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Speaker 1: Tourism numbers are out, it's not good news for the sector.

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Speaker 1: As we head into summer, we're still only hitting eighty

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Speaker 1: seven percent of our pre COVID numbers. It's more of

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Speaker 1: a merit than an excellence on an NCAA exam. You'd

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Speaker 1: have to say. Migration is also declining as a record

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Speaker 1: number of kiwis leave most of them to Australia. It's

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Speaker 1: net positive for now but reducing each month. So could

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Speaker 1: we be on the way to net zero migration next year?

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Speaker 1: And what does it mean? Mark Smiths, the ASP senior economists, Mark,

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Speaker 1: good morning.

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Speaker 2: Good morning, good to hear from you.

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Speaker 1: Should we be worried about this? It's a pretty stubborn

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Speaker 1: pre COVID number on MIGRA on tourism.

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Speaker 2: Yeah, that's right, and sims of the shortfall if you

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Speaker 2: put it that way, it's three. We're board based by

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Speaker 2: different markets, particularly Europe about thirty percent below pre COVID levels,

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Speaker 2: China about forty five and for the rest of Asia

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Speaker 2: about thirty percent as well. So it is a reasonabor

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Speaker 2: based reason for that. Now looking at probably the reasons, one,

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Speaker 2: the global economy is still of recovering from COVID, so

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Speaker 2: it will take some time. Two. New Zealand's are pretty

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Speaker 2: periphul destination for tourism the best of times, and we're

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Speaker 2: very small, only about two point two percent of global tourism.

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Speaker 2: Probably the most important reason, I think is that cost

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Speaker 2: remains stubbornly high for people getting to New Zealand. For

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Speaker 2: long away New Zealand's are recently high cost destination, and

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Speaker 2: airfares are still very high as well.

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Speaker 1: So it's not us, it's them. Basically, they're in the

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Speaker 1: cost of living crisis too, and we're far away. It's

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Speaker 1: not that we've gotten ugly orly shining during COVID.

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Speaker 2: Well I'm not so sure about that, And I mean

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Speaker 2: there are things you can do to make sure that

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Speaker 2: you're a lot more attractive destination. Arguably, we'll probably have

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Speaker 2: some work to do as well.

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Speaker 1: Yeah, and when we are slapping on a tourist tax too,

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Speaker 1: which has yet to be felt. Let's talk about the

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Speaker 1: other elephant in the room, and that's migration. What happens

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Speaker 1: if we hit net zero next year? What does that

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Speaker 1: mean for us?

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Speaker 2: Well, yeah, migration. If you like, as a viewer, I

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Speaker 2: suppose again, of how attractive you are, we've gone from amparible.

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Speaker 2: We're sort of at the head of the dirty stakes.

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Speaker 2: Very attractive now to locking at potentially net outflows next year.

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Speaker 2: Now that's really a reflection of where the New Zealand

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Speaker 2: economy is relevant to the rest of the world, and

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Speaker 2: at the moment we're weaker and those migration flows are falling. Now,

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Speaker 2: migration is the difference between two very big numbers, and

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Speaker 2: it's certainly possible we could see net outflows for next

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Speaker 2: year as well.

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Speaker 1: Next year and is that really bad? I mean, what

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Speaker 1: does it do to our GDP? Obviously it'd be good

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Speaker 1: for presumably for demand on resources like hospitals, et cetera.

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Speaker 1: But what does it do to our growth?

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Speaker 2: Yeah, I mean that's a good point. A lot of

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Speaker 2: the things, a lot of the resource utilization will ease,

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Speaker 2: so things like congestion, hospitalization that that will be easier.

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Speaker 2: The other side of the corner will be demanded, and

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Speaker 2: the economy will be a weaker. The housing market for example,

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Speaker 2: will be a weaker as well, less demand for housing

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Speaker 2: and potentially things like the labor market. Migration has been

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Speaker 2: a huge factor enable mu Zium to revise, you know,

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Speaker 2: enough staff for certain roles that might also be an issue.

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Speaker 1: What's what's our projection for GDP for next year in

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Speaker 1: the following.

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Speaker 2: Essentially it's been flat, well has a year or two.

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Speaker 2: We might see a bit of a rebound sort of

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Speaker 2: second half of next year and that should hope the

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Speaker 2: ten around migration flows. But again it's still quite a

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Speaker 2: long way ahead and it's still quite of uncertainly, but

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Speaker 2: hopefully we're past the sort of trif of the cycle

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Speaker 2: and we should start to improve by the d of

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Speaker 2: next year.

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Speaker 1: You'd hope. So Australia is looking at one point two

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Speaker 1: percent for twenty five and one point nine percent for

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Speaker 1: twenty six, so we're going to try and beat them some.

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Speaker 1: Statched up with Mark, Thank you very much, Mark Smith,

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Speaker 1: asb Senior economist on those two new numbers, one tourism,

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Speaker 1: the other migration.

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Speaker 2: For more from early edition with Ryan Bridge.

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Speaker 1: Listen live to News Talks it'd be from ive am weekdays,

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