New Zealand's Tourism Industry Struggles to Regain Pre-Pandemic Status

New Zealand's tourism sector is striving to reclaim its position as the country's leading source of overseas revenue. According to the latest government data, foreign visitor spending reached a record NZ$18.1 billion (approximately US$11 billion) for the year ending March 2025, marking a 7% increase. However, this figure still falls short of the dairy industry's NZ$23.1 billion in exports during the same period. The tourism sector, which contributes about 8% to New Zealand's gross domestic product and employs 6.8% of the workforce, has made significant strides in recovery since the Covid-19 pandemic led to border closures in 2020.

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The Tourism Satellite Account report indicates that overseas visitor arrivals increased by 4.3% to over 3.3 million in the year leading up to March 2025. Notably, arrivals from China, which was the second-largest source of tourists before the pandemic, have not yet returned to pre-Covid levels. However, there was an 18% increase in Chinese arrivals, totaling 248,350. Australia remains the largest source of tourists, contributing around 1.4 million visitors. The New Zealand government anticipates that Chinese tourist numbers could rise by an additional 50,000 annually, following a visa-free travel agreement with Australia and the removal of visa requirements for Chinese passport holders transiting through New Zealand.

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While tourism shows signs of recovery, the dairy sector continues to thrive, with exports rising by 9% in 2024-25 and a remarkable 35% increase since 2020. This growth is expected to persist, driven by enhanced local milk collection during the current season. The dairy industry's robust performance underscores the challenges faced by tourism in regaining its former status as the top overseas revenue earner.

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Despite the positive trends in tourism spending and visitor arrivals, critics argue that the sector must implement more effective strategies to fully recover and compete with the dairy industry. Concerns have been raised regarding the reliance on a limited number of markets, particularly China, and the need for diversification to ensure sustainable growth.

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The New Zealand government has expressed optimism about the tourism industry's recovery, highlighting initiatives aimed at boosting visitor numbers. Officials noted that the removal of visa requirements for Chinese travelers is a strategic move to enhance tourism routes and lower travel costs, ultimately benefiting the sector.

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While the overall increase in tourism spending and visitor arrivals is evident, discrepancies remain regarding the pace of recovery from different markets. The extent to which arrivals from China will stabilize and grow remains uncertain, as does the potential impact of global economic conditions on tourism.

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“New Zealand’s tourism industry still needs to do more if it is to regain its title as the nation’s biggest earner of overseas revenue.” — New Zealand Government Report

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