distance trains?
Thanks, Paul.
Down with yield management on Intercity buses and trains. If your on holiday you want to be spontaneous and go with the flow the last thing you want is to be hit with a day of travel fare. That’s why people take their cars because you can easily factor what your travel will cost you. Intercity buses and Kiwirail need to be forced to have transparent pricing just like the good old days in the 1960’s and 70’s. Turn up and go with a fixed price if they run out of seats well go tomorrow.
Likewise daily internet rates at hotels. NZD25?
Even motels have it free, with an accommodation price that doesn’t indicate they are subtly gouging for it.
Agree, as long as they can increase capacity sufficiently at peak times. Otherwise all you do is transfer the uncertainty from how much will it cost to will I even be able to get on board. I’d take the former over the latter personally.
Back in the day NZR used to run extra trains and buses around Christmas Easter Rugby matches etc. Just add extra carriages buses etc. What about emergency travel people don’t think twice about running a child or student from Auckland to Tauranga or Roturua in their car when the need arises they know its not worth even bothering to look at the Intercity website for same or next day travel.
It’s reasonably easy to add extra carriages to trains. However, someone has to pay the cost of having extra buses waiting just for Christmas and Easter. In addition I’m not sure how many spare bus drivers there are, they’re in short supply at the best of times.
School buses and bus drivers don’t have work at holiday time, Jezza. This is not an insurmountable problem, it just takes planning. The alternative is supersizing our highways, which induces traffic the rest of the time, or suppressing the desire to have a holiday when people have time off work.
Have you seen the state of the nations fleet of school buses? I wouldn’t want to be in one of them for a few hours!
I agree it’s not insurmountable, but there would definitely be costs involved. Probably cheaper than the cost of keeping thousands of cars doing nothing though.
I think Royce raises a valid point, although I think it would still need some sort of demand pricing for long weekends. Maybe a set peak rate though rather than based on when and whether you book.
Indeed – maybe putting adults on them occasionally would whip up some action on that front, too! 🙂
“It’s reasonably easy to add extra carriages to trains” – yes, but only if you’ve got them. Train carriages are not cheap, and they need pretty intensive utilisation to justify the expenditure. No-one is going to fund carriages that are used only at peak times (except for urban transport).
And school buses aren’t used at holiday times, but they’re generally just urban buses. It’s hard to see why people would be prepared to travel longish distances in them when other options (cars, planes) have much greater comfort and luggage-carrying ability.
It is in fact hard to add suitable capacity at busy times, which is one of the reasons yield management exists. At peak times demand will exceed supply, so there has to be some sort of rationing process. Yield management does it by price, fixed pricing does it by how far in advance you book.
Whichever, public transport always has difficulty in supplying long-distance travel at peak times, but it’s not alone in that: just look at motorway queues at holiday weekends.
Mike – I agree that there has to be some sort of peak rates, that doesn’t mean there has to be a yield management system though.
NZR used to have no problem putting on extra trains during holiday periods. It’s obvious that there are extra costs involved with this, but they are clearly not insurmountable.
jezza:
* peak fares are a simple and rather crude form of yield management – it’s a matter of degree rather than one of principle;
* a major extra cost of providing extra capacity at peaks is the cost of the additional rolling stock. If such suitable stock exists, that cost is marginal. But if that stock doesn’t exist (and it doesn’t) the extra cost is the full cost of acquiring additional stock for use just at peak times. That cost would be very hard to justify for peaks in leisure travel.
Extra carriages would have to have other purposes other than just holiday peak times. Can you think of any, Mike, such as the ability to be constantly maintaining the carriages without huge cost by keeping a small team employed working on maintenance of one at a time?
Good question, Heidi. Rail operators size their fleets according to the capacity needed to meet the agreed timetable, then add extra capacity to take account of maintenance (which will happen at slack times) and the need for spares to cover out-of-course incidents like breakdowns. Maintenance may be able to be tweaked to get a bit more capacity at peak times, but that will tend to incur costs and risks.
The general principle is that rolling stock only earns its keep if its moving, so maximising utilisation while ensuring stock gets maintained and that there is enough spare capacity to ensure target reliability is the key.
In the times when there was sufficient stock to run Christmas/Easter etc holiday specials there were a few things that were different from now, such as:
* the lack of suitable alternatives to rail: cars were fewer and less reliable and the roads not so good, and air travel was expensive and slower than now;
* the railway was run more as a social service, with less commercial pressure than now;
* there was much greater provision of rolling stock (just look at old photos of car yards in the main centres), so extra stock was more readily available;
* the lack of competition meant that suburban rolling stock, not being used at peak holiday times, was acceptable on longer-distance trains (and all rolling stock was owned and controlled by the same body, not divided multiple ways as now).
