Latest TIA Blog

Happy New Year! After a roller coaster 2009, let’s polish off the crystal ball and look at some of the key trends likely to impact on our industry in 2010. 

Late booking momentum

The trend for late bookings which gained momentum in 2009 shows no sign of abating, making forward planning difficult. While last year operators had to deal with the double whammy of dramatic drops in visitor arrivals from some of our major markets as well as late bookings, this year we can at least expect arrival numbers to improve.

Food for thought - what will 2010 bring for the tourism industry?

Growth returns

The worst of the global financial crisis appears to be over, swine flu hasn’t packed the punch some feared it would, and as consumers feel increasingly confident they’ll start travelling again in growing numbers. Arrivals are forecast to increase by 2.5% this year and by a healthy 6.5% in 2011 as the world emerges from the economic doldrums and New Zealand welcomes an estimated 60,000 visitors for the Rugby World Cup.

Discounting risk

2010 marks the beginning of a new decade and it’s going to be very much the era of the deal. Consumers know the bargains are out there and they know how to find them via the likes of Twitter, blogs and websites that do all the hard graft for them, offering last minute deals (sometimes just hours before departure), with incredible savings on transport and accommodation. It’s critical New Zealand businesses don’t buy into heavy discounting as a marketing tactic. It’s a short term, unsustainable fix and runs the risk of New Zealand ultimately being perceived as a bargain destination. Our focus should be adding value to the visitor experience rather than cutting prices.  

Social media explosion

Online marketing and social media will continue its explosive growth and influence. If you’ve been reading T-Mail you’ll know some of the mind boggling statistics¹  – 100,000,000 YouTube videos viewed per day, 3,600,000,000 photos archived on Flickr.com, 5,000,000,000 minutes spent on Facebook each day. In September 2007 Twitter had 533,000 active members in the USA - in September 2009 that figure was 44 million!²

Savvy operators will be using these dynamic communication tools to engage with consumers, promote products and services, broadcast special offers, and monitor what’s been said about them – and respond when necessary. They’ll also be encouraging visitors to blog, post photos, tweet and write online reviews about their great Kiwi holiday experience. 

Competition hotter than ever

Competition for the visitor dollar is going to be hotter than ever in 2010 and operators need to give themselves every advantage. Travellers are always looking for the new, hot destination, and keeping New Zealand’s offering fresh and exciting is vital.

This is particularly important when some markets are really ramping up their focus on tourism. The Chinese government, for example, has announced it intends to develop tourism into a strategic part of its economy and is investing in new infrastructure and training, as well as opening the industry up to the private sector. The USA is planning to amass a war chest for its tourism industry to play with via the introduction of a travel tax.

Sustainability scrutiny

While the world put sustainability onto the backburner to some extent in 2009 given the more pressing financial woes, it’s set to rebound in 2010. We need to be prepared for more scrutiny of our industry and New Zealand Inc’s environmental performance.

There’ll be a renewed focus on air travel and carbon emissions and we can expect more so called ‘green taxes’ such as that imposed on travellers from the UK, introduced ostensibly to help pay for the environmental costs of air travel. That tax is set to rise again in November with the biggest impact on long haul travellers but with no evidence the money collected is being used for its said purpose.

On the positive side of the sustainability equation, many of the things operators can do to improve environmental sustainability, such as introducing energy efficiency measures, give them a marketing advantage and save them money (as well as being good for the planet).

Marketing collaborations

One of the highlights of 2009 was the Government’s announcement it would invest an extra $20 million into marketing New Zealand internationally this year - something TIA had advocated for strongly. Tourism New Zealand says much of that money will be focused on four key markets – Australia, UK/Europe, China and the USA, with $5 million earmarked for joint venture marketing with the private sector and Regional Tourism Organisations.

TIA thinks JV funding partnerships – led by Tourism NZ under the 100% Pure New Zealand banner – are crticial if we are to maximise the impact of our marketing investment and attract more visitors. We saw how well it worked in Australia early last year. 

Air capacity challenge

Air capacity will be one to watch in 2010. New Zealand is an island nation remote from the world, so air capacity and quality air services are vital to our success as a destination.  What’s happening in Australia is also important due to the dual destination travel patterns of many visitors.

Increased air capacity between other markets (e.g. Australia and the USA) may present challenges for New Zealand in 2010. The new code-sharing agreement between Air New Zealand and South African Airways offering a one-stop service between Auckland and Johannesburg is one of the bright lights on the air capacity front, along with Auckland Airport’s recent announcement of its planned investment in North Queensland Airports, the operator of Cairns and Mackay airports in Queensland. 

Volatile Kiwi

The elephant in the room in 2010 has to be the New Zealand dollar. How high or how low it will go is beyond the capacity of this crystal ball to predict. Inevitably, the higher it goes, the less competitive Destination New Zealand becomes. That can mean consumers decide on another more affordable destination, or still come but spend less while they’re here.

All we can continue to do to offset the volatility and uncertainty around the dollar is offer an outstanding quality and uniquely New Zealand visitor experience. And that’s something well within our control and capability.