Opening the 1998 New Zealand Tourism Conference

  • Murray McCully

This is indeed an interesting time to be addressing you at your Annual Conference.

On the face of it, these are times of some uncertainty, including, I see in one or two newspapers, for myself in relation to the tourism portfolio.

I do not intend to dwell on any of the many interesting events on the political stage today.

And nor, I suggest, should you.

The challenges and the opportunities for this industry and this country remain the same, regardless of political sideshows, and that is where our focus should lie.

It is almost remarkable that I should be able to stand here today, after all that has happened in our markets over the past year, and assert with confidence that this industry will earn for New Zealand in 1998 as much income as it earned in 1997.

That is a massive achievement, and on behalf of the New Zealand Government I acknowledge it, and I thank you for it.

But to say that tourism will earn roughly last years income based on a 5% or 6% drop in arrivals, is to understate the huge scale of the adjustment which the industry has undergone to make this achievement possible.

To overnight lose 90% of a market like South Korea which a year ago was yielding 125,000 visitors and $235 million in income, and to lose 50% to 70% of many lesser Asian markets, was a huge hit by anybody's standards.

Against that background, to have had the confidence, the commitment, the determination to move forward and grasp the new opportunities is the mark of the professionalism and maturity of New Zealand's largest foreign exchange earning industry in 1998.

And I salute you for it.

About fifteen months ago, I asked the New Zealand Tourism Board to review and re-focus its strategy, to take the logical next step in the evolution of New Zealand tourism.

I asked for a recognition that we were in the business of boutique tourism rather than mass tourism; that we needed to emphasise yield over volume, and we were seeking quality over quantity.

Many of you will have been consulted by the board in the preparation of the new strategy.

Most of you will, I hope, agree that it firmly heads us in the right direction.

But despite the progress we have made with the new strategy, and despite the outstanding result which appears imminent for 1998, this is not a time for self-congratulation, not a time for complacency.

This is a time to look forward to new challenges and new opportunities, to attack them with the same resolve which has characterised our approach to this years problems in Asia.

You do not need me to tell you that the opportunities right now in Australia, UK and North America are enormous, courtesy of an attractive exchange rate, buoyant economies, and available air and accommodation capacity.

In North America, we have turned an important corner, with good growth over recent months after several years of declining performance.

But the scope is clearly there for us to do even better.

In the UK, while the domestic economy is softening, we are continuing to grow, but need to go for a better market share.

And in Australia, assisted by recent increases in air capacity, and having finally grasped the real level of opportunity which lies in giving the 11 million people on the eastern seaboard access to New Zealand for short break holidays, we are getting good growth.

There are markets in South America, South Africa and China, amongst others, which for a modest investment of time and resource will provide good flows of high yield traffic.

And of course, starting in November 1998 with the World Cup of Golf, we have a Millennium series of events which will give this country the most sustained period in the international spotlight we are likely to see for several decades.

Rather than looking back at where we have been over the last year or two, and marvelling that we have fared so well at a time of such adversity, we need to look ahead, recognise the window of opportunity which exists, and ensure that our efforts are commensurate with the potential rewards.

Some of you will no doubt be moved to suggest that more money would help.

And I am not going to argue.

I am on public record in almost every city in this country as saying that the $55 million that New Zealand taxpayers give the New Zealand Tourism Board is the smartest $55 million they spend every year.

I have protected that budget against all opponents in the rounds of expenditure cuts which have occurred.

And now, as the Prime Minister and others have publicly acknowledged, the question of additional tourism marketing expenditure will form part of the September update in which we review our response to the Asian crisis.

Today, I make you no promises of additional money.

But I do promise you that the very best possible case for this industry is being put before my colleagues.

In order to deserve more money, whether it be from ratepayers for your RTO or from taxpayers for the New Zealand Tourism Board, we in the public sector must be able to demonstrate that we are doing exactly what the private sector in the tourism industry has already done.

During 1998, private sector players in New Zealand tourism have dealt with challenging international circumstances by getting leaner, meaner and hungrier.

Unnecessary overheads have been cut; areas of duplication removed, the use of technology maximised, contracting out utilised where it adds to efficiency, and strategic partnerships formed where they add value and cut costs.

And that is clearly a lead which the public sector must match.

Good progress has already been made.

The formation of macro-regions has delivered a whole new tier of budget and depth to our international marketing efforts.

And I expect to see the board respond by recognising that such initiatives must attract appropriate support from the joint venture budget.

The New Zealand Tourism Board has reduced staff, closed offices, and in the past year, freed up nearly $3 million from overheads to go into the market.

