Larger Venues Needed to Secure More Top Spenders

PRESS RELEASE

Larger Venues Needed to Secure More Top Spenders

Auckland, New Zealand 9 October 2007: New Zealand is reaping the rewards by attracting high spending top end travellers to the country but could do even better if it had bigger meeting venues.

“We need bigger venues in the main centres to attract incentive groups of more than 500 to New Zealand,” says Alan Trotter, CEO, Conventions & Incentives New Zealand (CINZ). “These groups are high spenders and the money they inject into the country is huge and it’s a market that we are currently missing out on because we simply can’t accommodate them.”

Incentive travel is term used for top achievers who are rewarded – or their clients are – with a luxury travel experience and is a big earner for New Zealand. It is estimated to reap a cool NZ$85 million a year. A figure that Mr Trotter says could increase significantly with larger meeting facilities.

Mr Trotter is commenting on a report commissioned by CINZ, and researched by Horwath HTL, into both New Zealand’s inbound and outbound incentive business that shows the country has etched itself a nice corner of the incentive travel market, with most groups coming from Australia, Japan and the United States in recent years. Australians are attracted here because of the close proximity, while Japanese and Americans come to New Zealand primarily to see the scenery.

While they are here gala dinners, Maori cultural performances and winery visits feature as the most popular activities. Community interaction is also becomingly increasingly important, especially with American groups.

In 2005 incentive travel reaped between NZ$95 and $115 million dollars into New Zealand, although this was expected to drop off in 2006. The money was spent on food and beverages ($100 per day, per person), accommodation and activities and attractions ($100 per person, per day).

“The incentive market is lumpy in nature and annual market size can be significantly skewed by one or two large groups that have high daily average expenditure,” says Mr Trotter. “Taking this into account the estimated size of the market in a typical year is more likely to be between NZ$70 - $80 million, with $85 million about the average.”

The report revealed that top end visitors to New Zealand are keen to mingle with the locals and leave a positive footprint while their Kiwis counterparts are looking for luxury and pampering when they head overseas.

“In saying that visitors still expect a complete high end experience while they are here – accommodation, food, service and activities,” says Mr Trotter.

New Zealand’s positives include scenery and landscape and uniqueness while minuses include cost of airfares to get here, distance and lack of quality hotels and operator infrastructure.

“New Zealand needs to focus on new air routes and capacity and investment in our accommodation and top end hotels and activity offerings to increase the appeal to inbound incentive groups,” Mr Trotter says.

But it isn’t all one way traffic. New Zealanders also travel out of the country on incentive travel with construction and manufacturing companies topping the outbound group numbers.

The most popular destinations to travel to are the Pacific Islands and Australia with Asia becoming increasingly popular. Direct flights play a major part in selecting a destination and with new direct flights to the likes of Shanghai and Vancouver these destinations are expected to increase in popularity. The value of the New Zealand dollar also influences the choice of destination.

Kiwi groups are also looking for somewhere warm, with a short travel time and minimal security risks. The infrastructure (quality of hotels) and range of activities available are also important.

A mix of incentive houses, destination management companies and hoteliers from around New Zealand were interviewed for the research report. The report was funded by the USA based Incentive Research Foundation.

ENDS

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