Defence Of Tourist Industry Economics

Press, Volume CVI, Issue 31090, 20 June 1966, Page 10

Defence Of Tourist Industry Economics

The loss made by the Tourist Hotel Corporation for the year ended September, 1965, was defended on Saturday by Mr J. L. Chapman, president of the New Zealand Travel and Holidays Association.

He told the annual conference that although the corporation’s net loss was £344,000, its cash loss was actually £27,340 and the balance was depreciation and interest, of which £153,218 new hotels.

“What does the taxpayer (and in particular, the tourist industry) get for this expenditure of public money?” he asked. “Apart from the £500,000 overseas funds earned by the corporation and the far greater amounts paid for transport, goods and accommodation at other hotels by the overseas visitors (who form 45 per cent of the corporation’s guests) there is the undoubted influence of the corporation in setting standards of comfort and service for the country. , “It is difficult to visualise how much the tourist industry would be affected if there were no hotels at, for example, Mount Cook or Milford, and the recent opening of Waitangi Hotel illustrates how one hotel can change the pattern of touring in a whole district. The isolations of these hotels makes them commercially uneconomic, but from a national standpoint, well worth subsidising.” Mr Chapman also criticised the term “deficit” used to describe the difference between the amount spent by New Zealand tourists abroad and the'money brought into New Zealand by visitors. “A few weeks ago,” he said, "I listened to an address on tourism in Christchurch by the Minister of Finance (Mr Lake). One of the main points of his address was, that last year New Zealanders going overseas spent £28.5 million, while overseas visitors coming to New Zealand brought in only £9.7 million, this making a deficit of £lB.B million.

“As a result of this speech newspapers came out with such headlines as, ‘£lB.B million deficit in tourist activities’ and ‘huge loss of exchange on tourist activities.’ An introductory paragraph read, *New Zealand failed miserably last year in its bid to win overseas exchange from tourist activities. Instead of making money it lost £lB.B million,’ ” Mr Chapman said. "Although this view about a so-called tourist deficit emerges every now and again, I consider this evaluation of tourism logically untenable. "Th a capacity of this country to allow its nationals to spend foreign exchange on overseas travel surely depends on our over-all prosperity and not on whether we are even fortunate enough to have our own tourist industry which contributes to that prosperity. “Our capacity to send our own nationals abroad is in no way related to our capacity to attract visitors to New Zealand. They are two entirely

unrelated problems depending on two entirely unrelated sets of circumstances. “In the first we have to be wealthy enough to send our people abroad and in the second we have to have enough attractions for people to want to come and visit us. “Third. If we were to concede that there is such a thing that might be called a tourist balance of payments, and I for one am not prepared to accept this, the majority of countries in the world that would have a favourable balance would be the underdeveloped countries such as India, Indonesia. Korea and the like,” he said. “Surely it would be just as illogical to off-set the cost of our farmers’ overseas travel against the income from our primary production, than against what overseas visitors spend here in overseas exchange, which has been earned by their efforts in their countries at no cost to us. “No one would consider deducting the cost of overseas travel of say, Sir John Ormond or the Deputy Prime Minister (Mr Marshall) from our meat or butter cheques.

so shv pick on the tourist industry. In fact, of all our export industries tourism would probably have the greatest net value of all in overseas exchange. “The political device of restricting overseas travel is not new, it is rife in the un-der-developed and developing countries. Fortunately, in the more enlightened and affluent countries there is massive support for the United Nations maxim of ‘freedom to travel.’ Travel creates wealth through knowledge and experience. “Much more emphasis should be put on earning foreign exchange than saving it. The late President Kennedy was faced with this problem when his advisers told him that Americans were spending far too much in overseas travel for the balance of payments good of the United States of America. “All tourist minded people throughout the world believe he made the right decision when he decided not to restrict Americans, but to attract more visitors to America, which has been done with amazing results,” said Mr Chapman.