Yoda.
I'm Chelsea Daniels and this is the Front Page, a daily podcast presented by the New Zealand Herald. The government wants to see tourism numbers increase as part of its economic growth push. As part of that push, the existing visitor visa scheme will be tweaked to include welcoming in digital nomads that'll allow tourists from visa waiver countries up to nine months to travel around New Zealand while still working.
For their overseas employer.
The scheme has already been greeted with expressions of interest from overseas, but the introduction of digital nomad visas in some countries has contributed to local backlash against tourists. We'll hear more about how the scheme is working in Spain from journalists their Marta Balcelles, but first today on the Front Page, Strategic director of the Hotel Council Altieroa, James Dillon joins us to discuss the state.
Of tourism in New Zealand.
James figures from Tourism New Zealand show that tourist arrivals from all countries remains at eighty six point three percent of pre COVID levels.
Why do you think this number has struggled to move.
It's a complicated problem to unpick. But as soon as we closed our international boarders as a result of the battle against COVID, it was always going to be a marathon, not a sprint, and Hotel Council Al tier Roh has said there would not be a v shaped recovery. So winning tourists back to New Zealand, attracting them here involves a number of different interventions that all need to be made.
Frankly speaking, New Zealand probably hasn't done enough to lay out the welcome Matt and huss It's hard to get tourists back here after we closed.
Our borders, right, so what do we need to do.
We can look overseas at some of the initiatives that have been carried out by other countries and we can ask ourselves whether those would work in New Zealand and implement some of them. To be honest, I mean, call me Captain obvious, but if you shut down business, and that's what we did with international tourism, then you probably have to dial up marketing to win back that business
when you reopen. So ten years ago New Zealand's national tourism marketing body, that's Tourism New Zealand, had about one hundred and ten million New Zealand dollars to spend on international marketing. Fast forward to today and that number has actually gone down a little bit. It's about one hundred million today. Meanwhile, we've had huge inflation and the New Zealand dollar has weakened by about twenty five percent against
the US. So in summary, over a decade, despite the minor inconvenience of a global pandemic, we've actually reduced our investment in attracting people to New Zealand for a holiday, for business and for other reasons.
Are you pleased with the government's focus now on trying to increase tourism numbers and bringing in this digital nomad scheme.
Yeah? Absolutely, because it is one hundred percent the right thing to do. In the hotel industry, we have two factors we look at when you're looking at performance all the time, and it makes logical sense, but it's worth talking through for your listeners. Again, when you're trying to maximize returns at our hotel, you need to get the right mix of occupancy. That's the percentage of rooms that
are filled and room rate. There's no point being one hundred percent filled if you're only charging ten dollars a night. There's no point charging ten thousand dollars a night and not selling any rooms. You've got to maximize that those two factors. Now, the strongest position is to sort out occupancy first and then you can drive rate and that
makes logical sense the laws of supply and demand. So New Zealanders, as you said, at the outset, we're hovering around eighty six percent of pre COVID international visitor arrivals. In reality, we need to get ourselves to one hundred and twenty or one hundred and thirty percent of pre COVID visitor arrivals. And that's because we've built new hotels and open new hotels. We've built new bars and restaurants.
We've built three big convention centers, and to be at par we need to be about one hundred and thirty percent of pre COVID visitor arrivals.
Yeah, I remember the Labor government had a big focus on that higher end tourism, those who would come here and spend big rather than travel on the cheap Stewart Nash was quite anti freedom campers from memory for a while, there was that the wrong approach. Do you think or do you think that's contributed to us struggling recovery that switch.
