Tue, 24 Aug 2004

New Zealand Tourism Conference 2004

Mark Burton's speech to open the 2004 Tourism Conference held in Taupo.

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There are a lot of great things about being Minister of Tourism-too many to list. I'm Minister of Tourism in the most beautiful country on the planet, with world-leading tourism products and activities in virtually every region. In fact, there's really only one downside-Carol and I seldom have time to go on holiday in the many great places I see and visit as Minister!

I can't really complain, however, given the sector's incredible achievements. New Zealand has emerged as a true international success story over the past four and a half years, going from strength to strength in the face of some very significant challenges. But to be honest, it doesn't surprise me at all. In my time as Tourism Minister, I've had the privilege of meeting many of the people who have made New Zealand one of the world's most sought-after, premiere destinations. Our industry leaders are true innovators, who have given us world-leading experiences. We have them in environmental tourism, in adventure tourism, in fine wine and food, in fashion, in culture-we have them at every level.

They are courageous enough to know what New Zealand does well, but also to know what should be left to others. They are ambitious enough to hold their nerve, and they never deviate from their commitment to quality.

People are at the heart of New Zealand's tourism success. The way we host-the way we make our guests, and I use the word guests advisedly - feel truly part of New Zealand-is just as important as the special experiences and products we offer. And with our talent for hospitality, how could we not succeed?

Now as I said - we don't get time for many holidays- but we have been on a short break recently-our first in quite a while. Carol and I spent three nights at the Bay of Many Coves in the Marlborough Sounds. It was, not to put too fine a point on it, absolutely outstanding-and not just because I was completely out of cell phone range!

When we first arrived, two young women who had travelled in with us by water taxi , and who had obviously just been hired, were getting an induction from the manager. They were having a good talk over very good coffee, and, while everyone was clearly focused on the task at hand, they were relaxed, happy, and enjoying the process.

Later on, Carol and I saw the manager with them again, not only taking them through the room cleaning procedures, but doing it with them.

That evening, we saw the two young women again, this time in the dining room. But they weren't serving-the manager was serving them, showing them the level of service that their guests would expect. And let me tell you, those two were having the best meal of their lives, as well as the most effective customer service lesson possible.

The manager told me later that each new member of staff works through training blocks and that each one learns every aspect of service. Her staff put customer satisfaction at the heart of the business, and I'm telling you-it shows.

This is an example of the level of dedication I am seeing across the sector. And let's be clear this is exactly the level of dedication that will keep New Zealand a world leader in tourism.

The sector may have just officially taken over from dairy as our number one export earner, 100% Pure New Zealand may have won some of the world's most prestigious marketing awards, The Lord of the Rings may have put us on the map but we cannot afford to sit back and rest on our laurels.

And I don't believe for a moment that the industry as a whole is at any risk of doing that.

Today, we all know that quality is at the heart of a sustainable tourism industry. Visitors who go home with good memories and experiences share those memories with their family and friends. This generates an ever-increasing "buzz" about New Zealand, in turn attracting more of the kind of visitors we want. The benefits speak for themselves - happy guests not only contribute to the sustainability of our tourism sector as a whole-they increase the profitability of your own businesses.

It can't be said too often - tourism in New Zealand has to be about quality, at every level, and for every single guest. I recently went to Sydney, where I enjoyed the very real privilege of showing off just how high the quality of New Zealand's tourism experience is at the 100% Pure New Zealand Showcase Event. Along with Prime Minister Helen Clark and prominent New Zealanders such as Richard Taylor, Kate Sylvester, Sam Neill, Grant Dalton and Suzie Moncrieff we showed over 300 of Australia's business, social and political leaders and media representatives what's behind our reputation as one of the most sought-after destinations in the world.

The event featured over 50 of New Zealand's best artists, including the work of World of Wearable Art's Suzie Moncrieff, composer Gareth Farr, percussion group Strike, dance company Black Grace, and musicians Hinewehi Mohi and Brooke Fraser. I've long said that New Zealand talent is second to none, and this event proved it beyond a shadow of a doubt. Our world-class food and wine was also on show, with product tastings from around the regions of New Zealand.

The great thing is, we do not need to hesitate in advertising New Zealand to our biggest market by showing them our very best, because the impression we left behind will be matched or bettered by the quality of tourism experience that is on offer here.

We are no ordinary destination. Guests can enjoy adventure tourism, world-class food and wine, a wide range of quality accommodation, wildlife, skiing, and unique cultural events-all set against the backdrop of the world's most beautiful and diverse landscapes. Without a doubt, New Zealand has it all!

Over the past four and a half years there has been a fundamental shift in the New Zealand tourism mindset. We have together developed strong government/sector partnerships that simply didn't exist before 1999. I consider myself privileged to have been a part of working with the industry through that transition.

