US Business Summit: Tourism sector will come alive with American visitors

Graham Skellern

New Zealand can look forward to a burst of big-spending American tourists over the second half of this year (2022), says Air New Zealand chair Dame Therese Walsh.

Walsh told the Inaugural United States Business Summit – ‘Changing the Dial’ that up to 31 million Americans were actively looking to visit New Zealand and three-quarters of them would arrive within six months of border re-opening (in early May).

“Travel demand from the United States is going to go gangbusters. US airlines are making a profit now or are forecasting to make one in the next quarter (July to September).”

Australia has been New Zealand’s No 1 inbound tourism market, but pre-Covid Australia was starting to lose its place on the perch, says Walsh. “There were moments when we saw the US outstripping Australia.”

Walsh says American tourists to New Zealand spend more money, they like to get into nature and the great outdoors, and they visit regional centres.

“The US is moving and spending, and we need to be part of. Air New Zealand is building back and doubling down in North America. Cargo has been a big part of what we have been doing. In terms of passenger services, by the end of next year (2023) we will be back to where we were.”

Air New Zealand is flying into Houston and Atlanta, and is starting new 18-hour flights from Auckland to New York three times a week in mid-September.

Walsh says New York is third largest market after California and Texas for tourists to New Zealand. “There is significant opportunity. New Zealand has to be consistent in its ongoing response to Covid and provide certainty to the visitors that it is staying the course.

“Most important is our ability to look after the visitors well and assure them they will be safe in terms of Covid.”

Walsh joined Mainfreight managing director Don Braid and United States Chamber of Commerce head of international Myron Brilliant in a panel discussion on the theme Moving forward beyond Covid. The discussion was moderated by NZ INC. managing director Fran O’Sullivan.

The macro global economic picture is being adjusted and reworked as the implications of the Covid pandemic, inflation, emerging geopolitical fluctuations, and various domestic political and social consequences to production, external supply chains and new consumer concerns and expectations are integrated into forecasting.

The landscape for business is fast-changing as Governments focus on reinvigorating their respective economic recoveries as they move toward a “Beyond Covid” approach.

Braid says United States is likely to provide greatest growth for Mainfreight within the next five years. The company has just half a per cent of the market so far.

The global transport and logistics firm’s business in United States has grown to $1 billion turnover over 22 years. Mainfreight employs 1500 people at 79 branches, with total warehousing space of 750,000 sq m.

Braid says “we have made mistakes in the US like having our headquarters in California instead of the Midwest and the east coast where the population is.”

Braid indicated there were opportunities associated with climate change in the United States, and sending high-quality products there and doing a good job servicing them is valuable in terms of return.

“We can’t get an electric truck in the US and solar power is met with a dumb stare.”

Braid expects shipping and air congestion, along with inflated freight rates, will continue through to 2023 – though shipping freight costs have reduced 4-5 per cent from their peak.

There has been a wait time of 30 days at the Port of Los Angeles with up to 55 containers ships waiting to be worked on, and another 50 vessels sitting further out.

Braid says the US east coast waiting time is five days and the congestion problem is more about moving containers from the wharf. “There’s a lack of chassis and container equipment and a container can sit for up to 12 hours before it is taken off the wharf.”

Brilliant told the summit that these were extraordinary times dealing with the aftermath of the pandemic, the Ukraine invasion, inflation and the rising tension in the United States-China relationship.

“People in Asia-Pacific are feeling that tension and the US has to get back in the game in the region with an action plan such as the Indo-Pacific Economic Framework (IPEF).

“I hope the Biden Administration moves to be more specific about what opportunities IPEF brings. Time is of the essence.

“We have to find a way to get other countries into IPEF. They want something tangible and don’t want to be told what the labour standards are. Market access can be included in the package. And we need ways to deal with the supply chain issues.”

Brilliant says IPEF needs to find creative ways to build relationships with countries like New Zealand that have some values.

“The international system is fragile and will be challenged by China and Russia. We can’t afford a weakened World Trade Organisation and we need to work more closely together,” he says.

Catherine MacGowan, Asia Pacific regional director with Wisk Aero, talked to the summit about a new frontier in aviation – advanced air mobility.

Wisk this year revealed its sixth-generation self-flying, all electric plane or taxi – the eVTOL with four passenger sets. It plans to get this type certified with United States authorities.  Piloted passenger services could be operating by 2024.

Wisk, a joint venture between The Boeing Company and Kitty Hawk Corporation, is based in Mountain View, California, and has a location in New Zealand for transport trials and flight testing. Wisk has already logged 1550 test flights with full-scale aircraft in different locations.

MacGowan says the self-flying plane will provide transport options around the city with the key drivers being on-going congestion challenges and sustainability goals.

“It has a vertical lift-off and can operate from a small footprint such as a helipad, and the use of autonomy technology will unlock the scalability of the development. Of course, the critical path is the regulatory environment.”

Wisk’s vision of delivering safe, everyday flight for everyone is closer than ever to becoming reality, says MacGowan.

 

 

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