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Special interests, like wine tasting at Gibbston Valley Wines, are increasingly being combined with holidays. Picture: Destination Queenstown
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Tourism operators will face some major challenges in the next 12 months, according to TIA Acting Chief Executive Oscar Nathan.
"We face growing international concerns over climate change, combined with slowing economies in some key markets, including our own, the US elections and increased competition from numerous international destinations, " he says.
Tourism is very fashionable and destinations come and go. New Zealand fails to rate a mention in the New York Times '53 places to go in 2008', which rates Laos as number one, he says.
“Operators should be planning to face three separate scenarios – their conservative growth forecast (or default to the official industry forecast of 4% growth), no growth and a downturn. Indications are that summer has been flat in terms of visitor numbers and revenue."
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The World Economic Forum’s (WEF) Travel & Tourism Competitiveness Report 2008 places New Zealand nineteenth out of 130 countries for the international competitiveness of its travel and tourism industry. The report measures the factors and policies that make it attractive to develop the T&T sector in different countries.
The report says Switzerland, Austria and Germany have the most attractive environments for developing the travel and tourism industry. Australia reaches fourth place.
WEF senior economist Jennifer Blanke says the top-ranked countries demonstrate the importance of supportive business and regulatory frameworks, coupled with world-class transport and tourism infrastructure and a focus on nurturing human and natural resources.
The report put a strong focus on environmental sustainability to reflect tourism’s dependence on the quality of the natural environment.
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| Travel and tourism regulatory framework |
15 |
| Policy rules and regulations |
11 |
| Environmental sustainability |
24 |
| Safety and security |
11 |
| Health and hygiene |
27 |
| Prioritisation of travel and tourism |
38 |
| Travel and tourism business environment and infrastructure |
26 |
| Air transport infrastructure |
10 |
| Ground transport infrastructure |
50 |
| Tourism infrastructure |
34 |
| Information and communications technology infrastructure |
21 |
| Price competitiveness in the travel and tourism industry |
68 |
| Travel and tourism human, cultural and natural resources |
17 |
| Human resources |
21 |
| Education and training |
21 |
| Availability of qualified labour |
33 |
| Affinity for travel and tourism |
34 |
| Natural resources |
28 |
| Cultural resources |
33 |
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Internationally, the tourism industry can expect a slowdown in 2008, but prospects are bright for the coming decade, according to World Travel & Tourism Council (WTTC) research.
Its Tourism Satellite Accounting research forecasts a moderate impact on the tourism industry as a result of the global economic downturn, with its annual growth rate slowing to 3% in 2008, compared with 3.9% last year.
It says that world travel and tourism will generate almost US$8 trillion in 2008. This is expected to rise to about US$15 trillion over the next 10 years as tourism enters a “mature but steady phase” of growth, averaging 4.4% a year.
WTTC President Jean-Claude Baumgarten says challenges come from the US slowdown and the weak US dollar, higher fuel costs and concerns about climate change.
“However, the continued strong expansion in emerging countries – both as tourism destinations and as an increasing source of international visitors – means that the industry’s prospects remain bright into the medium term.”
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Visitors go bird-watching at Opoutere. Picture: Any Belcher/Tourism Coromandel
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Retiring baby-boomers, enjoying Dunedin’s albatross colony. Picture: Tourism Dunedin
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Growing concern about climate change: travellers are becoming more concerned about the potential consequences of climate change and the environmental impacts of travel. They will be seeking sustainable accommodation, tours and experiences.
Shorter trips: Work pressures and the growth in budget airlines with bargain short-break fares mean more people are taking trips of a week or less, rather than longer holidays.
Volunteering: Increasing numbers of travellers want to help out and get involved by doing volunteer work on holiday, whether it’s building orphanages, planting trees or helping save endangered species.
More internet research: growing numbers of travellers are using the internet to research and/or purchase travel. Good websites with real-time booking capability are a must for tourism businesses.