I think there was some unfortunate consequences of phrasing it that way. You know, high value, low volume. I don't think that's a sensible phrase at all. Every business tries to maximize returns, and hotels, for example, are dynamically priced, meaning that the price changes depending on demand every day. No hotel intentionally leaves money on the table. But New Zealand is not a cheap destination to travel to. We're
a long flight away. Our domestic airfares certainly aren't cheap at the moment, and no traveler to New Zealand, no international visitor, is kind of low value. People backpacking and camping around the country spend money throughout our regions and that's an incredibly valuable thing. So solving tourism growing demand,
the key issues have always been seasonality and dispersal. Seasonality, we've got hotels, particularly in winter, that are emptier than they should be, and airports that are emptier than they should be, and convention centers that are emptier than they should be, so we need to do more to drive people to come to New Zealand in the shoulder seasons and low seasons. That seasonality disperse is moving people around the country. We don't just want people going to Queenstown.
So let's focus more on our emptier city centers. Let's drive people into Auckland, Wellington and other urban centers because New Zealanders would be delighted to have those urban centers busy with tourists.
Visiting New Zealand just got more expensive. The government announced Tuesday it will nearly triple entry fees for tourists to one hundred New Zealand dollars or sixty two dollars twenty US. Authorities argued it would ensure visitors contributed to public services and high quality experiences while visiting the country. Matt Doosey is the New Zealand Minister for Tourism and Hospitality.
What we want to do is shift some of the costs from the taxpayer to the visitor, and ultimately what we want to do is grow tourism. We've got an ambitious target to double our exports as a country over the next ten years.
And tourists now have to pay one hundred bucks at the border. That made international headlines.
Do you reckon? That's a bit off putting.
Again, the timing of that announcement when other countries were reducing visa costs or introducing visa free travel, that perhaps could have been better, But that decision has been made. Now the key issue is how do we use that one hundred dollars per international traveler to help the tourist industry and the New Zealand economy recover as fast as possible. And again, the reason for wanting more tourists in is because tourists massively overcontribute in tax that they pay relative
to what they use. All the GST they pay on all the spending they do in New Zealand is way more than the amount of money that gets reinvested back into tourists. So the IVL at one hundred New Zealand dollars for many international travelers is not out of line with some other countries. So how do we use that one hundred New Zealand dollars IVL to attract more international tourists back to New Zealand quickly so we can fill up our bars, our restaurants, our retailers and our shops
that rely on free spending international travelers. Now that messaging we're getting out of the government now is a willingness to really dial those efforts up. And that's a very very good thing.
So what's best case scenario here, What like an international campaign to get people to Gore or something.
Well, I'm sure the good folk of Gore would love more international travelers coming to their spot. International campaigns are certainly part of it. But remember I talked about seasonality and dispersal, and that opens up the idea of what tourism experts called mice meetings, incentives, conventions and exhibitions. A tourist to New Zealand is not just a backpacker or someone hiking through our national parks. If you have three thousand Chinese Amway executives in the CBD of Auckland, those
three thousand people are tourists as well. So some of this can be a specific campaign to drive more Australians to New Zealand quickly, because Australia is a market that hasn't fully recovered yet. That is one intervention we could
do now to help tourism. But we could also look at, say three fairly new international standard convention centers, and we could think deeply about how we activate those three wonderful urban assets in the long term to make sure New Zealand also has an outstanding reputation for mice rather than just an outstanding reputation for the beauty of our landscapes.
When it comes to the digital nomad visa, there are places overseas that have seen like cultural shifts, you know, corner stores turning into generic coffee shops, that kind of thing. I guess we're in a bit of a different situation here in New Zealand. Hey, the cultural diversity in Auckland, for example, I bet won't be as impacted as the one in a tiny town in the Spanish Alps for example.
Hey, look, I agree with you, and I think also the nomad visa was kind of filling a hole. I think it started with a YouTuber who put out a positive tweet about New Zealand. And of course the YouTuber gets gets paid for their podcast appearance, unlike hotel company executives like me. But yeah, you know, he put out a podcast and that was technically a breach of his visa conditions. So I think what they've done is they've said, hey,
that kind of thing is okay. In Spain. As I understand it, there were tax advantages to be on this separate visa called a digital nomad visa, and you could stay for up to five years. New Zealand's not doing that. We're just clarifying that people who are on visitor visas in New Zealand can pull out the laptop and do some work. And I think that's clearly a good thing, but it's not going to fill the gap and demand
some of these other interventions. You and I talked about what's needed to move us from eighty seven percent of pre COVID visitor arrivals two one hundred and thirty hotels today in New Zealand are about ten points of occupancy, ten percentage points emptier than they should be. And there are about thirty five thousand hotel rooms in New Zealand. So that's just hotels, that's not motels and short term
rental accommodation. And so you know, ten percentage points emptier than they should be means three and a half thousand more tourists we could easily handle, or ten Boeing aircraft could could be handled very very comfortably with the existing hotels.
