Impacts of High Oil Prices on Tourism in New Zealand

Abstract

Global oil supply is unlikely to meet rapidly growing global demand unless oil prices rise significantly. In New Zealand, a high oil price future threatens the tourism sector, which is a major source of export income. Using a two-stage general equilibrium modelling approach, the long-run economic effects of a permanent decline in the global oil supply are quantified. The tourism sector and especially tourism exports are disproportionately affected, due to a combination of income and price effects. Impacts differ significantly by inbound tourist market segments. The most distant markets are more adversely affected, but distance is only one of several important factors.

Modelling the volatility of international visitor arrivals to New Zealand

“…The impact of the change in 'fuel prices' variable (a commonly used proxy for airfares) on the growth of visitor arrivals by air transport from New Zealand's eight key tourist source markets is largely consistent with prior literature (e.g. Becken, 2008;Becken et al, 2009;Becken and Lennox, 2012;Lennox, 2012), showing negative coefficients for five countries (Australia, China, Japan, South Korea and the US); more importantly, the largest tourist source market (Australia) and the fastest growing market (China) were sensitive to changes in fuel prices; more specifically, visitor arrivals by air transport from Australia and China were negatively affected by the changes in fuel prices. Furthermore, only China was reported to have a negative parameter for the 'SARS outbreak 2003' variable out of all of the tourist source markets.…”

“…These factors include the 9/11 terrorist attacks, the severe acute respiratory syndrome (SARS) outbreak (Yeoman et al, 2012), higher aviation fuel prices (e.g. Becken, 2008;Becken et al, 2009;Becken and Lennox, 2012;Lennox, 2012;Schiff and Becken, 2011), the Christchurch earthquakes of 2011/12 and the Rugby World Cup of 2011 (a major sport tournament) (Tsui et al, 2014;Yeoman et al, 2012), seasonality and other specific calendarrelated holidays such as the New Year holiday period , regional and global economic crises (Yeoman et al, 2012), air ticket prices (airfares), the availability of direct air services (Duval and Schiff, 2011;Schiff and Becken, 2011;Turner and Witt, 2001) and exchange rate fluctuations (e.g. Stavarek, 2007;Schiff and Becken, 2011;Turner and Witt, 2001;Yeoman et al, 2012).…”

The Macroeconomic Determinants of International Casino Travel: Evidence from South Korea’s Top Four Inbound Markets

“…We use M2 instead of M1 because the former reflects overall economic conditions better. Our choice of macroeconomic indicators is generally consistent with previous studies focused on the macroeconomic impacts on tourism [34,49,50].…”

“…International travel is fuel-intensive and energy prices are an important factor not only in the tourism industry but also in the wide variety of industries in which it is a crucial component of production and transportation [34]. Accordingly, researchers have naturally been interested in how the price of oil affects demand in the tourism and hospitality industry, resulting in a thoroughgoing model that incorporates oil prices, tourist spending and consumption of travel activities.…”

Determining the Relationships between Price and Online Reputation in Lodgings

“…However, there has not been much research on the relationship between prices and the online reputation of accommodations, measured in different ways (e.g., quality of service, value, and added value). The research on prices in tourism has focused on analyzing different aspects, such as price asymmetry (Lee and Jang 2013), the identification of factors influencing price evolution (Lee 2011), the effect of discounts (Croes and Semrad 2012;Blal and Graf 2013), dynamic pricing strategies (Abrate et al 2012), the impact of oil prices on tourism (Lennox 2012), the relationship between hotel room prices and location (Zhang et al 2011), the impact of advertising on pricing and profit in the tourism supply chain (Jena and Jog 2017), the relationships with the category of lodgings (Israeli 2012;Tanford et al 2012), price elasticity of the lodging demand depending on advertising (Chen et al 2015), customers' price perceptions (Kleinsasser and Wagner 2011;Masiero and Nicolau 2012b), pricing determinants in hotels (Hung et al 2010;Espinet et al 2003), the competitive positioning of lodgings (Rodríguez-Díaz et al 2015, 2018, the importance of price in hotel selection (Lockyer 2005), and the relationship between the room rate and lodging performance (Qu et al 2002;Enz et al 2009;Ye et al 2009;Chen et al 2011;Noone et al 2011;Chen and Chang 2012;Xie et al 2014). Jena and Jog (2017) regard the seasonality of tourist markets as a decisive factor in the price variable.…”