Speech at Itoc forum – Auckland, Xmas 2006

  • Damien O'Connor

Kia Ora and welcome

Thank you for inviting me here today. It is a real pleasure to be here this afternoon at this wonderful location. I see many familiar faces in the audience, many of whom I hope to catch up with for the promised cocktails and networking this evening.

As Minister of Tourism, I recognise the important role that ITOC’s full members and supplier members play in taking New Zealand and tourism to international markets.

Much of this important distribution channel work is done behind the scenes and usually operates like a well-oiled machine.

I congratulate you on your efforts. Of course, however, there are instances where it is always not so well oiled. Let me now turn to China.


As inbound operators and suppliers, you will all be aware of our key emerging market – China and its growing importance.

As many of you will know, New Zealand has just reached the milestone of having over 100,000 Chinese visitors to our country in the last year.

This reflects China’s status as one of the fastest-growing tourism markets in the world. And it is expected that China will become one of New Zealand’s key sources of visitors within the next few years.
In fact by 2008, we expect China will overtake Japan, as New Zealand’s fourth largest provider of visitors. This has significant implications for our tourism industry.

The recent launch of Air NZ direct flight’s from Auckland to Shanghai is particularly pertinent, as it makes it easier for Chinese visitors to have a longer stay in New Zealand than is currently the norm, and experience more of our tourism experiences.

Having recently returned from Shanghai, I can testify to the efficiencies of these Air NZ flights. You board the plane at midnight, are served dinner, you sleep, and then wake up to breakfast. And before you know it you are in Shanghai, or vice versa. An experience I highly recommend.

So, no longer do our Chinese visitors have to come to New Zealand via Australia – of which I understand 60% of our leisure market currently do.

We can now promote ourselves as a single-destination and charge prices that reflect the true cost of their experience.

As Minister of Tourism, one of my primary interests for visitors from China – and any country for that matter – is to ensure a high quality tourism experience is had by all. That we find the right balance of promotion, marketing and delivery,

We are putting a lot of effort into developing high quality, longer staying tours; and Tourism New Zealand is working with the industry to develop packages and itineraries that deliver on this.

The Kiwilink Asia Expo, which I recently attended in Shanghai, was an excellent event and with just under 97 Asian companies attending it sent the right messages about our products and what NZ has to offer out to travel agents and wholesalers throughout our Asian markets.

However, as many of you know there are issues with the current ADS onshore system and the Ministry of Tourism and Tourism New Zealand have been working together to resolve these.

They have found a number of issues including:
·a market dominated by below cost tour packages and controlled shopping,
·a lack of compliance with ADS system rules,
·a low consumer awareness, and
·a lower visitor satisfaction level by our Chinese visitors.

These are issues that I take seriously and ones that we all need to fix. Those full ITOC members in the audience would have heard from the Ministry of Tourism this afternoon a bit more detail on the changes we propose to make to the current system.

We aim to ensure all service providers in the distribution channel are accountable for the experiences of their customers. This will involve greater attention to compliance with New Zealand regulations – in areas of transport, OSH, immigration and labour – and a focus on coordination of government agencies and industry.

While in Shanghai I discussed these proposed actions with the Chairman of China’s National Tourism Administration, Mr Shao, who repeated his willingness to work with us at the China end to ensure we deliver a high quality, true Kiwi experience for our Chinese visitors.

In addition, Tourism New Zealand is currently developing a long-term investment strategy for China. If we are serious about this market then we need a smart marketing campaign that will target consumers and educate them about the unique product New Zealand has to offer.

China is an exciting market and one where tourism is in a good space to take advantage of what this market has to offer. If you are currently working in this market or thinking about getting into it, I encourage you to think about yield and the experiences you deliver.

NZTS Strategy Review

This leads nicely on to the next topic I wish to speak to you about.

You are probably all aware that the project to update the New Zealand Tourism Strategy 2010 is well underway.

I am very excited about this opportunity, and I am proud to be Minister for a sector that has the maturity to sit around the table together and plan for a shared future that we can all aspire to.

The Strategy update provides us with an opportunity to acknowledge the enormous amount of progress we’ve made, and the huge successes we’ve had as an industry since the NZTS was launched in 2001.

The update is also a valuable chance to get together as a sector to talk about the really big issues. For instance – what sort of growth do we want? How much growth? What will sustainability really mean for tourism?

Stuart Neels and Paul Yeo both participate on the Ministerial Advisory Group and they will tell you that the challenges and questions we ask certainly aren’t easy ones.

But, like the funding questions it is important that we have these discussions, and I think that through this work our industry will be very well placed to ensure a successful future.

Conversations have been held with a huge range of people to inform the update, beginning with a dedicated day at the Tourism Industry Conference in August, and including over 30 meetings with interested parties.

From these discussions some key themes are emerging:

·There is a wide degree of consensus across the sector about the sort of industry we want to be and the sort of future that we want.

·There is general agreement that as an industry we must seize the initiative and provide leadership on environmental sustainability in order to continue to be a world class destination.

·There is agreement that we need growth – preferably steady growth – and there is some debate about how much. The Ministerial Advisory Group support a medium to high growth tourism future.

It is agreed that a growth focus must at the same time focus on seasonality, ensuring regional spread, and preparing for anticipated growth through funding of tourism infrastructure and managing visitor impacts, for example on our communities, and on DOC public conservation lands.

All of these themes will be complex and challenging to deliver on.

The updated NZTS 2010 will provide guidance, but the leadership to deliver must come from right across the industry. All of you here today are leaders in our sector, and I ask that you rise to this challenge.

The success of the tourism sector will be assured if we all work towards a shared vision for the future.

I wish you well for the busy season ahead, and an early Xmas greetings to you all.

Thank you.