Food, wine and other special interests: Holidays are being combined with personal passions and hobbies, whether it’s food and wine, golf, gardening or culture.
Baby-boomers hit the road: Retiring baby-boomers, with the time and money to travel, are a growing market. They are demanding high quality, personalised experiences with more ‘soft’ adventure and culture.
More solo travel: Falling marriage numbers and growing divorce rates will see more singles looking for holidays. They will be looking for personalised packages to suit their individual needs.
More family travel: More families are travelling together, and bringing the grandparents along too.
Sources and more information:
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International visitor arrivals increased by just 1.8% to reach a record 2.47 million in 2007. However, this was 0.8% lower than the Ministry of Tourism’s forecast growth for the year.
In the global context, New Zealand’s performance was below that of world tourism. The UNWTO’s provisional estimate for world international tourist arrivals in 2007 was a growth of 6.1%.
The average length of stay in New Zealand decreased slightly (by 0.2 days) to 20.2 days.
Visitor growth in 2007 was driven chiefly by Australia (up 46,700 or 5%) and China (up 15,100 or 14%). Australians now comprise 38.5% of total visitors to New Zealand.
The major decreases were in Japan (down 14,700 or 11%), South Korea (down 11,900 or 11%) and the US (down 9600 or 4%). Reasons behind the decline in some Asian markets include:
- increased competition for tourists within Asia and other regions
- the high New Zealand dollar
- limited direct aviation capacity
- changing demographics (such as an ageing population in Japan) and
- recent restructuring of the commission scheme for the South Korean market that makes travel packages significantly more expensive.
In 2007, VFR (visiting friends and relatives) and holiday visitors accounted for 83% of the increase in visitors.
Outbound travel by New Zealanders grew by 6.2%, reaching a record 1.98 million trips. At the same time, domestic travel increased significantly with total expenditure of $7.96 billion, up 10.4% for the year ended September 2007.
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All figures for year ended December 2007 unless otherwise stated
International arrivals: 2,465,680 (up 44,119 or 1.8%)
- Australia 950,206 (+ 5.2%)
- UK 292,717 (-0.7%)
- USA 216,027 (-4.3%)
- Japan 121,652 (-10.8%)
- China 120,804 (+14.3%)
Purpose of visit
- Holiday 1,211,040 (+1.3%)
- VFR (visit friends and relatives) 712,954 (+3.3%)
- Business 267,875 (-0.8%)
Average length of stay: 20.0 days
Domestic tourism (year ended Sept 2007)
- Day trips 29.4 million
- Overnight trips 15.5 million
- Total nights 45.3 million
- Average spend per day trip $94
- Average spend per overnight trip $336
Tourism expenditure (year ended March 2006)
International $8.3 billion
Domestic $10.3 billion
Total $18.6 billion
- Average expenditure per day $138
- Average expenditure per trip $2829
- Tourism accounts for 19.2% of New Zealand’s total export earnings
- Tourism contributes $12.8 billion or 8.9% to New Zealand’s total gross domestic product (GDP)
- Tourism supports 183,100 full-time equivalent jobs (9.9% of New Zealand’s total workforce
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“Build it and they will come” is a concept that might work in the movies but rarely in the real world.
You might have an excellent tourism business but you still need to tell potential visitors about it.
Your marketing plan will also help you decide in advance where to spend precious marketing dollars. Random advertising when things get a bit slow will not be effective.
Look at the year in advance, and map out when and how you will promote your products to get maximum exposure with available funds. To be effective, your marketing plan should cover:
- Your objectives or desired outcomes
- Where you differ from your competitors
- Who you are targeting – by country, type of travel (e.g. independent, tour, visiting friends and relatives)
- The strategy you will use, i.e. what you are going to do to make wholesalers and/or prospective customers aware of your operations?
- The tactics you will use, i.e. how you will make them aware, the key messages you will use
- A plan for implementation, including any product enhancements
- A timeline of when it will happen
- A budget for the period
- A process to measure the effectiveness of your marketing.
