Developing an oil vulnerability assessment tool for industry

Abstract

Oil is the lifeblood of our economy, and recent growth in tourism has largely been facilitated by the availability of cheap oil. Increasing scarcity of global oil resources and concomitant rising oil prices are likely to impact considerably on tourism, globally and in New Zealand. Higher oil prices will affect New Zealand tourism in three ways: a) macroeconomically, b) destination-related effects, and c) impacts at the individual businesses level. The outputs of research at all three levels (including detailed elasticity analyses by market segment) have been synthesised into a simple online tool that allows a business to assess how vulnerable they are to rising oil prices, depending on their market mix, dependency on energy as an operational input and geographic locations. Merits and shortcomings of such a simplified tool will be discussed critically.