Thanks for joining us, James.
You're very welcome. Thanks a lot.
Justin.
We're now joined from Barcelona by freelance writer Marta Bufsels to discuss how tourism and digital nomads have been leaving a trail of issues across the country. When did this backlash over the I guess over tourism start in Barcelona because it feels like it's been going on there for quite some time now.
Yeah, it's been going on for about a decade probably, but the real huge backlash we're seeing now started around the pandemic, or it increased with the pandemic, because well, I should say, obviously tourism stopped in twenty twenty and with all the lockdowns, but then afterwards when things opened up, it sky rocketed and they saw record numbers. The pressure is felt in several specific places in Spain and not
in others. And I live in Barcelona, which is the example I know best, and it's you know, where I grew up as well, and I've seen the absolutely huge difference over the decades. It's a city that cannot cope with the mass tourism it's been getting. It was a problem, you know, ten years ago, but since twenty twenty one, twenty twenty two, it's been really extreme.
It causes a lot of problems.
And then the digital nomad situation was probably you know, the cherry on top or just the thing that made rage spill over.
Yeah, how drastically has the city changed as a result of all of this tourism and the digital nomad visa very drastically.
I think the biggest impact has been on housing because it's not a big city, it doesn't have room to grow, and it was already very very dense. One of the dnsists in Europe, and rents have increased sixty percent in a decade, and salaries, of course have not increased. In fact, there's huge inflation and you know, the cost of living
has risen for everybody. But tourism was an issue, and well, not tourism, over tourism, mass tourism, airbnb sort of gentrification, which is a you know, is an issue in many many cities around the world, but here it's a bit of a pressure cooker in the sense that there isn't that much housing. The salaries that digital nos tend to have are very very high, and they pay twice three times what you know what an already expensive rent literally three years ago. They work for wealthier sort of for
wealthy companies, for wealthier economies. They already arrived with a really huge income that doesn't compare to most people in the city. So it's a case of extreme gentrification, and it's a case of locals feeling like they're being pushed out. There's a huge protest going on right now around an eviction.
That is planned.
An investment fund bought an entire building, and little by little, when you know, when when people's rent expired, they evicted them, and they're trying to just make a lot of money from from just renting these flats for you know, five times what the rents used to be, and they're trying to evict a particular neighbor right now, and there are protests on that street every day. People are you know, sleeping intents in order to be there in the morning.
And stop the eviction.
And this is happening in the center of the city, in a very middle class neighborhood. And this is quite telling because what's happening with this extreme amounts of tourism and essentially very wealthy tourists choosing to live here, and more than doubling the rents, is that it's now affecting the middle.
Class when they VEX two, four or even a single person. Like we always say, if they touch one of us, they touch all of us, and we will always be by the side.
That Barcelona has an issue with access to house and astronomical rents, but a lot of that is about sort of turning flats into short term rents. What I mean is eleven month rents. The problem seems to be more focused on, as I say, digital nomads or just wealthy workers from richer countries just choosing to come here for the lifestyle. The other big issue is the cultural impact
of this. But yeah, choosing to come here for the lifestyle and then paying you know, four times what a normal local rent would be, or like an average local rent would be, because that is so much more profitable to I don't know if it's landlords or huge investment funds or whatever, they try to have these eleven month rents. So it's housing, it's not quite the it's not quite
the weekend stay. Where the focus is now is this eleven month thing, because that's a loophole the law doesn't allow rental contracts for less than leases for less than five years, Like that's what you get when you rent a flat at least five years, but they have a loophole where they can make it eleven months less than a year. It's a different sort of law, and that's what they're doing there basically.