Whether we like it or not, none of these factors apply any more: the days of holiday extra trains are gone, and spontaneous unbooked turn-up-and-go travel at holiday peaks is no longer possible on a railway like ours. At those times booking in advance to match supply and demand is essential, and some form of yield management is an effective way of encouraging people to do that.
The solution to this is to nationalise the network. Make intercity a contracted operator.
Overall its a tough one, there are going to be losers.
Price everything (environmental impact) and drop the subsidies and only rich will be able to afford it. That will mean some businesses go bust, and some communities die. The fruit industry has no one to pay slave wages to, so that impacts exports (I have no sympathy for the latter, BTW).
I agree with investing in the rail network – high speed, where possible – which would be for tourism as well as commuting. But realistically its only going to be along the spine of the country with a few spurs. How to reach the far flung communities? Vans have filled that void for international tourists but I don’t know how you stop freedom camping without massive administrative cost.
My guess is you invest in the infrastructure, go hard out promoting domestic (and inbound Australian) tourism. Then hit anyone else with a big levy to ensure only the big spenders can come and then wind it back from there as you have some visibility over what happens. But the tourism industry will never accept levies, and that includes Air NZ who are going to have a say in all of this (and a massive conflict of interest if we really are targeting “sustainable tourism”).
I’m not sure levies really solve anything other than raising a bit of revenue. They charge people the same rate no matter how long they are here for, which incentivises long stays, something back packers and freedom campers are associated with. They also hit people travelling for weddings, funerals and other family events unnecessarily.
Levies can be a daily rate. But there is a point to a lump sum – if you’re coming from overseas, that is a lot of carbon to burn. That’s a big cost to load onto the world for a short trip. So incentives to stay a while aren’t a bad thing. It’s a far more respectful way to treat our planet.
What is so annoying about the freedom camping thing is that most people would expect to pay a daily charge for camping somewhere. To pay all the other costs of getting here and then expect to camp for free would be unusual.
Who’d keep running a camping ground if people can just camp for free elsewhere? By requiring people to camp in proper sites, travellers can pay local operators to maintain facilities, which provides some livelihoods and keeps the environment from being trashed. Win win win.
First freedom campers are paying a daily fee in the cost of hiring their vehicle.
Secondly the reason why some people will pay to stay at a camping ground is because of the extra services they provide. Somewhere to plug in, hot showers and proper toilets.
Which brings us to the price that some camping grouds charge. Rakaia holiday park per night for two adults powered and tent sites is $42. I would expect that in more touristy areas that would be higher again. So you could expect for a two week holiday to spend easily $700 on top of the thousands you have already spent on fully self contained camper.
I think that what needs tightening up on is the cheaper ‘self contained’ campers where the toilet is hidden un the bed that needs to be moved before using it. Plus I would love to hear that the rumour that tourists save $200 by not using the provided chemical toilet was untrue.
It was more the approach of costing it so only a (relative) few would come and those would be the high spenders with a (perhaps) lower environmental footprint (don’t use campervans, don’t sh!t on beaches…). So you’d be revenue neutral.
But it was only a stab in the dark. Its such a complex issue, let alone the levers to use.
There should be a frequent and affordable rail service from Auckland to Hamilton, Rotorua, Tauranga and other locations. If more inner city residents are managing everyday life without a car they also need public transport options that will enable them to travel out of town to visit relatives and to go on holiday without needing a car. Such services are also more likely to be profitable than longer distance trains.
I think rail in the Golden Triangle will happen (not sure about Rotorua but I guess its a small diversion).
The Regional Rail project is starting and while everyone talks about Hamilton Central to Britomart, 95% of people probably aren’t going to take anywhere near that length of trip. I see most people travelling within the Waikato and to the end of the Southern Line. From there, an extension through to Tauranga would be inevitable.
Not sure if it stack up anywhere else other than Wellington. Christchurch would seem a prime candidate but Gerry Brownlee did all he could to kill that dream there, after the earthquake.
The same logic applies to a north island spine network though. Most people won’t go Aucklandto Wellington, but 10 stops with 10 people making a trip between every pair is still 500 passengers. You’d be targetting trips like Palmerston North or Hamilton to the Central Plateau or small towns to their nearest big city.
Oh, totally agree.
It just needs to be fast(ish) and frequent.
Exactly, I’m imagining somewhere around 10 hours total to start with which is broadly comparable to driving. Would need to be at least 3 departures each day each way, probably 8am 6pm and midnight. Then you get morning and evening departures at most destinations and the overnight service arrives for the start of the business day in PN, Hamilton, Auckland, and Wellington. If the trip is reliably under 10 hours you could do it with two day trains and two overnight trains.
