Sometimes you don’t appreciate what you’ve got until it’s gone and since COVID-19 took the world by storm we’ve witnessed the devastating effect closing the borders has had on the New Zealand tourism industry. Regions and businesses have been focusing on securing a slice of the domestic tourism market now New Zealanders have no choice but to holiday at home.

If you don’t work in the industry you might be wondering why so much importance is being placed on tourism. It’s something that can benefit small towns as well as big cities, and supports small endeavours through to world class experiences because travellers want different things.

The real kicker though is the way the tourist dollar circulates in a local economy. Visitor spending is new money that’s injected into an economy, and while you may not work in tourism and benefit directly from it, there’s a good chance you’ll benefit when that dollar gets spent again and again. This is referred to as the multiplier effect.

The multiplier effect - how the tourist dollar would benefit our local economy.

The 2017 economic assessment report prepared by Brown, Copeland & Co for Hobbiton Movie Set Tours (Hobbiton) gives an insight into how tourism can positively impact the district. The report compared the economic effects in 2010/2011 to 2016/17.

In 2010/2011 there were 17 full time employees earning a total of $0.6 million in wages/salaries. Six years on there were 205 full time employees and wages/ salaries had increased to $8.0 million.

The flow on effect of the Hobbiton Movie Set throughout the local economy in 2016/2017 was estimated to have resulted in - additional employment of 393 full time equivalent jobs, $16.5 million per annum in additional wages/salaries for local Matamata-Piako residents, and additional expenditure of $78 million per annum for the district. The economic impact on the local economy was expected to continue due to the predicted growth in visitor numbers and the construction of new facilities.

The report found that Hobbiton Movie Set Tours has provided “greater diversity and balance to the local economy and made it more resilient” to the fortunes of the agricultural industry and “provided a broader range of employment opportunities for locals.”

While Hobbiton contributes to the local economy it also brings increased vitality and vibrancy to the district, in particular Matamata town centre. It’s also helped to put Matamata on the map for both domestic and overseas visitors.

In comparison, Te Aroha has lost a lot of big business over the years, and the community has moderate to high deprivation levels compared with the population of Matamata-Piako District overall. This underscores the need for economic development initiatives in Te Aroha.

Comparisons have been drawn between Te Aroha’s potential to become an iconic spa town like the well known Hanmer Springs in the Canterbury region. While it’s not the only successful spa story in New Zealand there are some similarities that make it relevant to our situation.

According to the Hanmer Springs website “Māori were the first to discover the incredible thermal springs when passing through the area. There was never a permanent Māori settlement in the area and it wasn't until the 1850's that they were discovered by an early pioneer.”

“The pools at Hanmer Springs have been publicly owned since 1883…and have grown from a simple bathing area to a multi-million dollar attraction that is still in public ownership, under the Hurunui District Council.”

Under Council’s management, the facility had its busiest month on record in 2010, and in 2011 the thermal pools had its busiest day ever, with almost 5,000 visitors.

The proposed Te Aroha spa development is likely to start operating in 2-3 years’ time and by then we anticipate the impact of COVID-19 will be a thing of the past. The new day spa should be able to attract both domestic and overseas visitors, and relatively quickly become self-funding. Up until then, ratepayers would need to contribute to the costs of the loan to fund the development – but a major construction project like this also creates employment and contributes to the local economy.