Otago University Tourism Policy School, “Structural Change for Regenerative Tourism”

It is my great pleasure to be online today at the fourth University of Otago Tourism Policy School event.

This year’s theme ‘Structural Change for Regenerative Tourism’ is incredibly relevant right now. I will spend some of my time talking about the state of tourism today, which has been subject to enormous change over the past two years and the changes we still must make for the future we want.

At a time when there is a lot of volatility in the world, reconnection is a great challenge before us.

But we’re certainly up to that challenge after everything we’ve faced together these past two years.

I’m privileged to work alongside incredible people in the tourism sector, and together, we’ll continue to work to lay the groundwork to affect real, systemic change for the future. Generational change.

Make no mistake, there is a lot to do between now and our future-state, and it won’t be easy, but nothing worth doing in life ever is.

Border settings changes are hugely encouraging

We took the hard decision to restrict entry to New Zealand in 2020. But we protected our health system, and the health of New Zealanders by doing so.

We have fared far better than many other countries, and crucially, we bought ourselves time for the vaccine rollout.

Now we are in a new place with Omicron having changed the game.

But with vaccination rates above 95 per cent for two doses, rising numbers of booster shots, and with a clear plan in place for the phased reopening of our borders, we have turned a significant corner in the COVID-19 battle.

Doing the hard work together, we are ready to welcome the world back to New Zealand; and New Zealanders are ready to reconnect with the world.

It has been a great couple of weeks for tourism, with the confirmation of border settings and the recent announcements that two major airlines will soon re-establish links to North America, ready for the upcoming summer season.

Australian reconnection is the first lifeline for industry

The recent decision by Cabinet to allow all fully vaccinated travellers from Australia from 12 April, and visa-waiver countries like the USA, UK, Singapore, Japan and others from 1 May without needing to self-isolate, is a huge step forward for international tourism since last year’s trans-Tasman bubble.

I know this is great news for many communities, in particular our winter-tourism communities.

I know you will put on your best show to welcome our international visitors back in time for the ski season.

The reconnection with Australia is obviously huge. Prior to COVID-19, Australia was New Zealand’s largest international visitor market, accounting for almost 40 per cent of all international visitor arrivals.

Reaching a point where we can now safely welcome the Aussies back is a huge milestone.

Combined with the removal of self-isolation for vaccinated travellers, it’s been welcomed by our tourism operators.

And following the reconnection with Australia and visa-waiver countries, the next big leap is to completely re-open to all countries.

These aren’t decisions that will only affect our tourism operators – but overtime they will re-energise entire communities.

However, we know that the impact of COVID-19 will continue to be felt, and international visitors from some big markets are not likely to return in large numbers straight away.

COVID-19 changed the world, and we can’t expect that tourism will remain unchanged. 

We’re unlikely to see an immediate return to 2019 levels, but nor should we want to – it was unsustainable, and some of our communities were bearing the brunt of its impact.

Brand New Zealand is more important now than ever

Tourism’s importance to New Zealand is immense and its economic, societal and cultural benefits are well known.

Tourism was our largest export industry and delivered $40.9 billion to the country.

Tourism also made a significant positive impact on regional economies, directly employing 8.4 percent (over 200,000) of the New Zealand workforce.

But that was before COVID-19. Globally, tourism will look different coming back.

Some countries borders remain closed. The cost, and traveller experience isn’t the same as it was. We may find that it takes time for people to rediscover our country and the many great things we have to offer.

It’s now more important than ever that we focus on tourism’s ability to inspire and change lives as a key part of our world-leading brand.

We want people to visit our country who have an interest in the environment and who want to engage with our culture. People who will go off the beaten track and seek out new experiences and be thoughtful about the ways that they interact with our land and communities.

Visitors who will become advocates for travelling here because they had wonderful, rich experiences that contributed to our regenerative goals.

To attract these visitors, we will need to make a concerted effort to live our brand. 

