Tourism sector bucking softening SME sector trends
13 May 2019
· Almost half of the tourism sector expecting revenue to increase
· 20% of NZ’s tourism operators expect to hire more employees this year
· 34% expect to increase staff wages
Local tourism operators are bullish on growth over the next 12 months, despite fears of a cooling economy and rising operational costs according to the latest MYOB Business Monitor survey'.
Nearly half (45%) of the tourism sector say they expect their business’ revenue to be up in 12 months’ time, while only 17% say they expect it to be down. Thirty-five percent predict revenue or gross turnover will be the same this time next year.
The tourism industry’s expectations are considerably more positive than the SME sector average, with only a third (32%) of all SME operators forecasting their revenue will be up in 12 months’ time, while 19% say it will be down.
MYOB country manager Ingrid Cronin Knight said the local tourism sector has been enjoying steady growth despite concerns among local SMEs about the direction of the economy.
“The tourism industry is New Zealand’s largest export industry, employing one in seven Kiwis,” she said. “It’s critical to our economy, and although international trade concerns, new legislation around tax, and threats to local and international security have certainly shaken the economy in recent months, it is important local tourism operators are confident enough to get on with business as usual.”
Confidence in the economy is also higher among tourism operators. According to the survey, more than two fifths (43%) of the tourism sector expect the New Zealand economy to decline this year, while a third (32%) expect it to improve.
In contrast, nearly half (48%) of all SMEs say they expect the local economy to worsen over the next 12 months, while less than a fifth (19%) say it will increase.
“According to the survey, a third of tourism operators experienced revenue growth over the last 12 months,” said Ms Cronin-Knight.
“While this is only slightly higher than the SME average, their performance over the last year has boosted confidence and the willingness to invest in growth throughout the sector.”
A fifth of the tourism sector say they will hire more full-time workers this year, while more than third (34%) say they will increase the amount they pay their staff. A third will also look at increasing their prices over the next 12 months.
This compares to just 9% of all SMEs who have indicated they will grow staff numbers this year, and 23% who say they will look at paying their staff more. A quarter of all SMEs say they will be increasing their prices and margins on products or goods sold.
Despite investment plans, business pressures continue to mount
According to the MYOB Business Monitor, the tourism sector continues to face some key business pressures, including rising fuel prices, staying ahead of the competition and costs of attracting customers.
More than two fifths (42%) of businesses involved in the tourism industry say the cost of fuel will put extreme or quite a lot of pressure on their operations over the next 12 months, while 35% say the same about staying ahead of the competition. Only a fifth (21%) say fuel prices will not have an impact on their business.
“The cost of fuel often hits tourism operators twice. While they might feel the pinch themselves, the greater concern comes from the impact fuel costs can have on local and international tourists, given the industry is highly dependent on long-haul travel and a growing number of independent travellers who want to be highly mobile while they are here,” said Ms Cronin-Knight.
“Despite rising commodity prices and growing compliance challenges, the survey indicates tourism operators will offset these costs by increasing their prices and expanding their product or service offerings.
“A fifth will also invest in IT systems over the next 12 months, which is likely to help with compliance and taxation obligations.”
- Ends -
For further comment or other information please contact:
Rebecca Huang, MYOB NZ Public Relations Consultant
M: 021 112 2720 / E: email@example.com
MYOB (ASX: MYO) is a leading cloud based business management solutions provider. It makes business life easier for approximately 1.2 million businesses across Australia and New Zealand by simplifying accounting, payroll, tax, practice management, CRM, websites, job costing, inventory and more. MYOB provides ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly in cloud computing solutions, and in 2015 was awarded the BRW award for the most innovative large company for 500+ employees and placed 2nd in BRW’s Most Innovative Companies Award list across all categories nationally. For more information, visit myob.co.nz or follow @MYOB on Twitter.