Speech to Rotorua Tourism Industry Forum

Greeting

E te roopu tapoi o Rotorua, he mihi tenei ki koutou katoa
To you who are part of Rotorua’s tourism sector, I greet you all.

It’s great to be here today, where one of this country’s biggest industry earners has its roots. Rotorua is the birthplace of the New Zealand tourism industry.
Even today, Rotorua remains an iconic tourism destination offering classic and cultural experiences for the international and domestic traveller.
Rotorua is a place I am fond of, as my wife is from here, and we were married here in St Mary’s Church by Reverend Katene, just out of town at Horohoro.

Acknowledgments
I would like to acknowledge the Rotorua tourism operators and agencies in attendance today. Also the Mayor, His Worship Kevin Winters, my colleague Rotorua MP Todd McClay, Te Taru White CE of Te Puia, Chairman of Maori in Tourism Rotorua and Deputy Chair of the Tourism Industry Association, Oscar Nathan.  I’d like to acknowledge the other speakers who are involved in the industry update and panel discussion today, including Warren Hartford, Chairman of the Rotorua Tourism Board.  I’d also like to acknowledge Brian Henderson, Chair of the Inbound Tourism Operators Council, and Tourism Industry Association Board member, Donn Gunn GM of Destination Rotorua Tourism, and Tom Poata who began proceedings today.

Introduction
I’d like to start by saying how fantastic it is that Maori in Tourism Rotorua has brought together this forum with Destination Rotorua Tourism.  With the current issues occurring in the economy, this forum is very timely.  Also in terms of collaboration, Maori in Tourism Rotorua working together with the wider industry has benefits for the whole sector.  MITR has taken a lead in many of the Government’s initiatives to build the tourism sector, including the Maori Tourism Facilitation Programme, support for the Sustainable Tourism Charter, and I know Oscar has been a mentor and driver of the Tourism Upskilling Programme supporting the literacy and numeracy skills of the Rotorua tourism workforce. 

Government vision for tourism
I want to assure you of the importance this National-led government places on the tourism sector. The Prime Minister as the Minister of Tourism shows how seriously we take this sector, and how vital it is to the economy.  The government wishes to see the tourism sector sustain itself through difficult times and continue to grow as a driver of our economy.

Role of government in tourism
I thought I would start by quickly outlining the government’s role in tourism. The role of government in this sense is to: help create a positive policy and business environment that best facilitates economic growth, support well considered projects that maintain and grow the sector; develop an environment that supports a high quality sector; encourage supportive welcoming communities; and support the development of a capable and skilled business sector.  We deliver this primarily through the Ministry of Tourism and Tourism New Zealand.

The Ministry of Tourism’s investment into tourism in 2008/2009 is approximately $86.8million via Vote Tourism, of which, $73 million is for Tourism New Zealand funding.

Tourism New Zealand is a Crown Entity, responsible for marketing New Zealand as an international visitor destination. It owns and promotes the 100% Pure brand and provides information to visitors through the i-Site network. It also administers the Qualmark programme.

Maori in tourism
Competition is vital if NZ is to sustain itself through the current economy, recover, and grow.  Maori cultural tourism is going to play a very vital role in creating a point of difference for New Zealand as we navigate our way through the recession. After the environment, Tourism New Zealand has identified culture and in particular Maori culture, as the second biggest attractor for international visitors to New Zealand, offering a unique point of difference in a competitive global market. New Zealand was also ranked first in the “Authenticity” category of the 2008 Country Brand Index, relating to visitors’ experiences with genuine and unique cultures. This is significant given that this sector of the NZ tourism landscape is in my view relatively untapped. Imagine what we could achieve with more emphasis on Maori tourism.

International tourists are the most frequent visitors to Maori cultural tourism experiences. The Ministry of Tourism very conservatively estimates 567 000 adult domestic and international tourists visited a Maori cultural tourism attraction in 2005/2006, approximately 455 000 of whom were international. Research (from TMT) indicates that up to 45% of all international visitors intend to visit a Maori cultural experience, however only 6-9% book prior to travel with conservatively only 20% visiting an experience. And most of these visits are to the Rotorua area.

Whilst Australians are one of the largest groups to visit Maori cultural product (18%, second behind the UK 19%, they still have a low likelihood of visiting (estimated 11% of all Australian visitors in 2005/2006) there is opportunity to explore raising Australian awareness of and visitation to Maori product.