It’s possible that long distance passenger rail in NZ has now finished. It’s difficult to see how the Auckland-Wellington, Picton-Christchurch and Christchurch-Greymouth trains could ever make a return as the tourist numbers are unlikely to rebound to where they were in much less than a decade.
The topic of having long distance passenger services for domestic travel is purely academic, as New Zealand has no mechanism to make such trains viable.
There are two methods for operating long distance passenger trains.
One is to pay KiwiRail twice as much as should be needed, so they can produce a profit not just for the train, but also for their freight division. We see this in the proposed Hamilton train, where ratepayers and taxpayers will be required to subsidize freight trains in addition to the commuter trains. This approach will collapse after the next change in government, as that government isn’t going to tollerate taxpayer and ratepayer subsidies for a freight company under the guise of running a commuter train.
The other is make passengers pay twice as much as it costs to run the train, again so that freight can profit as well, by way of targeting tourists willing to pay $300+ for a train ride. This approach has now collapsed, due to COVID-19, and the trains are unlikely to run again in the foreseeable future.
So, we need a new approach. It will need start-up capital, so my suggestion would be for the government to start a New Zealand version of Amtrak, independent of KiwiRail, that only needs to cover its own running costs, free of a requirement to produce profit for a freight business that has nothing to do with moving people around the country.
The government owns 100 % of Kiwirail, they could change it’s structure to whatever suits them if they want. Why create a new entity?
That is a typical neoliberal comment. Re-establishing regional and inter-regional rail across the 14 regions that has rail track can happen as part of a ‘turn up & travel’ integrated bus, travel and ferry national public transport network that can cater for locals and tourists alike.
“That is a typical neoliberal comment”
Kris, whose comment? If you mean mine, I’ve merely described the existing situation in NZ. It’s isn’t neoliberal or anything else, as it isn’t a viewpoint. It’s a statement of fact.
jezza, the current government have already stated they don’t intend to change the structure of KiwiRail into a non-commercial business, thus I haven’t included that option.
Kris – how on earth is suggesting the government takes more control of Kiwirail a typical neo-liberal comment?
Geoff – I suspect if the government was asked whether they were considering creating a separate passenger rail entity the answer would also be no.
“…so my suggestion would be for the government to start a New Zealand version of Amtrak, independent of KiwiRail, that only needs to cover its own running costs, free of a requirement to produce profit for a freight business that has nothing to do with moving people around the country.:
Price road freight properly and freight by rail will look after itself.
“Price road freight properly” – indeed, including externalities, the cost of a safety regime that’s as stringent as the one imposed on the railway, and (particularly) a realistic carbon price.
“It’s difficult to see how the Auckland-Wellington, Picton-Christchurch and Christchurch-Greymouth trains could ever make a return as the tourist numbers are unlikely to rebound to where they were in much less than a decade.”
Why is it difficult to see that? Over 2.5m people live along the rail corridor from Auckland to Wellington. Are you seriously suggesting that that many people can’t support a regular rail service?
“Over 2.5m people live along the rail corridor from Auckland to Wellington. Are you seriously suggesting that that many people can’t support a regular rail service?”
Under which method of operation are you referring to? The one where tickets are priced at $300 targeting tourists, in order to pay a profit to KiwiRail’s freight business on top of the profit for the passenger business? Or the one where ratepayers and taxpayers pay a very large subsidy to KiwiRail to pay a profit to KiwiRail’s freight business on top of the profit for the passenger business?
Why do you think a full seven carriage Capital Connection is still a loss-maker? It doesn’t actually matter how many passengers you have, the arrangement KiwiRail currently has will make eighter high ticket prices or council subsidies a requirement regardless, due to that requirement to make a profit on top of a profit.
KiwiRail’s strategy is to prevent their passenger division from having their own locomotives and drivers. These are to be hired from their freight division at a minimum cost of $3000 per day.
So IMO we need a new passenger-orientated and dedicated business, with its own trains, locomotives and drivers. That better cost control will keep the opex to a minimum, making fares more affordable for a domestic market.
“Under which method of operation are you referring to?”
A sensible on where we treat the rail network like the road network and inter-regional passenger transport is treated as a network with contracted operators and unified ticketing. I completely agree that the current system of funding/operation/maintenance is broken.
“Why do you think a full seven carriage Capital Connection is still a loss-maker?”
You have train from Palmerston North to Wellington early morning which works fine if you are going for a day in the office. Then one train return in the evening, again aimed at office workers. Nothing during the day or the weekend.