Functions like Kiwihost have been devolved to the private sector and the mantle, and to some extent the cost, of industry leadership has shifted markedly towards the New Zealand Tourism Industry Association.

The past year has seen other significant advances:

the establishment of the Office of Tourism and Sport, with a top level director, able to immeasurably enhance the tourism voice in the decision making process of Government.

the commencement of data collection for a Tourism Satellite Account from 1 July this year, which will, over time, change the way in which New Zealanders see our tourism industry, and hopefully greatly enhance support for Government funding of tourism marketing.

the establishment of a tripartite strategy for tourism research between the Government, the Board, and the NZTIA, to ensure co-ordination and maximise our access to research funds.

and the establishment of Major Events New Zealand, to get New Zealand into the market for high earning and high profile international events.
But again, despite these important advances, there is no room for complacency.

In the past six months again, markets have changed, currencies moved, priorities altered, technologies advanced and strategic opportunities emerged.

The challenge ahead is not just about asking for more money - although clearly that is part of it - the challenge ahead for the public sector is to match the innovation, energy, enterprise and vision of the private sector as we seek to maximise our returns at the most entrepreneurial end of the most volatile markets in the world.

I am sure I have no need in this forum to spell out the importance of the two years ahead of us in shaping our international brand.

Gradually, I believe New Zealanders are getting the message that the Millennium series of events is not just an opportunity to clip the ticket as some people come to see a golf match or a boat race - but rather the greatest opportunity this country is likely to have to build some profile and some brand values.

There are two things I want to say about that today.

First, its about time that New Zealand incorporated started to get serious and professional about the way it develops it's brand.

Across all of the Millennium activities, APEC, the America's Cup, the World Cup of Golf, the Under 17 FIFA Soccer World Cup, the World Netball Championships and the Millennium itself, we need consistency in our branding.

We simply cannot afford the luxury of dissipating the meagre dollars we have across a range of images and brand identities.

Within the Government I am working hard to ensure we achieve this.

In this regard we need to remind ourselves of the profile and identity we already have.

I proudly wear the black and white version of the New Zealand Brand silver fern badge on my lapel because it is the one image that is both well known internationally, and distinctive to New Zealand.

The massive All Black brand is identified by the black and white silver fern.

And so are Black Magic, the Kiwis, the Black Caps, the Black Ferns, the Commonwealth Games athletes and our Olympic representatives.

And cumulatively they pack a lot more punch than anything that New Zealand trade or tourism can afford.

We should be proud of that association, and build on the enormous profile which our sports people have delivered to us.

Some of you may have thought my recent visit to South Africa had more to do with a desire to see a rugby match, than to promote tourism.

For me, the opportunity to associate New Zealand tourism and New Zealand Inc with our biggest sporting brand is a huge strategic initiative.

And personally, I intend to grab it with both hands.

The appointment by the New Zealand Tourism Board of Saatchi & Saatchi as a worldwide agency should be the start of something big in this regard, and I trust that Kevin Roberts will give you a taste of that tomorrow.

The second message I have is about our attitude.

If we are going to make the most of our upcoming opportunities, then New Zealanders will need to remember who they are and where they are.

We are a tiny country about as geographically remote from major markets as any country in the world.

Just as we cannot afford to dissipate or confuse our brand messages, we cannot afford to have a significant proportion of the population, and most of the news media selling the place short.

We stand poised at the brink of the biggest opportunity we will have in my lifetime.

For New Zealanders generally, and the news media especially, this really is the time to wake up and smell the coffee.

If we are not proud of what we have achieved as a country, proud of our innovators and entrepreneurs, proud of our achievements, and, yes, even proud of our leaders, then personally I cannot see why the rest of the world should give us the time of day.

For most of the next year and a half the television cameras of the world will be pointed in our direction.

We have it within our power to create a brand which is characterised by innovation, quality, energy and purpose, or to squander our opportunities as the petty critics dominate the airwaves.

We need to take the opportunity to tell them how good we are.

And the media need to understand that ultimately you cannot expect to sell more newspapers if you insist on using 95% of your columns telling our visitors what a dump this is.

So let's get the incentives right.

Let's back the people who are showing the leadership, providing the vision.

And most important of all, let's show our visitors what a great place this is, and what good hosts we are.

This conference takes placed at a crucial time.

We now are really down to the business end of the Millennium programme.

More than any other sector in New Zealand, the tourism sector has a great deal riding on the next 18 months.

The opportunities are there to harvest.

I wish you well in your planning at this conference and in your endeavours as we move ahead.