In contrast, approximately one in five hundred domestic trips between 2001 and 2006 included a Maori cultural tourism product so opportunity also exists to explore raising domestic awareness of and visitation to Maori product.
International travellers are highly satisfied with Maori cultural tourism experiences, particularly authentic experiences including Marae visits, cultural performances and art exhibitions.

However increasingly popular are experiences combining an environmental activity such as rafting or kayaking with authentic Maori cultural narratives. From the Government’s perspective, ensuring product quality and industry accreditation amongst Maori cultural tourism businesses is essential to building an international reputation, and gaining access to domestic international promotional opportunities.

Our Maori culture and history is something else which sets us apart from the rest of the world, an experience which our visitors can learn from and take away with them. Those of you who have travelled may have a sense of what I mean – we take photographs to remind us of the monuments, landscapes and sites we have seen but often it is the cultural experiences which remain in our memories forever.  We must capitalise on this.

Maori Tourism Mentoring Programme
Accordingly, the Ministry’s key Maori tourism initiative for 2009/2010 will be the delivery of the ‘Maori Tourism Mentoring Programme’ from this month - May 2009. The programme will provide tourism-specific assessment and mentoring support to businesses delivering Maori cultural tourism product. A call for interested businesses who wish to apply to receive mentoring will go out in early May. The 12 month programme commences in June.

The programme will help achieve many of the goals in the NZTS 2015, building the profitability, quality and sustainability of eligible businesses. It aims to directly help increase the number of Maori businesses with Qualmark accreditation, helping ensure quality Maori tourism products and services are better integrated throughout wholesale and retail distribution channels.  This will also help address two of the challenges facing the growth of Maori cultural tourism:

• raising awareness amongst visitors of the range and quality of Maori tourism,


• converting that interest into bookings.

 It differs from generic programmes in that it will focus on established businesses, on tourism specific needs and on cultural product quality and development. To avoid replicating existing services and to use resource most effectively, businesses with generic needs will be referred to existing programmes where possible.

TNZ - International Maori Tourism Showcase
Another significant Maori tourism initiative the government is supporting is the second Tourism New Zealand ‘international showcase’ of Maori cultural tourism products.  In 2008 a handful of Maori cultural tourism businesses travelled with TNZ to the USA to showcase their products, and Maori cultural tourism, to US tourism trade and consumers.  It was considered a very successful trip for the individual businesses, and in terms of raising the profile of Maori cultural tourism.  TNZ have again selected a small group of Maori cultural tourism businesses, and will travel to the UK and Europe for two weeks to again showcase those businesses, and profile Maori tourism.  They leave on Monday (4th May).

In a global sense, the New Zealand tourism sector has also made a unique step through incorporating indigenous principles of kaitiakitanga (cultural and environmental sustainability) and Manaakitanga (hospitality) into the NZ Tourism Strategy 2015. Understanding and incorporating these principles into all tourism business will enhance New Zealand’s position as number one in the Country Brand Index for unique culture and authenticity.  It helps provide our visitors with that something special to take away with them.

TNZ are also soon releasing a DVD for the tourism sector about kaitiakitanga, what it means, and how it can and is applied in the tourism sector.
So plenty to do but work is under way to capitalise on this very important sector within our tourism industry.

Strategies during economic downturn
Of course this is all very well, but the reality is that the world is facing an  that is unprecedented since the depression, and its impacting on our tourism industry. The economic downturn has caused a massive loss of wealth globally and we are seeing consumers change their behaviours accordingly.   Households across the western world are focusing on reducing debt rather than spending, and this is affecting demand to travel.  

We are seeing this in NZ with international arrivals down 3.9% for the year to March 2009.  However the shift in the timing of the Easter period from March in 2008 to April in 2009 resulted in fewer international visitors in March 2009, contributing to the drop in the March quarter.

Whilst the world has experienced adverse events affecting travel  before(recessions, 1987 share market crash, 1998 Asian financial crisis, SARS, 911), there has always been a surprisingly rapid recovery.  However previous events have not simultaneously affected the economies of all our trading partners as the current downturn is doing right now. The difference is the global reach of this situation.  This makes it difficult to predict which markets are capable of recovering, and what our recovery will look like this time.

As you know the government is committed to getting the country as a whole through this period.  The government has facilitated the Job Summit which delivered proposals such as the 9 day fortnight, implemented tax changes as part of our Jobs and Growth Programme that support small to medium businesses, and other initiatives to ease the burden on SMEs generally.

