Tourism recovery is still moving forward, but pressure is building around the edges
New tourism data from Infometrics shows the recovery in international travel is continuing, although the conditions supporting that recovery are becoming less predictable. Visitor arrivals are climbing, regional tourism centres are benefiting and confidence in New Zealand as a destination remains solid. At the same time, higher fuel costs, aviation disruption and global instability are starting to sit much closer to the industry than they were even a few months ago.
The latest figures for the year to March 2026 show international visitor arrivals sitting at 94 percent of pre-pandemic levels. Arrivals rose 11 percent over the three months to March compared with the same period last year, with annual growth running at 15 percent.
On the surface, the numbers are positive. Hotels in key tourism regions are seeing demand continue to improve, particularly in leisure markets. But there is now a noticeable split developing between where tourism is growing strongly and where recovery is still patchy.
Australia remains the biggest driver.
Australian arrivals were up 21 percent in March compared with the same month last year, accounting for about half of the total increase in visitor numbers. That matters because Australian travellers continue to provide a level of stability for the market. They are closer, generally less affected by long-haul airfare pressure and more likely to travel on shorter planning cycles.
The weaker New Zealand dollar is also helping. For Australian visitors, New Zealand is currently looking comparatively good value, particularly against other international options.
China is also continuing to rebuild.
Chinese arrivals were up 20 percent in March, although the market is still sitting below pre-pandemic levels overall. Even so, momentum is clearly improving. One of the more interesting shifts is how many Chinese travellers are now coming through Australia before arriving in New Zealand.
Since the visa-free transit option was introduced late last year, arrivals via Australia have increased sharply. Around 40 percent of Chinese visitors over the past five months arrived that way, compared with 25 percent a year earlier.
That may sound like a small operational detail, but it matters. It shows how connected the Australia-New Zealand travel market is becoming again, particularly for long-haul travellers looking to combine destinations in a single trip.
The regional split inside New Zealand is also becoming more obvious.
Queenstown and Christchurch continue to lead the recovery, with arrivals up 27 percent and 24 percent respectively in March. Auckland was more moderate at 9.5 percent, while Wellington remained softer again.
For hotels, that difference is important because not all recovery flows evenly through the market. Some regions are benefiting from strong leisure demand and international visitor activity, while others are still waiting for business travel and events to fully return.
The new international services into Hamilton and Dunedin are also worth watching, even if the numbers are still relatively small for now. Over time, those routes could gradually shift how visitors move around the country.
The bigger issue sitting behind the latest data is aviation.
March is the first month where the tourism figures are starting to reflect disruption linked to the Iran War, particularly through reduced direct flight activity across the Middle East. Airlines have largely managed to reroute flights and keep long-haul travel moving, which has helped maintain visitor growth from markets like the United Kingdom.
But it is difficult to ignore what usually follows periods like this.
Higher oil prices eventually feed into airfares. For a long-haul destination like New Zealand, that matters. Even when people still want to travel, higher ticket prices can change behaviour. Travellers shorten trips, spend less freely or delay making bookings altogether.
That creates a different conversation for hotel operators heading into the second half of the year.
Demand is still there, but the market is becoming more sensitive. Some premium and experience-led operators may continue to perform reasonably well, particularly where international visitors are still prepared to spend. More price-sensitive parts of the market may feel pressure sooner if travel costs continue rising.
At the same time, hotels are already dealing with higher operating costs across wages, food, utilities and insurance. Tourism recovery helps, but it does not automatically remove those pressures.
The industry is in a far better position than it was two years ago, although the next stage of recovery is unlikely to be as straightforward as simply waiting for visitor numbers to return.
The tourism market is improving. The challenge now is how stable the wider travel environment remains around it.
