Accommodation providers facing a large decline in occupancy rates this year are urged "not to panic" by starting a price war, a hospitality spokesman warns.
"We are clearly faced with a downturn in the tourism industry and we are encouraging the industry not to panic, to keep calm, and to resist the urge to discount prices," Hospitality Association of New Zealand chief executive Bruce Robertson said.
The industry should compete on value and not price or "everybody will be worse off", he said.
As competition for a declining number of tourists increased, the accommodation suppliers should not drop prices and risk damaging the whole sector.
While the domestic market was holding up well, international tourist numbers had impacted on occupancy rates.
"Across the board, we are hearing numbers are 10%-15% down."
While the summer period was usually the busiest time for accommodation providers, double digit declines in occupancy rates meant many in the sector were increasingly concerned about managing quieter "shoulder periods", he said.
"There is some concern out there how the April-to-winter period and beyond is shaping up."
With the long-haul tourism market collapsing, accommodation providers were increasingly looking towards the Australian and domestic market to offset lower occupancy rates.
"But we have to be optimistic."
Encouraging domestic tourists to explore the country was one way to alleviate pressure on the tourism industry.
"We want New Zealanders who have been contemplating holidaying overseas to holiday here," he said.
Millbrook sales and marketing manager Sarah Stacey said Australian and domestic tourists would become increasingly important for the resort as it looked to lessen the impact of the decline in international visitors.
Occupancy rates at the resort were consistent this summer as people honoured bookings, but there was less confidence going into the shoulder season - May to June, she said.
Despite Tourism New Zealand picking a reduction of up to 20% in the number of arrivals from long-haul destinations this summer, accommodation providers should not start a price war, she said.
"When people get panicky about visitor arrivals, there is a tendency to drop prices - no-one wants that."