Our legendary hospitality in no small way helps to shape these positive impressions and we benefit from sharing our stories and places with these visitors in ways that are more than purely financial.

We want to continue to enjoy the benefits tourism brings to New Zealand and ensure that our grandchildren and great-grandchildren can too.

To that end, I want to lay down a challenge to all tourism businesses to be a part of, and an active participant in, a rejuvenated New Zealand brand. 

To consider how you present yourselves to visitors, the way you support your employees and think about ways to strengthen your links to your communities and our wonderful environment.

Because if we don’t ‘live the brand’ we will never be the premier destination we desire to be. If we are mediocre in our service delivery, no amount of crazy scenery and breath-taking experiences will lift us above many other destinations around the world.

It’s a well-used tagline, but it’s more relevant than ever before that it’s our people who will determine the overall quality of the visitor experience.

Draw on the support of your networks, the support of your communities, and embrace regenerative change together as a sector.

Events such as this are an important part of the dialogue between industry and academia, and initiatives such as the Industry Transformation Plan are a way to bring this collaboration to life.

Support for the Sector

When tourism is done right, the economic and social benefits are huge. And it is for these reasons that the government has made historic levels of investment in tourism to support our businesses to weather the COVID Storm.

Investment has been strategic, reinforcing our brand

The tourism sector has received billions of dollars of government support, both broad-based like the wage subsidy and resurgence support payment, and targeted, like the Tourism Communities: Support, Recovery and Re-set Plan.

As heavily as we have invested; we have invested strategically. Maintaining New Zealand’s international air connectivity has protected our connections to key partner destinations, as well as seeking to address future passenger carrying capabilities.

Tourism New Zealand has worked very hard over the past two years to keep ‘Brand New Zealand’ alive in the minds of discerning travellers; all the while building expectation across key demographics to promote our brand overseas and keep us firmly in mind as a desirable destination.

The government has spent billions in targeted and general support for the tourism and hospitality sectors of our economy over the past two years. I am happy to elaborate on this further in general questions, if required.

We have invested in our Māori Tourism sector.

We have provided funding to Regional Tourism Organisations so that they can market their tourism offerings, as well as make links into their communities to help coordinate just the kinds of actions that are required at the local level.

On that note, a word about Destination Management Plans.

Let me be clear – these are crucial for the whole sector and the drive to regenerative tourism, in short, tourism’s social licence to operate.

That is one of the reasons we are investing in RTOs, significant funding of almost $47 million in the past two years, to develop their plans and prioritise regenerative practices.

I need to be absolutely direct with you – I was surprised to learn that fewer than half of our RTOs have completed their Destination Management plans after two years.

I urge RTOs to get these plans completed as soon as possible, for all of our sake.

We will closely follow the tourism re-start across your communities.

I look forward to seeing tourism blossom again in those places where it has been sorely missed – and for those communities to embrace it as well.

Our commitment to support individuals, businesses and sectors continues to this day through the new COVID Support Payment.

As well as through our support for tourism businesses in our communities most impacted by the loss of international visitors.

And more support is on the way from 1 April through the Tourism Kick-start Fund.

The Tourism Kick-start Fund

While many businesses have suffered as a result of COVID-19, the communities of: Queenstown Lakes, Southland, Kaikōura, Mackenzie and Westland Districts have done it especially tough.

The opening of the Tourism Kick-start Fund is timed so that businesses can prepare.

 With the changes to border settings and the imminent arrival of international visitors, my $49 million Tourism Kick-start Fund for these five communities will help provide eligible businesses with a grant of between $10,000 and $50,000 to assist in refreshing facilities, marketing, training and hiring new staff, or sourcing new stock in readiness for opening.

Ramping back up for business will take time and money and is exactly what the Tourism Kick-start Fund is for.

Innovation in tourism is needed

While we prepare for reconnection to the wider world, we must continue to plan for the future.

Tourism operators should absolutely be looking to harness unique innovations in the industry. Increased use of technology, such as electric vehicles, accessible websites and virtual reality are all within reach right now.