To provide a rapid snapshot of how the tourism sector is responding to the current downturn, the Ministry has established a monthly survey of operators, the Tourism Industry Monitor.   This asks how tourism businesses have performed in the past three months and how they expect the next three months will be. This is showing us that New Zealand tourism businesses have been quick to adapt to the current operating environment and are adjusting their businesses accordingly.

Swine flu

Adding to the uncertainty across the economy is the sudden arrival of the swine flu.  Not only is there concern about a possible worldwide pandemic, I realise that there is concern within the industry about how this might affect our tourism industry.
The New Zealand Government continues to manage the situation in a prompt, thorough and coordinated way that is appropriate to the current level of risk. The situation continues to evolve and officials are ready for any escalation in the domestic or international swine flu situation.

The problem with such an event is its effect on confidence, people are suddenly reluctant to travel.  Previous experience and responses to SARS and the avian bird flu earlier this decade mean that tourism related impacts are well recognised and prepared for.
The Ministry of Tourism (TMT), Tourism NZ (TNZ) and Tourism Industry Association (TIA) are also working with the Ministry of Health on a formal statement for the offshore travel trade' relating to the swine flu situation in New Zealand.  Also an information flyer is being prepared for international visitors in New Zealand on what to do if you’re a visitor and have concerns about the swine flu.

This will be distributed to Visitor Information Centres and through the Tourism industry association network.  TNZ are also monitoring responses from international media and travel trade through their international offices.

Strengths

• Despite the international economic situation, and the swine flu not withstanding, in the short term New Zealand tourism does have strengths:




• The New Zealand dollar has depreciated against most of our major inbound markets, increasing our competitiveness;


• Businesses are adapting quickly to stimulate travel activity, including offering competitive airfares on key routes, offering added value to current products, and some focused discounting on the part of operators;


• It may be tough for the airlines offering discounted fares, but it drives a lot of trans-tasman travel to you, over 31,000 over the Easter period alone


• New Zealand remains a highly desirable destination.  For instance New Zealand is still ranked seventh in the 2008 Country Brand world index which ranks the desirability of a country as a travel destination;  Australia was ranked number one.  New Zealand topped the ‘Natural Beauty’, ‘Authenticity’ and ‘Safety’ sections, and featured highly in others;


• The downturn is expected to stimulate domestic tourism, as New Zealanders decide to travel at home;  This is consistent with research just released by the Ministry of Tourism which shows that spending by domestic travellers increased by 6.2% to $8.1 billion in the year to December 2008, compared to the previous year.


• New Zealand is a small country that is able to respond and adapt quickly to adverse conditions.


• Considering these points, the most effective strategy in the medium term will be to ‘play to our strengths’:




• Continue to promote New Zealand’s 100% Pure brand;


• Target markets that are large, resilient, and also have growth potential, such as Australia and the domestic market; Visitation from Australia looks likely to remain steady in the medium-term, and will hopefully respond well to the new Australian marketing campaign (see below);


• Produce timely and relevant information and forecasts to support sector decision making through the current period;


• The ability to adapt rapidly, such as targeting new or strong markets, adding value to product offer (such as free breakfasts or other elements), discounting only where appropriate


• When the upturn comes we need to be prepared to take advantage, so we need to invest in quality product and staff as much as possible through this period.


• In March 2009 the Government also provided an additional $2.5 million for TNZ marketing in Australia.  On April 21 the Prime Minister launched the campaign.  Air New Zealand, who also contributed $2.5 million to the promotion, partnered with TNZ to promote winter activity and offer free domestic travel in return for every one-way direct trans-Tasman flight purchased from Air New Zealand during the promotion.


• Regarding the long term direction for New Zealand tourism, we should continue to build on our key attributes and strengths as expressed in the New Zealand Tourism Strategy 2015.  These include:




• Promoting and delivering on our 100% Pure brand and care for our environment;


• Building quality through Qualmark and industry accreditation and delivering quality experiences leading to visitor satisfaction and word of mouth recommendation;


• Create welcoming and distinctive regions and communities


• Lifting business performance through ongoing capability, skill and workforce development;


• Strengthen domestic tourism,


• Manage our infrastructure well;


• Strengthen and highlight our unique points of difference (including Maori cultural tourism);