Mood of the Boardroom: Teasing tourists back into the country

The reconstruction of tourism is underway and is picking up speed. The industry lures international visitors back with a bit of teasing and a dash of Kiwi’s down-to-earth friendliness.

After a two-year Covid hiatus, the country has
Tourism Agency has supported the prestigious 100% Pure New Zealand brand with the launch of a new global campaign: ‘If You Seek’.

“When you relaunch your marketing globally, the temptation is to bombard consumers with all the many things to do in New Zealand,” says Rene de Monchy, Managing Director of Tourism New Zealand.

“We have taken a bold and creative approach to destination marketing to present ourselves differently from other countries and break through the competitive space for international visitors.
“We are very research and insight driven to understand what our individual visitors want and what we need to do for our destination. We can then make interventions that move the needle,” says de Monchy.

“We come from a zero base (of international visitors) and this is a fun place to be.”

Advertised digitally and on TV in key visitor markets, the If You Seek campaign teases audiences with snippets of what’s on offer and invites them to take the time to get more out of their visit.

The campaign features a series of short, artistic videos that showcase destinations, Maori culture and activities such as visiting Tane Mahuta in Northland, Hell’s Gate near Rotorua, the Great Taste Trail in Nelson and the nearby Hooker Valley from Aoraki Mt Cook show.

The videos inevitably end with a question or an unsolved “riddle” with an invitation to come along and find the answer. For example: “Kina. How does this New Zealand delicacy actually taste?

De Monchy says the campaign isn’t giving away the game to consumers. They are small insights into some well-known travel destinations and places and experiences that are not so recognizable.

“We want to spark the curiosity of our high-quality travelers, who we know are adventurous and love to dig beneath the surface of the places they visit, off the beaten track or not.”

De Monchy says there may be some misconceptions about high-value vs. high-value visitors.

“We deliberately speak of high-quality visitors, but we’re not just going after the wealthy folks. It’s a deeper insight than that. Visitor spend is just one of the metrics. We look at the level of activity, what time of year they come and their environmental awareness.

“Backpackers are quality visitors. They stay for longer periods of time, likely touring the country and getting off the beaten track. Indian holidaymakers like to travel in November and April, bringing quality to the sector outside the country’s peak season. It’s a mix of audiences that make up the high-value tourism sector.”

Franz Mascarenhas, Managing Director of Cordis Auckland, says that choosing one visitor over another is not a recipe for success and that New Zealand needs all segments of the business.

“We have the facilities, infrastructure and natural beauty to meet the demand required.

While the benefits of quality visitors are obvious, tourists are just as important as backpackers — not to mention they make up a significant portion of the workforce for tourism businesses that face severe labor shortages,” he says.

According to De Monchy, there are two buzzwords – meaningful travel and transformative travel – to fulfill consumer desires in the post-Covid pandemic. “You’re stuck at home, thinking about life. They want to get out of the cities, explore and enjoy the countryside and give it meaning.

“They want to engage with our culture and our people and treat our environment with respect. We’re in a great position to do that,” says de Monchy.

In the last two months, Tourism NZ has led three tourism missions to Los Angeles, London and Singapore involving nearly 200 tour operators and focused on incoming travel agents.

Tourism NZ also formed a joint venture with Air New Zealand, which began its direct service to New York on 17 September. They are promoting the If You Seek campaign in upstate New York and are making a special offer on flights to Auckland in the low and shoulder seasons, with the option to add a visit to one of Air NZ’s 20 domestic destinations.

The international visitors are returning. Stats NZ reported that in the first month since March 2020 (the start of the Covid pandemic) more than 100,000 overseas visitors arrived – 134,200 to be precise, coinciding with the school holidays in New Zealand and Australia.

This is just over half of the 255,600 visitors in July 2019. In April 2020 there were just 1734 international arrivals compared to 528,255 in December 2019. Annual arrivals up to that point were 3.88 million, going up to 52,665 by March last year return.