We’ve invested heavily in innovation to support this kind of thinking. The Digital Boost programme is just one such example.

The Digital Boost initiative helps small business owners to embrace tech, and to feel supported as they learn.

Levelling up your skills and digital offerings can also have huge accessibility benefits for people.

And on top of this, I am investigating the possibility of the ‘Tourism Innovation fund’, however, I will talk about this more at a later date, once ideas are better developed.

Our culture makes us unique

We want to be sure that we are sharing our unique cultural experiences too.

So central to Māori culture is manaaki manuhiri, or the care and hospitality of visitors.

And kaitiakitanga – guardianship and protection of the land and environment.

Māori tourism adds such a rich dimension to New Zealand's visitor experience and helps set us apart from the rest of the world.

When we speak of regenerative tourism, we are speaking of Māori cultural values as well as the values the vast majority of New Zealanders hold dear.

Freedom camping is part of that sustainable journey

Rebuilding tourism sustainably can also be seen through the work the government’s progressed on Freedom Camping changes.

These changes seek to protect the natural environment and local communities’ enjoyment of it, as well as supporting efforts to ensure that all freedom camping is done responsibly.

There’s a parliamentary process to go through yet, but I’m aiming to ensure that some new rules may be in place in time for next summer, so that our communities can feel confident that campers are acting responsibly and will face real consequences if they break the rules.

Challenging the industry to do better through the Tourism Industry Transformation Plan

We must do things differently here if we want tourism to provide real benefit to our communities for future generations.

This is part of my challenge to the industry – to do things differently. And not only for the environment. For your employees too.

Tourism can be such a powerful tool for international connection – a chance to share our stories – and for that you absolutely rely on the people who work for you.

Tourism in 2022 and beyond must be looking to transform into the kind of industry where workers don’t just get by; they thrive – the Government cannot achieve this by itself.

We are there with you, supporting this change.

And so, I have set up the Tourism Industry Transformation Plan programme, the ITP, to tackle just these kinds of ‘big’ issues.

The kinds of issues that you’re discussing at this event today.

The kinds of issues that need collaboration between industry, government, workers, and Māori. All backed up by high-quality research, analysis and insight.

Tackling systemic workforce issues to kick things off

The ITP’s first phase is on achieving Better Work for the tourism industry.

This is about tackling systemic workforce issues – better pay and better conditions for workers.

Currently:

• demand fluctuations mean many tourism employees are either underutilised or overworked;
• pay and conditions in the industry are a barrier to attracting and re-attaining workers; and
• the sheer volume of small businesses that characterise the industry are often lacking the professional HR and management expertise needed to offer workers a rewarding, safe and secure employment environment.

The Tourism ITP will put out a draft Action Plan for consultation in the middle of this year on Better Work and that will provide an opportunity for you to get involved and engage with this important subject.

You should expect to find some discomforting truths in the ITP’s first report.

While we know that there are a lot of fantastic operators out there who provide great work for their staff, the report will not shy away from highlighting areas where there is poor employment practice.

It is in the interests of the whole industry to reflect and engage with an open mind. If we work together to lift performance, the whole tourism system will benefit massively.

Because the consequence is if we don’t make changes and allow the relatively small number of operators to continue poor employment practices, they will continue to drag down the reputation of the whole industry. 

That is not acceptable to me.

The current reality must not prevent overdue changes being made.

I acknowledge that, of course, for many tourism operators, just keeping the cash coming in has been an immense challenge over the past two years.

So, this conversation may seem like it comes at a hard time.

But a continued ‘race to the bottom’ with low wages and poor conditions will not serve anyone well. Least of all workers.

This is the industry’s chance to make a commitment to rebuilding on a better model.

And the Government will support operators to get there.

ITP Phase 2 is on the environment

Following Better Work for the tourism industry, the ITP’s second phase will focus on tourism’s environmental impact.

