The Dim-Post

March 30, 2011

Depressing thought of the day

Filed under: economics — danylmc @ 11:08 am

Stuff reports:

The tourism sector will bear the brunt of the Christchurch and Japanese earthquakes, but a plunge in tourist arrivals should be short-lived and largely over by the middle of the year, says new research from Goldman Sachs & Partners New Zealand.

The tourist sector is a big part of our economy. And the tourist sector is largely serviced through international jet travel. And international jet travel keeps getting more expensive as the price of oil goes up.

If oil gets too expensive there are various alternatives for most forms of land transport. Electric cars, trains and other forms of public transport, biofuels and so on. But googling for practical alternatives to jet fuel reveals that this is something researchers are ‘looking into’, which isn’t encouraging. What happens to our tourist industry if civil war breaks out in Saudi Arabia and the cost of long-range air travel becomes prohibitive? Nuthin’ good.

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50 Comments »

  1. Electric zeppelins?

    Comment by Steve — March 30, 2011 @ 11:14 am

  2. That’s your answer to everything.

    Comment by danylmc — March 30, 2011 @ 11:15 am

  3. Perpetual motion generation?

    Comment by Ethan Tucker — March 30, 2011 @ 11:17 am

  4. Making stuff people want instead of doing minimum-wage scut work for wealthy foreigners?

    Comment by Bernard Darnton — March 30, 2011 @ 11:28 am

  5. If we leave things a while, tectonic plate movement will bring New Zealand closer to the rest of the world naturally and the jet fuel thing should no longer be an issue.

    Comment by MikeM — March 30, 2011 @ 11:49 am

  6. tectonic plate movement will bring New Zealand closer to the rest of the world

    No, it’ll bring part of New Zealand closer. We better hope it’s the part with Queenstown and the LOTR film sites.

    Comment by Phil — March 30, 2011 @ 12:18 pm

  7. Fortress NZ! The Quest For Security!

    Comment by Philoff — March 30, 2011 @ 12:22 pm

  8. Ethan, on this blog we obey the laws of thermodynamics.

    http://www.youtube.com/watch?v=Xy0UBpagsu8

    Comment by Paul — March 30, 2011 @ 12:22 pm

  9. Paul,

    That would be a change from the norm … reality doesn’t seem to impose many other constraints on what goes on here.

    Ba-dum-cha.

    Comment by Andrew Geddis — March 30, 2011 @ 12:27 pm

  10. World’s Largest Flying Fox™

    Comment by Jordan — March 30, 2011 @ 12:28 pm

  11. ^ Just to clarify the above, I’m talking about an fleet of tamed Pteropus Vampyrus here, genetically modified to take the weight of an adult human.

    None of this weak kiddie toy shit.

    Comment by Jordan — March 30, 2011 @ 12:33 pm

  12. Hopefully, we’ll see a move away from many visiting middle class tourists, towards fewer richer tourists with larger per-tourist spends.

    This trend will eventually lead to the arrival of MEGA-TOURISTS whose love of LOTR, Kiwis, and sheep made from cotton wool and matchsticks will cause them to spend per day, what the middle class tourists collectively spent in a year.

    Easy.

    Comment by Bed Rater — March 30, 2011 @ 12:47 pm

  13. More realistically though, you’re right that there are limited alternatives to air travel. The best approach to cushioning the impact of any jet fuel price crisis is likely to be a mixture of demand and supply side initiatives.

    Demand would need to be increased, such that the number of people willing to pay $2000 a ticket is as close as possible to the number of people who were willing to pay $1000 a ticket. The private sector obviously has the largest role to play in this, but the government could assist through Tourism NZ etc. Given that it already does this, any gains are likely to be marginal though. Price control of airlines is out of the question, but the government certainly has a role to play in monitoring fees charged by the large airports.

    Supply could also be ramped up. New competing airlines could be wooed (either by the airports or the government), and the added competition would help to drive efficiencies and lower prices.

    Lastly, a shift towards more fuel-efficient aircraft would reduce the massive impact that fuel prices have on travel costs.

    All of these options are tinkering at the margins though.

    Comment by Jordan — March 30, 2011 @ 12:51 pm

  14. Bullet trains through the center of the earth. And free hats on arrival (everyone loves a free hat).

    Comment by gazzaj — March 30, 2011 @ 1:02 pm

  15. Not the complete answer but it is possible to refine A1 jet fuel from biodiesel. The issue is as always were to get the biomass.

    I suspect that air travel, jet or otherhwise, will become the preserve of the rich and governments, i.e. like the before 1980s and budget airlines.

    For the rest of us it will be domestic holidays or long term OE with travel by ocean liners, which will be hybrid vessel power by wind, biofuels and the remaining costly oil.

    Comment by Doug — March 30, 2011 @ 1:03 pm

  16. I thought the Dunkin Donuts at Auckland Airport had taken care of all of these any issues with attratcing tourists in perpetuity…

    Comment by Sam — March 30, 2011 @ 1:10 pm

  17. This trend will eventually lead to the arrival of MEGA-TOURISTS

    I know you’re taking the piss, but this might be an idea actually worth pursuing.

