New Zealand’s 2025 tourism ambition is still in its infancy but Tourism New Zealand’s (TNZ) chief, Kevin Bowler, is reporting good progress. He tells Karen Yue what has been achieved so far
It has been a year since Tourism 2025 was first announced at TRENZ 2014. What has TNZ achieved so far in aligning its activities to the goals of the framework?
It is very important to first understand that Tourism 2025 is owned by the industry and co-created by the industry along with the government. It is unusual in that aspect as most tourism strategies are government-led. It is a good thing though, as we now have the private sector understanding that they need to own it and the framework will outlive political cycles.
What have we achieved? Firstly, to achieve the framework’s objectives, we need to maintain a growth rate of about six per cent, and in the last 12 months we’ve had about 20 per cent growth in international visitor spend and about 6.9 per cent increase in the number of visitors. We’re in pretty good shape.
One of the components of the framework is to foster air connections and that has been going very well. I think this is a chicken and egg situation. We have the demand so the airlines are supportive, and their support is in turn driving more demand and making airfares more competitive. We have seen great growth since the joint venture between Singapore Airlines and Air New Zealand.
Air New Zealand will add year-round services to Houston and Buenos Aires this December, so this air connectivity piece is going strongly for us.
The second component is to achieve high-value visitors, and our growth in value is exceeding our growth in volume.
Another component is visitor experience, and we are making headway in adjusting for new markets. Our China readiness focus for the industry is an example of efforts we’ve taken.
The fourth focus in the framework is productivity. We are emphasising the shoulder season now, which is a big change from what we’ve been doing. If we can increase demand during the shoulder season when there is excess capacity, we will increase productivity considerably. To achieve this, we are focusing on markets that have a lower high season profile. India is a great example: the peak travel season for Indian travellers to New Zealand is November to December and then April to May, which fits perfectly with our shoulder season.
We are also investing in MICE and special interest markets like golf and cycling, which tend to be outside peak (period).
The final point is the insights. There has been a big programme on improving market data but there’s still much to be done before we can come out and say we’ve got great insights.
Tell us more about what you are doing to get ready for China.
TNZ has been very active in running workshops around New Zealand to help operators understand the needs of the Chinese market – not just travellers from China, but those from other parts of Asia too – and what changes should be made in terms of food, language and activities.
The Chinese love shopping and they often say to us that the shops in New Zealand open too late and close too early. We are increasingly conscious about having to adjust that. We are also aware of the need to adjust food service that suits the Chinese. Here’s a good example: we are working with our premium golf courses to provide hot lunches because wealthy Chinese golfers like to have a little hot meal whereas New Zealanders will be quite happy to grab a sandwich.
The Hurun Report recently noted that young, wealthy Chinese prefer experiential travel and exotic destinations. This should excite TNZ since it wants to grow its value of tourism.
I must say that the rate of change in China is extraordinary. Five years ago most of our Chinese travellers came for low-value shopping trips, mostly on Australia and New Zealand itineraries.
We are getting a different profile these days although only a few of them are in the ultra-premium segment – less than two per cent of the business at our luxury lodges are from China.
Frankly, the expansion of our focus on high-end travellers hasn’t really extended to China. Where we are getting our value improvements from China is from longer-length stays and more travelling around the country. I think part of this is because the ultra high-end Chinese customer is still looking for traditional luxury accommodation as opposed to lodges which are more rural. New Zealand has a more rural perspective around luxury accommodation which may not be what everyone is looking for. Some of these lodges are very small, with only six rooms, quite different from a six-star hotel in the Middle East.
Our view is that our high net worth traveller market will develop and (our luxury lodges will) target travellers who like outdoor activities. Now we are still at the very beginning of that phase.
The other challenge we have (in attracting high net worth travellers) is that because these lodges are small, they sell out pretty fast. I’ve been informed that they are almost all taken for the next summer peak period, mostly by US visitors who really like this experience.
Wealthy Indians are also desiring the same. Are you seeing the same shifts in this market yourself?
Oh yes, a little bit more so for the Indian market. We are already catering strongly to the Indian market, especially the honeymoon segment which favours our luxury lodges. We are very encouraged by the results in India – we’ve almost doubled our Indian arrivals in the last five years.
