Tourism's exposure to global oil price

Abstract

Tourism is an important sector contributing 19% to New Zealand’s export revenue. At the same time, tourism is extremely dependent on oil for both travel to and within New Zealand. While forecasts for future tourism growth are generally optimistic, they fail to take into account potential changes in global oil price and effects on arrival numbers. It might be timely to consider how tourism might change given incremental or rapid increases in oil price. This research will develop a Tourism Sector Model that allows investors, operators and policy makers to assess such changes and develop adaptation measures for mitigating associated risks. To this end, a five-step methodology will be presented in this paper. Ultimately, the research seeks to answer how travel behaviour will change under various oil price scenarios, what types of tourists, products and destinations are most at risk, and what adaptation measures could be put in place to manage those risks.