    Take, as example, Sachin Tendulkar. He loves coming to New Zealand. Not to play cricket, but simply to get away from the massive throng of crazed fans that follow him everywhere in India.

    Why would we not try to tap into that hyper-rich market and provide them an escape from the global celebrity madness?

    Comment by Phil — March 30, 2011 @ 1:11 pm

  18. We’d probably have to sell the mega-tourists a beach or mountain to make it worth their while.

    To replace the $5.7bn tourism market we’d need about $100bn of property sales… that’s about 1/6th of our current housing stock.

    So we could fix this by selling the best 1/6th of the country (e.g. coastline + southern lakes) to the super-rich.

    Sorted!

    Comment by gazzaj — March 30, 2011 @ 1:21 pm

  19. @Sam #16 – I thought it was a Cinnabon(sp?)?

    Comment by Graeme Edgeler — March 30, 2011 @ 1:24 pm

  20. “Not the complete answer but it is possible to refine A1 jet fuel from biodiesel. The issue is as always were to get the biomass.”

    Well, there’s always the forest atop the national park land we’ll be digging up for coal … be good to have a use for that.

    Comment by Andrew Geddis — March 30, 2011 @ 1:35 pm

  21. The mega tourists being here for the beautiful vistas

    Comment by taranaki — March 30, 2011 @ 1:52 pm

  22. It’s all feeding nicely into Bill English’s austerity jones, isn’t it? We must all tighten our belts and not ask for pay rises, the economy is in dire straits, we’re all dooooooomed!!!!!! etc. Reminds of a man who was clearly an ancestor of English:

    Comment by Bearhunter — March 30, 2011 @ 1:54 pm

  23. “This trend will eventually lead to the arrival of MEGA-TOURISTS whose love” Yes! No, wait: these are the guys who pay $7000 for a single meal, right? Don’t we (i.e. you) hate them?

    “I suspect that air travel, jet or otherhwise, will become the preserve of the rich and governments” and NGOs, all off to the latest AGW conference.

    Don’t worry: the increasing wealth in the developing nations will increase the supply of, err, demand, if you see what I mean.

    Serious suggestion: what if part of the fun of getting to NZ was sailing ship? It’s green…
    (Or by mega yacht.)

    Comment by Clunking Fist — March 30, 2011 @ 2:00 pm

  24. Don’t we (i.e. you) hate them?

    Do I?

    Oh.

    Comment by Bed Rater — March 30, 2011 @ 2:46 pm

  25. I also quite like the idea of MEGA-HORSES their proud bodies leaping through the sea foam as their hooves squash whatever the fuck is on the bottom of the pacific ocean.

    Marvellous.

    Comment by Bed Rater — March 30, 2011 @ 2:48 pm

  26. Hooray, a transpacific tunnel!

    Comment by Sam Finnemore — March 30, 2011 @ 3:00 pm

  27. Where’s Think Big when you need it. The obvious answer is 6,400 km/h maglev trains in neutrally-buoyant submersed tunnels. It’s apparently already technically feasible, though the estimated of costs of US$25-50m per mile may be prohibitive…

    http://www.popsci.com/scitech/article/2004-04/trans-atlantic-maglev

    Comment by Nick — March 30, 2011 @ 4:45 pm

  28. the estimated of costs of US$25-50m per mile may be prohibitive…

    Not if we abandon Christchurch.

    Comment by gazzaj — March 30, 2011 @ 4:50 pm

  29. lollies

    L

    Comment by Lew — March 30, 2011 @ 5:27 pm

  30. Can we give tourists tax cuts? Only the rich ones, though. The poor ones can go fuck themselves.

    Comment by Dizzy — March 30, 2011 @ 5:43 pm

  31. Do I? Oh. Comment by Bed Rater

    Not you personally, probably. The comments on the following are hilarious.

    http://dimpost.wordpress.com/2011/03/20/on-the-other-hand-2/

    Comment by Clunking Fist — March 30, 2011 @ 5:58 pm

  32. Yeah, you get pretty funny on that one, CF. But people are laughing at you, not with you.

    Comment by Dizzy — March 30, 2011 @ 6:02 pm

  33. Dizzy @ 30 made me smile (casual or first time visitors may have been less impressed though).

    But then it made me think: what if the rich tourists fuck the poor? Like getting rid of your old carpet via trademe: why do it yourself when some other bugger will do the work for you whilst paying for the pleasure?

    Comment by Clunking Fist — March 30, 2011 @ 6:02 pm

  34. “32.Yeah, you get pretty funny on that one, CF. But people are laughing at you, not with you”
    While I was penning a comment in praise of your comment, you were penning one that hurt my feelings.

    – sniff -

    Comment by Clunking Fist — March 30, 2011 @ 6:04 pm

  35. I know, but if it helps, I’m still laughing at you.

    Hey, wait, tax rebates on prostitutes over $1000 a pop? That way the poor tourists can literally go fuck themselves.

