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How the Kiwi Dollar affects International Travel

Posted on May 13, 2014 by

It’s no secret that the strength of the New Zealand dollar is having a direct influence on international air travel.

We have been experiencing a particular surge in travel to both the United States and Australia which certainly goes hand-in-hand with the strength of the NZD against the USD and AUD. Both destinations have reported a booking increase year-on-year.

But some of the deals out there are staggering.

The dollar, combined with the cost of international travel continuing to drop, has had a significant impact on the leisure travel market in particular. In some cases, we are seeing packages for Melbourne and the Gold Coast between 12 and 24 per cent cheaper than in 2012.

For a family of four, this can be savings of more than $600 and then with the favourable exchange rate, they have more money once they arrive for costly activities such as theme parks and eating out.

Increasing business and consumer confidence is up both globally and locally with the Global Business Travel Association reporting a growth of seven percent. The New Zealand market has become increasingly competitive, not just with airline competition and alliances but also with favourable oil prices and a strong dollar offering an even better return for airlines. This has helped to increase supply which benefits Kiwi travellers with cheaper airfares.

We’re seeing airlines offering very competitive pricing in the local market and in some cases this is the best pricing that has ever been available in New Zealand.

For the business traveller, travel is usually a necessity but benefits can be realised by capitalising on a highly competitive travel sector. In some cases we’re seeing business clients increase their international travel due to affordability, and the dollar is acting as a stimulus for organisations that are on the cusp of making decisions about hosting or attending international events.

A perfect storm has hit international travel prices for Kiwis – and the smart ones are taking advantage of it.