We’ve just co-hosted the 2015 Cricket World Cup with Australia and that gave us a boost. Indians love cricket, and there are a number of New Zealand coaches in India. We have a little bit more of a cultural connection with India that way.
Which other Asian markets are top performers for New Zealand’s high-end travel segment?
Japan and Singapore. While these markets will remain strong, we feel that China will become a much more important source over the next five years.
Many Asian destinations are courting these source markets too. How will New Zealand stand out in the region?
New Zealand offers such different experiences from the rest of the region that we are probably more up against Africa or even South America. Africa’s luxury lodges and safaris, for instance, are the sort of products that we are competing with.
What drove the creation of TNZ’s Every day a different journey campaign and how does it serve the new framework?
It is an evolution of a campaign that has lasted for 16 years. 100% Pure New Zealand has a long history now and over the period of its life we’ve been able to continue to keep it contemporary and move messages to the opportunities we see. The most recent one was connecting New Zealand with Middle Earth. We had three years of emphasising how Middle Earth was 100% Pure New Zealand. We’ve been very successful. Of course, with the three movies all out, we needed to think what our next message would be.
Our research told us that a large number of people liked the idea of visiting New Zealand but there was quite a low level of awareness about the variety of things that could be experienced and as a consequence of that, we’ve done a campaign which emphasises the variety and diversity of activities one could do.
Our research has also found that different activities, places and things appealed to different key markets, and that drove the prioritisation of which ads are shown. They range from walking on ice glaciers, to swimming in subtropical beaches.
We use the line Every day a different journey to bring all that to life.
When you boil down the things that make New Zealand different from other parts of the world, two things stand out: diversity of activities and how easily accessible they are, and our indigenous culture.
Hence, the other part of our new campaign is to work closely with our Maori community to find ways to visually distinguish us from other destinations. We’ve worked with a Maori carver who’s carved our logo out of timber. The reproduction of our logo now comes from this wonderful piece of wood, allowing the grain to show up. The logo will appear on everything that we print and produce. It will be a lovely and more distinctive connection with New Zealand.
How is TNZ deploying this campaign to spread demand to shoulder season?
While we usually begin our media investments in September, this year we are running it from July to promote spring and autumn travel. In fact, 80 per cent of our efforts will now focus on the shoulder season. Previously, it was about 20 per cent.
I think it is the natural things that will also help us (achieve more footfalls in the other months). Prices will be more reasonable during the shoulder seasons and availability will be much better as well.
New Zealand is loved for its natural environment and rich culture. How does TNZ ensure that tourism development does not erode all that?
We have been fortunate there, as our arrivals are small compared to our land area. We have almost the same land area as Japan, four million inhabitants and about three million visitors. Furthermore, we have a strong legislative framework for protecting the environment. Expansion of businesses require a lot of permission, and a lot of care and consideration for the environment go into these decisions.
We are also a majority shareholder of a company called Qualmark, which deals in quality assessment of local businesses and issues the Enviro Award which encourages operators to accomplish a higher level of sustainability. We’ve had that programme for about seven years and are just reviewing it now. We may lift its standards further. We will know the outcomes of this review a year from now.
It is great that there are a lot of sustainability ambitions and aspirations in the industry. We are working very closely with industry players and getting excellent encouragement to continue to raise the benchmarks on sustainability.
How is the reconstruction of Christchurch coming along, and what other infrastructure developments are worth watching out for?
We are well into rebuilding Christchurch, but are probably four or five years away from restoring (its pre-earthquake) accommodation capacity. Once work is completed, Christchurch will be our most modern, most beautiful city.
Because of the nature of the earthquake, a lot of services that run underground such as storm water, sewage and electricity have taken many years to rebuild. We are only now starting on the buildings.
We are keeping the Christchurch airport operating at 100 per cent capacity so there is still a gateway to the South Island.
One of the biggest development to come is our convention centre in Christchurch, and that will stimulate the emergence of more hotels. It should be announced this year along with a completion date.
We have another convention centre in Auckland. It is in the design phase now, and will open in 2019 or 2020. It will have capacity for 3,500 people – the biggest that we’ve got at the moment.
