Issues & Trends – June 2010
Tourism NZ gets Key to funding increase, faces pressure to deliver result
New Zealand Prime Minister JOHN KEY has taken personal responsibility for tourism, overseeing big increases in Tourism New Zealand’s marketing funds. In an exclusive interview with travelBulletin’s Lee Mylne, he talks about ensuring TNZ delivers value for money, plans for winning additional Australian market share, increased emphasis on digital marketing and moves to harmonise trans-Tasman border controls.
DIRECT and easy access to the head of Government may be a dream for most countries’ tourism industries. For New Zealand’s industry, it is a dream come true following the election of John Key’s National Party government in November 2008.
In a move that delighted industry players, Prime Minister Key gave himself the tourism portfolio and has become the champion of the $NZ21.7 billion industry.
“I didn’t take it on lightly,” he told travelBulletin in an interview during TRENZ 2010.
“Tourism has been under-cooked by previous governments, and it was an acknowledgement of the significance and importance of tourism to New Zealand and its economy.”
While he says he “wouldn’t swear to it”, Key believes he may be the only Prime Minister of any country ever to hold the tourism portfolio.
It’s a role, he says, that allows him to raise the industry’s profile both domestically and internationally (with the assistance of Associate Minister of Tourism, Jonathan Coleman).
The move has also added clout to industry appeals for more funding. In last month’s New Zealand Budget for 2010/11, tourism was one of the few areas to get an increase – a total of $NZ30 million, most of it earmarked for international marketing.
The additional funding builds on last year’s increase of $NZ20 million and takes the country’s total tourism budget to just under $NZ100 million.
But Key has warned Tourism New Zealand that future increases will only come “if they demonstrate using the money wisely”. To ensure that’s the case, he has required Tourism New Zealand to develop a three-year marketing plan – and made it plain he expects results.
“We are holding their feet to the fire to make them deliver. It is a useful technique,” he said.
The funding includes $NZ5 million towards joint venture projects with New Zealand’s eight regional tourism organisations (RTO) to sell the destination to Australians – New Zealand’s largest tourism market.
The RTOs will match the funds, creating an “unprecedented’’ $NZ10 million marketing campaign aimed at attracting Australian visitors.
Key says the money will “help build market share in areas we know we need to spend more money”.
Tourism New Zealand’s new three-year marketing strategy “fundament-ally changes” how it reaches potential visitors, with a “substantial increase” on digital technology and online marketing, he said.
“We are not discounting traditional mass media, but digital marketing is very cost effective and allows us to reach huge markets like China and the US with limited funding.
“This investment is vitally important. It reflects my confidence in the industry to substantially increase the value of tourism to the New Zealand economy.”
Last September, while in New York, Key appeared on the Late Show with David Letterman, delivering a humorous “Top Ten Reasons You Should Visit New Zealand”.
He cites it as an example of the reach of digital media: while four million viewers watched the show on free to air network television, online coverage is estimated to have reached another 75 million people.
Key said marketing will focus on high-value visitors looking for a high-quality experience in New Zealand.
Smoother access for trans-Tasman travellers is also likely as Australia and New Zealand work together to make travel between the two countries “as painless as possible”, he said.
More than one million Australian residents travelled to New Zealand last year, with the number of New Zealanders travelling to Australia only slightly less.
“We are working closely with Australia to harmonise our trans-Tasman border experiences,” said Key.
The introduction of SmartGate e-passport access to clear customs and immigration at Auckland International Airport (to be followed by Wellington and Christchurch before the end of the year) has been a big success, he said.
Work is also under way to introduce SmartGate into the departures process, with Auckland airport likely to have that facility before the end of this year.
While he said a return to passport-free travel between Australia and New Zealand might be “difficult to achieve”, it could not be ruled out as the two countries move towards greater integration.
Niche markets from Australia will be important targets for the New Zealand tourism industry’s marketing efforts, with the luxury market a growing sector, Key said. “Apart from the VFR market and sporting events – such as skiing, golf and events such as the Rugby World Cup – what we are also seeing is the emergence of a larger group of young affluent Australians coming for adventure tourism.
“There has been tremendous growth overall from Australia, and there are lots of reasons for that growth – it has been a long-term upward trend.
“Affordability and price are very important factors, and the more capacity and competition in travel to New Zealand, the better.”
Key says he believes it is possible to grow the tourism sector – which already contributes almost 10 per cent of New Zealand’s gross domestic product and 20 per cent of its exports – over the next five to 10 years.
He intends to continue playing a major role in that growth.