How Hobbits Kick-Started New Zealand's Tourism Industry

The Hobbit film trilogy draws to a close at the end of this year, capping a 13-year span of Tolkien-inspired films by director Peter Jackson. The Hobbit and Lord of the Rings films, all shot in New Zealand, have been a big hit with fans, made money for Time Warner (NYSE: TWX  ) , which owns studio New Line Cinema and distributor Warner Bros., and boosted New Zealand's travel industry. There are plenty of Hobbit fans who want to, as New Zealand's official travel site puts it, "explore the real Middle-earth." Global vacation travel to New Zealand rose by more than 10% between January and November of last year. The jump in the number of American vacationers was even larger.

Hobbiton, Matamata, New Zealand. Photo: HJ Janisch

"We have seen an increase in visitor arrival numbers to New Zealand since the release of the first Hobbit movie. From January to November 2013 vacation arrival numbers from the U.S. into New Zealand are up 21.4% on the same period the previous year," said Gregg Anderson, GM Americas and Europe, Tourism New Zealand. The U.S. is the third largest market for New Zealand travel, after Australia and Germany, and Americans spend about $467 million (USD) in New Zealand each year. With the premiere of the last Hobbit film set for December of this year, the country's cinematic scenery will play to even more potential visitors.

This is good news for airlines that fly the US-NZ route, including United (NYSE: UAL  ) , American Airlines (NASDAQ: AAL  ) , and Alaska Airlines (NYSE: ALK  ) . And it's good news for hotels, local tour operators, and especially for sheep and cattle farmer Russell Alexander, whose picturesque land has portrayed "Hobbiton" in Jackson's films since 1999. Per Alexander's deal with Jackson and New Line, Hobbiton is has become one of the country's most popular tourist draws, featuring set and offsite filming location tours, farm stays, and destination weddings in Hobbiton itself.

Of course, there are plenty of film sets and locations all over America for movie buffs to visit, and New Zealand is pretty far from the U.S.—a minimum of a 9-hour flight from Hawaii or 12 hours from Los Angeles. So what's getting Americans from theaters onto planes?

Popular inspiration

The reach of Jackson's and Tolkien's work is huge. The first of the Hobbit films, The Unexpected Journey, grossed more than $1 billion worldwide. The second, The Desolation of Smaug, is still in theaters after its December release and has racked up nearly $250 million so far. Tolkien's book, first published 76 years ago, has been translated into dozens of languages and has sold more than 100 million copies, giving the stories worldwide, multigenerational appeal. The Lord of the Rings, which has been in print since the mid-1950s, has sold even more – 150 million copies, making it one of the best-selling books in the English language.

Smart Middle-earth marketing

Tourism New Zealand plays up New Zealand's Middle-earth status on a splashy landing page filled with film-location games, videos, maps, and a guidebook to Middle-earth sites that cleverly juxtaposes film stills with shots of visitors in the same spots. And because Jackson has made half a dozen Tolkien films here, there are plenty of places for movie fans to visit.

Timeless scenery, and lots of it

The large number of sites recognizable from the Hobbit and LOTR films is a nice piece of good fortune for New Zealand. Because filming locations are spread out from the top of the South Island to the bottom of the North, tourists are spreading their time and money among lots of different spots – and getting to see what else the country has to offer as they go. That's especially important with American visitors, who tend to be the most satisfied of all international travelers with their time in New Zealand, and therefore likely to encourage friends and family to check it out.

And because landscapes are a bit more permanent than movie sets, these destinations should appeal to visitors as long as the films and books do. Hobbiton's Alexander has said he expects the set on his property, complete with Hobbit holes and the Green Dragon Inn, to last at least 50 years. That durability is a good thing. The Hobbit: There and Back Again, is set for U.S. theatrical release in December, which will almost certainly spark a fresh wave of interest in Tolkien travel.

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