There are reduced services at the moment but I have looked at the train service from Masterton to Wellington in the past and it is much different. No branding for one and is just treated as another part of the overall commuter network. More than one train into Wellington each day, as well as return services during the day. So it is possible for example to head into central Wellington and make a verbile submission to a subcommitte without having to be in Wellington for the whole day, including early start.
The drive from Palmerston North, station to station, is only 15 minutes faster than the drive (according to google maps if I left now). So the whole it takes too long arguement doesn’t work here. There just isn’t enough flexiblity in the timetable for many options other than those working full time in Wellington.
I can’t imagine there would be that many wanting to commute every day to make the service break even which is why having more trips and making it more attrative to a wider percentage of the population is needed.
When I studied in Wellington I used to use the service to go home for the weekend. I still use it occasionaly as plane trips can end up cheaper for me flying into Wellington than Palmerston North. Enough of a difference that I still save money by taking the train.
Geof we have gone over this a 100 times in the past and I agree Kiwirail is subsidising its freight operation by overcharging passenger services this probably even happened in the past when we had the NZR which was a government department so I can’t see how an Amtrack structure would solve the problem. The only thing to solve it would be a not for profit network owner and a not for profit passenger train operate and a whole heap of accountants and lawyers to scrutinise the books to make sure that network costs are fairly allocated between passenger and freight companies. I don’t know if it would be worth it though. Maybe an independent network regulator like we have with the electricity network but even then we are paying over the odds for our power.
That is why NZ needs to have a cost recovery national public transport agency to plan, fund and procure ‘turn up & travel’ integrated bus, travel and ferry national public transport network using an ‘open’ national ‘tap & travel’ payment/ticketing system, catering for locals and tourists alike supplement by one or two ‘book & travel’ inter-regional and long distance coach, scenic coach and ferry services and a long distance passenger train service.
I don’t think a regulator would help Royce, as what KiwiRail does is considered normal business. It has its origins from about 2004 when Toll decided they didn’t want to allocate locomotives and drivers to the overnight Northerner when the same locomotives and drivers could earn more revenue on freight trains instead. That’s completely understandable, and I think if it were my business I would come to the same conclusion.
KiwiRail’s view is essentially the same. They won’t allocate locomotives and drivers to passenger trains if the revenue earned is significantly less than if they were used on freight trains instead.
The difference is that unlike Toll, who chose to exit passenger operations, KiwiRail instead ensures the passenger trains generate revenue comparable to a freight train by way of requiring passenger to hire locos and drivers from freight at a high commercial charge. This in turn is paid for either by tourists paying high fares, or councils paying a high subsidy.
The only viable future for passenger rail is to set up a dedicated passenger rail company independent of freight operators (currently only KiwiRail).
Some points:
* Toll didn’t choose to exit passenger operations, in fact rather the opposite: they increased their stake in the passenger market, buying back the 50% of Tranz Scenic that Tranz Rail had sold;
* train fares are set by what the market will bear, not by the costs of the operation (though obviously that’s very desirable);
* whatever internal transfer pricing regime KiwiRail may have in place does not affect the cost to KiwiRail of providing the service;
* hiving the passenger business off would probably increase costs through the resulting reduction in flexibility and integration.
Half digested all this post and comments but agree we need to move things along to price travel modes & choices etc to properly reflect their cost on society and the environment.
In a Newsroom article the Minister for Tourism was asked about the current taskforce and whether it is considering climate change. His response is depressing. ‘Davis says: “It’s not part of the discussion.” He’s also adamant the country doesn’t have too many visitors.’’
Unfortunately, Kelvin Davis is listening to a die hard group within the tourism industry who wants to have 5 million tourists by 2023/24 which includes 1 million Chinese tourists, to expand Queenstown or Wanaka airports to increase tourists to an already over crowded Queenstown and Southern Lakes region and Mt Cook/Aoraki national park using predominantly fossil fueled rental cars and campervans as the means of transport.
Since the COVID killed the tourism golden goose, at least it was better than the slow death of mass uncontrolled tourism, as NZ was getting a reputation of mass tourism destination with bad tourism infrastructure and an expensive destination to visit.
Tourism is a fickle luxury non-essential leisure industry, that is predominantly consists of small to medium service service based businesses employing low wage staff and is at the whim of any global financial and/or health upheaval especially if it is a major source of income for a country’s GDP.
Since the planet is slowly warming, global tourism is going to be heavily impacted by the effects of a warming planet like unpredictable destructive storms, droughts, severe air turbulence disrupting global passenger air travel, health pandemics, global economic swings, etc,
So as NZ rebuild its tourism industry it needs to be sustainable environmentally friendly not exceeding 2 million (2002 tourism figures) tourists per year, offering quality tourism products and services, generating a better financial return than previously, yet not to be a major income earner as it was prior to the COVID-19 lock down.