    Comment by Dizzy — March 30, 2011 @ 6:09 pm

  36. The poor tourists can go to Thailand.

    For this plan to work, we’re going to have to legalise Blow.

    Comment by Phil — March 30, 2011 @ 6:19 pm

  37. But the unions will fuck it all up and the jobs (and tourists) will be exported to eastern europe.

    Comment by Clunking Fist — March 30, 2011 @ 6:24 pm

  38. I like this thread mostly for the electric zeppelins and transpacific tunnels, but seriously, I think international travel costs might hurt the locals wanting to go on holiday/to conferences than the majority of tourism to here. We seem to have a pretty good reputation abroad, and it already costs a pantload to fly here from the northern hemisphere. Maybe they’ll just cough up and go one star less on their hotel selection?

    Here’s a graph from MEDU for (year ended) Jan 2011, which shows that Australia is (unsurprisingly) still where most of our international visitors come from. Hard to tell which arrivals are tourists, which arrivals are business trips, which arrivals are Kiwis coming home for the holidays, but they probably all spend money.

    Perhaps I’m reading too much into that graph. It’d be interesting to see the equivalent graph for “international arrivals who end up in Queenstown for a week or more”.

    Comment by kim — March 30, 2011 @ 6:37 pm

  39. That thread is a perfect case study for examining The Absurdity of Arguing on the Internet, and it’s quite something for me to point that one out from a sea of millions (billions?)

    Comment by Bed Rater — March 30, 2011 @ 6:41 pm

  40. @kim, thanks for the graph. Can’t you just use the filter drop-down to see all those things? eg. Just under 160,000 Australian visitors are here for Business, and about 420,000 of the 1,100,000 Aussie visitors are coming to visit friends and relatives. I s’pose it’s still unclear how many friends&family visitors would be New Zealanders coming home versus Australians visiting expats living in New Zealand. My guess (based on nothing but a belief that there are far more New Zealanders in Australia than the other way) is it’d overwhelmingly be the former.

    Comment by MikeM — March 30, 2011 @ 6:54 pm

  41. @MikeM – whoops, thanks.. totally missed that.

    Comment by kim — March 30, 2011 @ 7:00 pm

  42. Annex the Pacific Trash Vortex and turn it into a floating causeway to Tamania

    Comment by ropata — March 30, 2011 @ 7:19 pm

  43. I also can’t seem to even get the abbreviation for Ministry of Economic Development correct. It’s been a long day.

    Comment by kim — March 30, 2011 @ 7:29 pm

  44. I’m wondering what the U could stand for, but as I’m not a very good right-winger (too morally liberal apparantly) I can’t think of anything clever.

    Comment by Clunking Fist — March 30, 2011 @ 7:35 pm

  45. They told you hanging out with liberals would make you go blind, CF

    Comment by Paul — March 30, 2011 @ 8:42 pm

  46. Jet A1 is just a kerosine, the hydrocarbon fraction that boils between 150 to 220C, mainly paraffins with sufficient isomerisation to remain liquid down to -47C ( jet stream temperatures at elevation of long-haul flights ), as planes tend to fall out of the sky when the fuel goes solid.

    There are various well-established options as making kerosine hydrocarbons, and jet engines can run on hydrocarbon fuels from gasoline to diesel, provided they are low in nickel, vanadium, sodium, potassium etc. Hydrogen is a good fuel for aircraft ( despite Hindenburg ), and new aircraft will be much lighter than current long-haul aircraft, and engines can be more efficient. The advantage of Jet A1 kerosine is safety, due to above-ambient flash point, water-immiscibility, and near-universal availability.

    If we want to keep using jet ( or HC engines, the fuel can be modified and global specifications introduced, as international aviation fuels now cover the globe, replacing regional fuels.

    Comment by Bruce Hamilton — March 30, 2011 @ 10:27 pm

  47. Meh, if it takes longer and costs more money to get here, people will stay longer, and only come if they have more money. That is what happened back when all the tourists came by boat after all, tourism’s been big here for a good bit longer than aeroplanes have existed.

    Also, lots of tourists on the big boats still, fuel prices are a small component there.

    Comment by tussock — March 30, 2011 @ 11:21 pm

  48. this is someting I think about a lot… I have sometimes wondered if we could work with Australia to do some kind of package deal? Where you could come to Australia, visit for 3 weeks, then get a boat (see dolphins etc), spend a few days travelling over the water and then have a week in New Zealand.

    But I think the kind of high volume, low period of time in NZ tourism which generates the most money for us will probably drop off. And I don’t know if there is an answer for this…

    Comment by LucyJH — March 31, 2011 @ 10:16 am

  49. Let us not forget that it was the Clark-led Labour Governments that spent a lot of money on getting our train system back to where it used to be. It’s still not there, but a good start was made.

    Comment by Betty — April 1, 2011 @ 12:59 pm

  50. It will take Mussolini to get them running on time. My dead grandfather talks fondy of those days.

    Comment by Clunking Fist — April 1, 2011 @ 1:17 pm


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