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International spend into New Zealand rises to $3.4 billion from Visa cardholders

Visa’s annual Inbound Spend Report highlights move by international visitors towards paying via phones and wearables, as total spend grows across all merchant categories

AUCKLAND, June 26 2018 – Spend by international Visa cardholders grew 15 per cent to NZ$3.4 billion in 2017, according to data from Visa’s global payments network. This includes spend by visitors in New Zealand, as well as those buying from New Zealand businesses online.

The findings are part of the latest annual Visa Inbound Spend Report (“the Report”) which provides insights into the spending behaviours of international visitors.

“The anonymised data from VisaNet on the spend patterns of international visitors demonstrates that our tourism sector continues to benefit New Zealand,” says Marty Kerr, Visa Country Manager for New Zealand and South Pacific. “It also shows that there is plenty of opportunity for New Zealand businesses to better understand how to get a share of international visitor spend and drive future growth.”

Top inbound spend markets
The ten highest inbound spend markets didn’t change from 2016, but all of them increased the amount they spent in 2017, and combined they represented 85 per cent of total spend by Visa cardholders while in New Zealand.

Australia continues to have the largest share of the market, with its citizens spending a combined NZ$522 million, followed by visitors from USA, China and the United Kingdom.

Country		2017 spend $NZD		2016 spend $NZD		Percentage difference		Share of market
Australia		$522m		$447m		+17%		28%
USA		$325m		$276m		+18%		18%
China		$218m		$191m		+14%		12%
UK		$164m		$154m		+6%		9%
Germany		$92m		$71m		+29%		5%
France		$64m		$62m		+3%		4%
Canada		$56m		$50m		+12%		3%
Japan		$43m		$40m		+8%		2%
South Korea		$38m		$35m		+10%		2%
Singapore		$30m		$28m		+7%		2%

Ten highest spending markets: data is based on face-to-face spend while travellers are in New Zealand.

Glenn Maguire, Visa’s Chief Economist for Asia Pacific says, “Globally, we’re seeing an emergence of an ageing travelling class. While New Zealand benefitted in 2017 from new flight routes that made it more accessible to Western European tourists in this travelling class, further leveraging the country’s natural beauty and world-class food and wine could appeal to older tourists from inbound visitor markets.”

Impact of major events
The report highlights the positive impact that major events have on international visitor spend. The Lion’s Rugby Tour was held during the off-peak visitor season of June and July 2017, yet the amount spent by visitors from the UK and Ireland nearly doubled when compared to the same time the year before. This was an increase of 88% in June 2017 to $11.43 million, and an increase of 93% in July 2017 to $12.36m.

Marty Kerr, Visa Country Manager for New Zealand and South Pacific says: “This supports the Government’s strategy of attracting major events for the benefit of the economy and bodes well for hosting the America’s Cup in 2021.”

Top spend categories
The three leading consumer categories of shopping and retail, lodging, and restaurants also remained unchanged for both 2017 and 2016, demonstrating that hospitality and retail operators benefit the most from international visitor spend.

“The restaurant sector benefitted by a rise of almost a third in total spend by international visitors to New Zealand, while food and grocery, and fuel and transport, also gained through an increase in spend,” says Kerr.

Category		2017 $NZD		2016 $NZD		% Change
Shopping & Retail		$384m		$356m		8%
Lodging		$333m		$298m		12%
Restaurants		$284m		$224m		27%
Food & Grocery		$228m		$190m		20%
Fuel & Transport		$160m		$128m		26%
Entertainment		$121m		$106m		14%
Vehicle Rental		$92m		$88m		4%
Travel Services		$77m		$73m		5%
Services		$65m		$57m		13%
Home Improvement & Supply		$59m		$52m		13%

Top ten leading consumer categories for inbound spend: data is based on face-to-face spend while travellers are in New Zealand.

More visitors spending on contactless

Another trend uncovered in the report is the growth in international visitors making contactless payments while in New Zealand – on cards, mobiles, and wearables – which rose by 95 per cent from 2016.

“New Zealand merchants can prepare their businesses for international visitors by investing in contactless payments technology, enabling all customers to choose their preferred payment method, be it on cards, mobile devices or wearables such as their smart watch,” says Kerr.

The increase in contactless payments was driven by Australian visitors, who accounted for 66 per cent of the total contactless spend, while Visa accountholders from Germany, China and the UK all doubled their contactless spend in 2017. The fastest growing consumer categories for international contactless spend – all growing more than 100 per cent year-on-year – were lodging, apparel & accessories, transportation and entertainment.

The data from VisaNet is consistent with the independent Merchant Contactless Study undertaken by Paymark and independent insights agency TRA, which shows through analysis of Paymark data that in the past three years merchants that have enabled contactless have enjoyed more than double the sales growth (10.1%) than those that haven’t (4.6%)[1].

[1] Merchant Contactless Study, May 2018
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