I mean, as is the case in the.
Street I mentioned earlier, they're evicting someone who's lived there for decades to turn it into a you know, less than a year rental situation.
So it's slightly different.
It's for people living here, not so much tourists, but it's the digital normach sort of situation that's very new and that that has risen rent because we had or the city had, you know, mass tourism in twenty fifteen and rents were relatively relatively stable. I say relatively, you know, Airbnb was a huge issue, but this seems on another scale. I mean, the sixty percent increase is mind boggling, and
it's it's being you know, strongly felt by everybody. I mean, you can't, Yeah, it's it's very anxiety inducing to look at.
What's for rent out there. It's just impossible.
This line stuck out for me. In your British Vogue piece, you said, anyone who treats a foreign city as their personal playground isn't adding anything to the mixed beyond cultural imperialism. Can you explain to me what the cultural impact of so many people coming into Barcelona is.
Absolutely, I mean, this is I think just an example of the gentrification happening in so many different places and also the flattening of a lot of cultures that's happening on social media, and you know, as a product of the Internet, so it's not unique to hear there is some of you know, what's been talked about as the generic coffee shop phenomenon that you know, a lot of places now look like like establishments that could be in
any city in the world. They look exactly the same as something you could find in Melbourne or in London.
But that's probably you know, just also because of the Internet and just where where we're at.
But I said that because there's a strong sense from locals that they are sort of background, you know, background extras to somebody else's adventure or life. This is how we I would say, many of us often feel I lived in London for over a decade, and I've you know, spent a lot of time in the US, so I recognize a lot of the conversations, you know, I hear
in coffee shops or on the street. I hear a lot of Americans talking about buying houses or about their pretty luxurious lifestyle here, and I hear a lot of Brits and I have nothing, you know, like, I just recognize the conversations, and I I hear them talk about their lifestyle basically, which is luxurious because obviously it's cheaper
to them than their home countries are. And it just it's something that i've I was reading about San Francisco the other day and something you know, similar was being said, and it sort of erases a lot of the diversity.
I just want to be very clear that this is it's.
Almost the opposite of diversity, because I think this city has always been open to anyone who you know, to immigration, to especially to refugees. You know, it's been very open, and diversity only makes it richer, and it was getting more and more diverse and more interesting and more. I don't know, it's open, it's always it's always felt like that, but this is, this is almost I don't know, it feels extremely different and I think that, Yeah, the word imperialism.
Has been used.
It was like a tongue in cheek to clarify, but it's sometimes talked about as more of a colonial attitude. You know, how some people just use the world as they as their playground.
It's just so palpable.
I mean, we have two official languages here and one one is Catalan, and of course it's it's an endangered language, so people care about you know, people care about it, and it's already it's already not doing great sometimes, you know, it's it's a language, yeah, that is close to a lot of people's heart, and they speak it and we're pretty used to a lot of people not speaking it.
But a lot of digital normals just don't even tried Spanish. They just they just speak in English.
They come into a bakery or whatever, and they just expect to speak English. And not everybody is like that, but there's, you know, countless examples of this kind of attitude.
You just kind of see it everywhere.
It's tricky to say, you know, because you don't want to generalize, but it's also pretty obvious when a lot of.
Just very unique neighborhood shops have closed down and they are now coffee shops or whatever, or yoga studios or co working spaces with all the signage in English and.
Again like you could be in any of their city.
And it's just it is sad because a lot of those establishments made the city unique, you know, they were part of the character.
Thanks for joining us, my pleasure, Thank you for having me. That's it for this episode of the Front Page. You can read more about today's stories and extensive news coverage at endsid.
Herald, dot co dot m Z.
The Front Page is produced by Ethan Sills and Richard Martin, who is also a sound engineer.
I'm Chelsea Daniels.
Subscribe to the Front Page on iHeartRadio or wherever you get your podcasts, and tune in tomorrow for another look behind the headlines.