Tourism Industry Auckland Update

Good afternoon Ladies and Gentlemen.

It is my great pleasure to speak to you today here in Auckland. I understand a lot of useful discussion has already taken place here this afternoon and I welcome the opportunity to talk with you about some of the Government’s recent contributions to the tourism sector.

But firstly, I would like to acknowledge the presence at this forum of His Worship, the Mayor of Auckland, John Banks. As a former Minister of Tourism himself, there is no doubt that he has a real understanding of the economic importance of the tourism sector to Auckland. With an impact of $1.63 billion on this local economy, in 1999, tourism is not something to be ignored, or taken for granted.

Current Climate

For most of last year, when I spoke with tourism audiences, I was able to be unreservedly positive about the current performance and future growth prospects for the industry. All the data and numbers were pointing in the same upward direction and the Tourism Satellite Account figures from August were excellent, indicating that total tourism expenditure for the year ended March 2000 was over $13 billion.

The events of 11 September and their aftermath however, combined with uncertainty about the outlook for our national carrier, changed that, and for a time the immediate picture gave cause for real concern. I am pleased to be able to say, that now, less than six months later, the picture is a more positive one.

In terms of visitor numbers, the Tourism Leading Indicators Monitor data, released by the Tourism Research Council New Zealand in January shows that, by December 2001, the drop in international visitor arrivals had reduced. Despite the downturn in the final quarter, annual arrivals for 2001 still achieved 6.7% growth. While the picture is uneven across markets, the anecdotal forward outlook from Tourism New Zealand suggests that booking patterns across the country are stronger than initially anticipated.

I am sure you will all have been pleased by the Government’s decisive action to take a majority stake in Air New Zealand. This decision reflected, in part, our keen awareness of tourism’s importance to our economy and well-being. And we recognised the important role of our national flag carrier in promoting the New Zealand brand in our overseas tourism markets and in maintaining landing rights.

We have sent a signal that the Government has confidence in Air New Zealand’s potentially strong future. I recognise there are capacity and other issues in some sectors, and am confident that over time these will be worked through as the Air New Zealand Board and management focus on building, what must be, a strong and financially viable business.

The overall picture then, suggests that we can return, if not to unbridled confidence, then certainly to cautious optimism, that our industry is weathering the storm very well, and can reasonably anticipate a return to healthy growth patterns.

It is gratifying to hear about the strong level of growth and optimism within the Auckland tourism industry, and rightfully so - these are exciting times for you. In this region, there are new major hotels such as the Hilton and the first international hotel on the North Shore, the Spencer on Byron. There is the construction of a long overdue major conference centre for Auckland at Sky City. And innovative new attractions like the Auckland Bridge Climb and the Sky Jump. All good examples of tourism operators recognising the need to keep up with the growing demands of tourists for quality experiences.

A growing number of exciting events provide visitors with further incentives to visit the City of Sails: - the Volvo Ocean Race, New Zealand Fashion Week, the Louis Vuitton Cup and of course the big one, the defence of the America’s Cup, which I’ll talk more about later.

But now, I’d like to update you on the implementation of recommendations from the New Zealand Tourism Strategy 2010. The Strategy was released in the middle of last year following a great deal of work by the Tourism Strategy Group, ably chaired by someone familiar to you all, Evan Davies of Sky City.

I want to take this opportunity to again publicly acknowledge the outstanding contribution Evan made in leading the Tourism Strategy Group, and achieving a strategy that will provide a focus for government and the tourism industry now and in the future.

A key recommendation from the Strategy was for the establishment of a Ministry of Tourism, to lead a whole-of-government approach to tourism policy, and to give tourism a stronger voice and higher status within the public sector.

I am pleased to be able to say that the Ministry officially came into being on 1 January this year, replacing the Office of Tourism and Sport.

The new Ministry is umbrellered within the Ministry of Economic Development. This linkage will be helpful in building the connections across government policy portfolios, in particular with regional development and Industry New Zealand programmes.