I think this government has been pretty upfront about how seriously we take tourism. And here I want to acknowledge the strong personal support of the Prime Minister Helen Clark in her tireless efforts on behalf of, and in support of, the tourism sector. We worked closely with the sector to develop the New Zealand Tourism Strategy 2010, which outlines practical steps towards building a truly sustainable tourism market-one that strikes a balance between managing the impacts of tourism on the environments of our unique nation, and reaping its potential economic benefits.

We have consistently worked closely with industry to resource and improve quality standards at every level, and we are committed to keep working with the industry to find creative solutions to both the short and long-term issues that will always exist within the sector.

Our partnership has survived and strengthened through prosperity and challenges alike. Through the aftermath of September 11 and the Bali bombing; in the face of SARS, worldwide terrorism, and international conflict, we have managed crises and kept moving forward. Both 2002 and 2003 saw over 2 million international visitors arrive in New Zealand, with an increase in spending well ahead of growth in visitor numbers.

In the year ending June 2004, New Zealand received 2.2 million international visitors-a new high in visitor arrivals, and up 10 per cent from last year. This is, by any measure, exceptional growth. Latest forecast figures predict an increase in international visitor arrivals of almost 6 per cent reaching 3.1 million in 2010.

Even more important is the forecast international visitor spend, predicted to increase at nearly double that rate reaching $11.3 billion in this same period.

But what do these numbers really mean? I think comparisons with other major industries really help to illustrate just how significant tourism really is, so let me put them in perspective for you.

Consider this. Every single international visitor is worth the equivalent in earnings of 2.7 tonnes of apples, 4.5 tonnes of carrots, 2579 pounds of butter, or 1.6 tonnes of kiwifruit to the New Zealand economy.

Without international visitors, New Zealand would have to double the size of our dairy herd (that's 4.5 million dairy cows), more than double our production forest (an extra 5.3 million hectares), increase the size of the kiwifruit industry 12 times over, or the wine industry 23 times over.

(Well, maybe the last one's not such a bad idea.)

Clearly, tourism is New Zealand's premiere industry.

But as I mentioned before, it would be a mistake for either industry or government to get complacent. Strong partnerships are built on mutual respect-asking each other the hard questions about what we're doing well, what we could do better, and how we are going to achieve our goals for the future.

So what's going on at our end?

First, a three-year study into tourism infrastructure. Using Tourism Research Council forecasting data, the Ministry of Tourism is currently investigating where key infrastructure bottlenecks are likely to occur in the next seven years, including roads, airports, water, and wastewater networks. A key issue starting to arise for many communities is peaking numbers of visitors who need to use these assets. This project will allow us to identify those problem areas and coordinate appropriate action.

Budget 2004 allocates $11 million over three years to assist small communities to fund the basic water and sewerage infrastructure necessary to maximise local benefits from tourism. My Ministry is currently developing criteria and application procedures for this initiative. Officials will be seeking feedback from local authorities soon.

We are also working closely with the Department of Conservation on destination marketing as a way to manage visitor pressure. Our goal is to target guests who will stay longer, spend more, and, perhaps most importantly, get off the beaten track and out into the regions of New Zealand. We must also spread year round demand for NZ as a destination-something we have been focussing on since the release of Strategy 2010.

We have already made some gains in this area by successfully extending out the shoulder seasons, but we need to keep building on these changes and on our achievements so far. This is an area where we must keep working closely together to build the right strategies.

We continue to refine our marketing, seeking out those guests for example, who may find that New Zealand in springtime or autumn is far more appealing than high summer, thereby growing year-round travel. Equally, you as operators have to take a key role in destination management-not being afraid to say, "Sorry, we're full this week. Book in another three weeks and I can do you a great deal." This is another good way to help spread our visitors across the calendar.

Government also takes a key role in collecting, analysing, and distributing core tourism data, such as visitor arrivals, origins, activities, and spending. We also monitor commercial accommodation and provide forecasts. My Ministry collects this information and it is freely available on the TRCNZ website. The Tourism Research Council's new membership, comprising pre-eminent industry leaders, will continue to enhance the tourism research base.

But are we making the sector aware enough of the resources available to them? Is the Ministry aware enough of industry issues, and are they responsive enough in dealing with them? Are our lines of communication efficient? Do we have enough input into other policy areas that have a direct effect on tourism? I urge you to keep communicating with us on these questions.

And, if our partnership is as strong as I believe it to be, then we will also work constructively together through issues at your end. Dealing with new employment legislation, skill shortages, and pricing strategies are a few.

I have, for example, been open in my opposition to holiday surcharges-a view that has not been popular with some in the sector. I support incorporating any extra costs where they belong-in overall charges-rather than punishing customers for choosing to spend their holidays enjoying what you have to offer. Operators are of course entitled to - and must charge fair and realistic rates-ones that not only reflect the quality of the facilities and services you provide, but the quality of the staff you employ. But I know that finding and keeping these people is getting more and more challenging.

Of course, tourism is not alone in experiencing demand for staff. With unemployment at a sixteen-year low of just 4 per cent, businesses are increasingly vying for staff.