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Advertising, brochures, guide books, the internet and media exposure are the main channels you are likely to use to showcase your product to potential customers.
Visitors and the travel trade are exposed to a wealth of information, and you want your business to stand out from the rest. Your marketing material should reflect the quality of your business – low quality images, out-of-date information and cheap production will not create a good impression.
Focus on your unique selling points in your advertising and promotional material. Tell people why they should choose your business instead of your competitors’.
Promote your quality accreditations (e.g. Qualmark, Green Globe, TIA membership) and your achievements (e.g. Tourism Industry Awards).
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Before you advertise, think of who you are trying to target and which marketing medium they are most likely to use. Your target market could include:
- Free, independent travellers (FITs)
- Domestic travellers
- International visitors (any markets in particular?)
- Corporate, convention and incentive groups
- Special interest groups
- Visiting friends and relatives (VFR)
- Retired travellers
- Backpackers
- Luxury travellers.
Do your visitors plan ahead and do research before they arrive? A good website is vital, along with links to other tourism sites like http://www.newzealand.com/ run by Tourism New Zealand, or your local regional tourism organisation (RTO). An expert can help your site get well-positioned in search engines like Google or Yahoo.
Other websites you could investigate listing on include your local regional tourism organisation (RTO), Jasons, AA Travel, New Zealand Tourism Online, Travelbug or Wotif. Make sure the sites have a real-time booking system sitting behind them, so visitors can book rooms, activities or tours on the spot.
On the other hand, if your target market is likely to make spontaneous decisions, getting your brochures into your closest i-SITE visitor centre, local retailers and accommodation providers could be the best way to encourage business.
Tourism New Zealand's target market, the Interactive Traveller®, tend to use websites, guidebooks such as Lonely Planet, Rough Guide and Frommers, and travel agents to help plan their trip. Once in New Zealand, they are also high users of i-SITE visitor centres.
is still the most powerful marketing tool. It’s the cheapest and often the most effective way of getting your message across. The only way to create good word of mouth is to deliver consistently high quality experiences, so your customers rave about their time with you.
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Air New Zealand won the tourism marketing award at the Tourism Industry Awards 2007 for its launch into the Shanghai market. The campaign included blogs by Chinese celebrities about their visits to New Zealand, to create word of mouth demand, as well as more traditional print advertising.
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- Give it 100% – an introductory guide to marketing and developing your tourism product http://www.tourismnewzealand.com/
- Tourism in Action CD, available free to TIA Members. Email info@tianz.org.nz
- Case studies in environmental sustainability, marketing and sales, a DVD produced by TIA, available to TIA Members for $17 each. www.tianz.org.nz for more information
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Marketing is crucial to the success of award-winning 4WD specialist Nomad Safaris of Queenstown.
“Tourism is competitive and you have to set yourself apart,” say operators David and Amanda Gatward-Ferguson. “Don’t think those customers just arrive on your doorstep. You must know where your customers are coming from.”
International visitors comprise the majority of their customers. But they stress the importance of the domestic market, particularly over the Christmas-New Year period when fewer North American and British travellers are in the region.
The conference market is important in boosting low season business.
However, their marketing plan also considers the bigger picture.
“Us being busy alone isn’t good because we could be vulnerable – the whole town being busy is key to our success,” David says.
Nomad Safaris’ participation in the annual Arrowtown Festival is a good example of marketing on several levels, he says.
“It doesn’t directly grow business but it’s part of being involved in the community. We get a huge amount of influence and kudos from being involved as a sponsor. We pick up litter for ‘environment day’ during the festival – it’s surprising how much people remember us through that activity so indirectly it’s fantastic for our marketing.”
For more information on Nomad Safaris approach to marketing, see TIA’s DVD Case studies in environmental sustainability, marketing and sales. See www.tianz.org.nz for more information |
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Picking up litter is part of Nomad Safaris’ marketing efforts.
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