In anticipation of this, I am pleased to be able to announce that we have engaged Aotearoa Circle to carry out a climate change Adaptation Roadmap for the Tourism Industry, which will be a key input into the ITP when the environmental phase 2 begins later this year.

As we are all too aware, climate change will bring massive changes to the physical environment on which our tourism industry relies so heavily.

We’re already seeing this occur with extreme weather events, and we will soon see access issues, sea level rises and steadily decreasing snowfall.

In addition to improving their regeneration credentials, many in the tourism industry will also need to adapt to changing consumer behaviours, such as visitors becoming increasingly conscious of their personal carbon footprints, especially with New Zealand being so distant from some of our key markets.

The work lead by Aotearoa Circle aims to understand how the tourism industry will be impacted under different future scenarios.

I’m expecting that as the sector recovers, and the ITP process continues to mature, we will be able to use it to solve further issues. I’m excited by the potential of forums such as this one to help identify and shape these future-focused issues.

The ITP isn’t a silver bullet, individual businesses must challenge themselves to change.

The Tourism ITP is just one example of how government and industry are coming together at a high level to progress really tough issues.

But the real work must start at the level of the individual operator. Each and every one of you is important here.

The Government has provided support to help the sector get through tough times, but now operators need to make those changes that together help all of us.

Operators must challenge themselves to take real, meaningful actions to improve their offerings for their workforce, for the sake of the natural environment, and for their communities and the social licence they rely on to operate.

Our international visitors must contribute their fair share too

I’m also planning ways now to ensure that our future visitors pay their way, and that communities won’t go back to being overwhelmed and unable to cope.

Part of reopening New Zealand is about targeting ‘high-value’ visitors - as distinct from high net worth.

My thoughts about ‘high value’ do not exclude the backpackers or budget-conscious travellers.

They will always be welcome and that is why we moved quickly to re-open the working holiday visa applications.

High-value tourism, to be clear, is the framework we take to our international marketing activities.

High-value, high quality visitors give back more than they take.

They travel across seasons and across regions.

They are environmentally conscious, and seek to off-set carbon emissions.

They are respectful of local communities and cultures.

They appreciate the efforts and intrinsic worth of the people in the local workforce they meet.

They want to learn about local history and culture, and try new experiences.

That is a high value tourist.

The IVL has a major role to play here.

The International Visitor Conservation and Tourism Levy, the IVL, is aligned with the Government’s goal of laying the foundations for the future.

I think most of us could agree that $35 for the IVL was fine when it first came in, but is not sustainable in the long term if we are to meet the expectations of visitors for world-class infrastructure and facilities.

The IVL was considered to be the first step in creating a sustainable funding framework to achieve the Government’s strategic objectives for tourism and conservation.

I am continuing to look at the IVL but no immediate changes are in store, and no Cabinet decisions have been made.

Tourism post COVID-19 has to be different – a challenge to industry

As international visitors return, we will not fall back into the old ways. That doesn’t help our communities, our kids, or ultimately tourism as a whole.

I know there’s real potential in tourism to become a low-carbon, high-skill and high-wage industry – to be smarter and to be greener and to be a career of choice for school leavers.

We have the potential to lead the world in the area of regenerative tourism, to be number one.

A shout-out to Northland, recognised in January by the influential New York Times for these very qualities, and named as one of the top places to visit in 2022.

Industry leaders are on board, and working together with government, iwi and workers, such as through the ITP.

We will make sure our visitors contribute more than they take away. We will bring them with us as we change.

Tourism won’t return to the way it was – it will be better.

The industry is working hard to keep its social licence to operate.

And to keep the brand healthy and returning stronger than before.

As we welcome our international visitors back and knowing the support of government is there with you.

My aspiration is to show New Zealanders and tourism industries around the world that we aren’t just in the top two or three destinations: that with everything we’ve done so far, and everything we have planned, we’re undisputed number one!

Thank you, ngā mihi nui, and please enjoy today’s sessions.