But annual visitor arrivals fell to about 480,000 in August this year, many of whom were visiting friends and family, but holidaymakers were picking up – particularly Australians heading to Queenstown’s ski resorts.

Retail, accommodation and transportation surprisingly accounted for 1.1 percent of gross domestic product in the June quarter, which grew 1.7 percent. The accommodation and catering services component increased by 30 percent.

Industry experts like de Monchy concede that it would take at least three years to return to the pre-Covid glory days, when the tourism sector was the No. 1 exporter with revenues of US$17.5 billion, or US$48 million per day of the country – and that’s still less than 1 percent of the global value.

In March 2021, international tourism spending in New Zealand fell 91.5 percent to $1.5 billion.

Airlines must return to full service in and out of New Zealand, the Chinese – one of the country’s key markets – must resume travel and cruise lines, which carried 322,000 passengers and contributed $570 million in revenue, must return to full steam ahead. All this should start next year.

It’s already happening in Queenstown. Glen Sowry, managing director of Queenstown Airport, says the ski season has got off to a flying start.

“The winter season is almost back to what it was before Covid. We quickly saw strong demand from Australia when the border reopened to them in May. The last four day Snow Machine Music Festival sold 5000 tickets in Australia.

“We are fortunate that Queenstown is considered a short-haul destination. I spoke to a Gold Coast skier who was visiting for 10 days. It had a 20 minute drive to the airport (Gold Coast) and a three hour flight drive to world class facilities.

“For him it was quicker, better and cheaper to come to Queenstown than to ski inland in Australia.

“That gives us a competitive advantage. But in the summer months, it will be a while before long-haul visitors return from the Northern Hemisphere,” says Sowry.

Air NZ Chief Executive Greg Foran says: “After the borders opened, the first wave of travel was with families and friends making up for lost time, but now we are seeing strength in the leisure market.

“The Tasmanian routes are very busy and we are seeing a lot of bookings from North America in the summer season. Whether this will last remains to be seen and combined with the impact of higher fares we remain cautious but remember we have yet to do so. I haven’t seen places like Japan and China come back into the mix.”

According to Foran, an estimated 60 million Americans are actively considering a trip to New Zealand, and more than five million of those are located near New York’s JFK airport.

“This is a huge market and we intend to push the East Coast of the United States heavily. We will continue to promote that New Zealand is open for business. Not everyone thinks we are.”

Grant Webster, chief executive of Tourism Holdings, which operates a fleet of motorhomes, says: “We are seeing good demand for the summer and early next year and people are responding well to price increases.

“The initial cost of motorhomes has gone up, almost double digits, and international visitors have missed out on the early bird discounts in the shoulder season because the border wasn’t open,” he says.

“We are optimistic about the tourism recovery, but we cannot take it for granted. We’re in a competitive environment — the Australian government, for example, has committed $60 million to restart tourism, Canada and the United States are spending heavily — and our sector needs additional funding.

“We need to open immigration settings and regulate labor supply and holiday visas. Much needs to be done to put New Zealand on the minds of people abroad.

“We have to compete with other countries by investing more,” says Webster.

take note of the government

Not surprisingly, in the Herald’s 2020 and 2021 Mood of the Boardroom surveys, tourism-focused CEOs were more pessimistic about the state of business in their industry than they are now.

Before Covid, tourism was New Zealand’s No. 1 exporter with annual revenues of US$17.5 billion, or US$48 million per day – still less than 1 per cent of the sector’s global value. But by March 2021, international tourism spending in New Zealand fell 91.5 percent to $1.5 billion.

Publicly traded Auckland Airport and Air New Zealand — whose revenues plummeted as border closures wiped out the international travel that underpins the tourism business — made successful fundraising efforts; Tourism Holdings sold assets.

In the CEOs Survey 2022, the CEOs of these companies are significantly more optimistic about the prospects for the industry.

But labor and immigration issues remain a handbrake, reports Graham Skellern.

– Fran O’Sullivan