The government has recognised that if tourism is to grow, we need the right people, in the right place, with the right skills, at the right time.

Currently, the Ministry of Tourism, in partnership with the Tourism Industry Association and three Industry Training Organisations, are conducting a study into the future work force and skill requirements of the industry.

The study will identify and prioritise the skills necessary in the industry, as well as finding present gaps in training to acquire and develop these skills.

Work such as this is an important part of making sure that future tourism growth will not be limited by a lack of qualified and capable staff due to inadequate training opportunities or facilities.

In this way we, as government and industry associations, are working to ensure human resource supply and capability into the future.

But operators too, must play a part in ensuring that tourism is now seen as a viable career option, not a "fill-in" or temporary job.

Our front line people are the one we are counting on to make that good impression, to be knowledgeable and competent, to go above and beyond in meeting customers' needs-and deliver on the promise of a high quality visitor experience.

So, I would like to pose this question for your reflection: In a competitive labour market, are the wages and benefits offered to employees realistic, relative to the expectations we have of them.

Is the industry generally offering enough to attract and keep quality staff, or can some of those staff do a whole lot better elsewhere?

Now I know there are a range of answers- but these are the hard facts: you are competing with a range of employers for the same people: agriculture, horticulture, other service industries, a growing cultural sector, and expanding business and professional sectors.

And this government is committed to continue growing a high value, high yield economy - characterised by innovative industries that add real value in and for New Zealanders. How will you attract the managers, front line staff, and support crew that you need to run your businesses successfully?

Tourism may have an appealing image. But the bottom line is that attracting and retaining quality staff means paying appropriate salaries, and offering career opportunities for the future.

We have had another bumper season of arrivals and expenditure, and a strong domestic market. If we are truly committed to sustainability, we have to reinvest in the people who are at the core of the industry.

This may well pose some fundamental questions about price structure in some parts of the industry but these are healthy growth challenges to engage with. In order to reinvest in our products and industry, we must price accordingly.

So, our goal is to offer innovative, high quality products and services that live up to New Zealand's reputation as a premiere inbound and domestic destination. If we are going to deliver on our promises, businesses must have a sufficient return on investment, and we must have sufficient ongoing reinvestment in our people, our products, and our infrastructure.

To that end, I'm pleased to announce today that I am initiating a Tourism Research Scholarship Fund which will be established for post-graduate students to undertake tourism related research.

The Fund aims to increase research targeted to the needs of the tourism sector, to increase the profile and perceived value of tourism research in the tourism sector and to build research capacity by supporting academic excellence.

$15,000 will be made available for each of five successful applicants in their thesis year and the scholarship is intended to cover tuition fees and contribute to research costs (such as travel) and basic living. And I will be looking to the industry to support these scholars through placements and internships.

New Zealand will never be the cheapest destination in the world, nor would we want it to be. We have to be realistic about what we do well, and target our attention on getting guests here who want to experience what we have.

Which brings me to the Interactive Traveller-New Zealand's ideal visitor. Well educated, travelling internationally on a regular basis, and quite often sporting a relatively high level of discretionary income, these guests are looking for unique, authentic experiences that involve real interaction with both people and environments.

These visitors want an authentic Kiwi experience.

Interactive travelers are exceptionally valuable to New Zealand: spending more, getting out into the outlying regions, and as keen as we are to interact with and protect the very environments and heritage that have drawn them here.

We are committed to growing this high-value, high-yield market. And through our award winning 100% Pure campaign, we are seeing real success.

This multi-award winning campaign, which continues to evolve, has created a superlative brand that conveys the experience of New Zealand - as you'll see shortly when I show you some of the latest images. It paints a picture of the remarkable people, unique culture, and invigorating experiences visitors will find in New Zealand-not just our clean green landscape, but a 100% Pure New Zealand experience-authentic from start to finish.

100% Pure is Tourism New Zealand's global marketing campaign. It is very much an integrated campaign - including the key elements of advertising, international media, events leveraging, the Internet, and trade training.

All these components work together to market New Zealand to our target audiences offshore-high-value guests whose expectations best match what New Zealand has to offer.

By its very definition, the 100% Pure campaign is not something that could be used as a kitset for other markets. It is about New Zealand. It is who we are, and it is what our guests expect when they arrive. It is up to everyone in the sector to make sure those expectations are met-100 per cent of the time. It's a pretty daunting challenge, but one I know we can meet.

I believe that New Zealand is going to stay on top of the international tourism scene for some time to come. We are roughly the size of Sydney, thousands of kilometers away from most our key markets, and yet, we have captured the imagination of the world. (We really are an audacious nation.) We are innovative, talented, determined, and downright cheeky enough to hold the world's attention for as long as we remain determined to do so.

Yes - We CAN cut it and be world class. We already are.

I thank you for your hard work in getting us where we are today. I look forward to seeing what further accomplishments the next 12 months will bring. I wish you all well for an interesting and challenging conference and an outstanding visit as our guests in the Lake Taupo District.

ENDS

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