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What does the return of Chinese visitors to New Zealand mean for short-term rentals in 2023 & beyond

Updated: Mar 8, 2023


What does the return of Chinese visitors to New Zealand mean for short-term rentals in 2023 & beyond

The tourism sector, including the short-term rental market, went through a rough period during the Covid-19 pandemic. One of the prominent and lingering impacts was the loss of visitors from China, with the country keeping its borders closed for a significantly longer period than most other countries. That changed at the start of 2023 when restrictions were finally eased and the Chinese borders opened for international travel. So, what does this mean for the short-term rental market in New Zealand?


The answer is two-pronged

  1. Based on pre-pandemic statistics, the impact on short-term rentals is going to be very positive.

  2. It will take time for Chinese tourism to get back to pre-pandemic levels.


To get an idea of what we might see over 2023 and beyond, let’s look back to the situation before the pandemic and the impact that travel restrictions had on Chinese visitor numbers to New Zealand.



Big Numbers, Growth, and Reasons for Optimism


Before the pandemic, the Ministry for Business, Innovation & Employment (MBIE) had predicted that Chinese visitors would overtake Australian visitors in tourism spending by 2024, with an anticipated spend of $3.1 billion. Whilst Covid may delay this prediction, the resumption of Chinese travel is still a massive boost for both the tourism and short-term rental industries.


The importance of Chinese visitors has be highlighted by a Tourism New Zealand pre-pandemic market analysis:

  • In the financial year prior to Covid-19, Chinese visitors to New Zealand spent $1.7 billion.

  • Approximately $333 million was spent with New Zealand's Regional Tourism Operators.

  • China was the second largest tourist market for New Zealand (Australia was the largest).

  • Chinese visitors made up 11 percent of total arrivals to New Zealand but accounted for 15 percent of the visitor spend.

  • Chinese visitors had a high average daily spend of $4,605.


Prior to Covid-19, most Chinese visitors came to New Zealand for a holiday:

  • 79 percent visited for a holiday.

  • 13 percent visited for friends or relatives.

  • 4 percent visited for business.

  • 3 percent visited for education.

  • 1 percent visited for conferences.


Summer was the most popular time of the year for Chinese visitors, but they travelled in off-peak seasons too.



The Crash


Official figures show the stark impact the Covid-19 pandemic had on Chinese visitor numbers and, by extension, short-term rentals.


According to MBIE data, 2018 was the strongest year on record for Chinese visitors. Almost 450k people entered the country in that 12-month period. However, with the severe border restrictions in China during the Covid-19 lockdown, visitors to New Zealand were down 99.6 percent in 2021 to just 1.6k.



A Positive Outlook


Short-term rentals have always been popular amongst Chinese visitors and their return to New Zealand will have a strong impact on both the tourism industry and the short-term rental market. Tourism New Zealand are expecting over 150k Chinese visitors in 2023, with numbers continuing to climb and rebounding close to pre-pandemic levels next year.


Since the pandemic first took the world by storm, private, self-catered accommodation has become more popular. Short-term rentals are far more suitable for minimising contact with strangers when compared to the likes of a hotel, making it a safer and more appealing environment to stay in. With China being one of the most health-conscious country's and the pandemic not likely to be forgotten by anyone any time soon, this trend is set to continue.


In a recent survey by STR, short-term rentals were the only accommodation type that achieved any positive sentiment from travellers until May 2022, where hotels made a slight resurgence. The hospitality data provider polled nearly 1,300 global travellers on their attitudes towards accommodation throughout the pandemic, with short-term rentals growing in interest by 12% in 2021 and continuing to trends upwards to just under 20% in 2022.



2020 - 2022 Global Accommodation Interest


2020-2022 global accommodation interest

Conclusion


New Zealand continues to be a popular tourist destination, for the Chinese and the rest of the global population alike. As our Chinese travellers return, with their preference for short-term rental accommodation already clear pre-Covid, owners of short-term rental accommodation are set to thrive.


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