The new Ministry will be officially launched in a couple of months but is already taking on new capacity with the most recent appointment being an adviser to address tourism policy issues affecting Maori

In 2000 I was pleased to announce the establishment of the Tourism Research Council New Zealand in partnership with industry. The Council has been established to provide credible, authoritative and integrated tourism research, information and forecasting.

Research is vital to the business of tourism operators. The work of the Tourism Research Council will enable the Government’s research resources to be tailored to meet the industry’s specific requirements - adding value to the core data collections, adding value to tourism operations, and ultimately adding value to the experience of each and every visitor to our country. And the Government is continuing to direct more resources towards research to enable this to happen.

A key recommendation from the Tourism Strategy related to the consolidation of the core data set.

The Ministry of Tourism is currently working on this consolidation, which will be managed by the Ministry on advice from the Tourism Research Council. This move will allow the excellent work of Tourism New Zealand with the International Visitor Arrivals and International Visitor Survey to be extended to the other components of the data set, so that the future requirements of tourism can best be met.

Tomorrow, as part of the Government’s innovation drive in Tourism, I will be releasing the Tourism Research and Development Strategy. This document serves to highlight the breadth and depth of tourism research priorities in New Zealand, and sets out the mechanisms that will be used to evolve the tourism industry into a high information-using sector.

There is no doubt that informed decision-making is the key to the continued success of New Zealand tourism and I believe that this Strategy will ensure that a consistent approach to investment in research and development is taken.

I want to acknowledge the generous contributions of time and expertise by the members of the Tourism Research Council and particularly acknowledge the drive and commitment of the chair- Sean Murray of Tourism Holdings.

One of the key principles underpinning the Tourism Strategy 2010 is increased public/private commitment to, and involvement in, the industry. It was clearly recognised by the Strategy Group through its consultation process that there was a need to develop stronger and more effective partnerships between the public and private sector, including ensuring the optimum use and leverage of scarce resources.

The Strategy identified a keen industry desire to see an even stronger public/private sector focus in Tourism New Zealand - our key organisation responsible for leading New Zealand’s destination marketing activities.

The Government agreed that Tourism New Zealand should be aligned even more closely with the tourism industry and with local government. We think there is real value in formalising the partnership relationships that contributed so strongly to the Tourism Strategy development process, whilst building on the strong base of work undertaken by Tourism New Zealand.

By way of example, you will have seen that the position of Tourism New Zealand Chair has recently been advertised. Reflecting the partnership approach, I have also written to a number of tourism industry organisations and other agencies seeking nominations for the position to ensure that the selection process is consultative and open.

I now have a significant number of nominations and will be working through the selection process in the coming weeks. A similar process will be used for future Board appointments to Tourism New Zealand.

Last month I announced a series of initiatives that were designed specifically to address the recommendations from the New Zealand Tourism Strategy relating to building capacity within the tourism sector. These included:

Qualmark

I am pleased to say that the Qualmark grading system will be significantly expanded from the current sectors of accommodation and tourism retail to include adventure tourism, transport, activities and retail, eco-tourism and hybrid attractions.

Qualmark will also include a business certification system to sit alongside and support the grading system. To gain certification, a business will need to demonstrate appropriate standards in business skills and practices, staff training, cultural management, environmental management, health and safety, alignment with destination brand values and regulatory compliance in the tourism sector.

These enhancements to Qualmark will provide visitors with a reliable standardised quality assurance system. In my role as Minister of Tourism, I constantly receive letters from international visitors commenting on the quality of their experience during their stay in New Zealand. Unfortunately, I am just as likely to hear about the brickbats as I am about the bouquets.

Quality and quality assurance are an important part of individual business activities, a foundation for the overall performance of the industry, and are essential to positioning New Zealand as a quality destination.

By linking the marketing advantages of belonging to Qualmark to the adoption of best business practice, individual businesses and the tourism industry as a whole will benefit. I encourage Auckland tourism operators to demonstrate their organisations’ commitment to quality through the support of Qualmark.

The Government has also allocated funding to assist Local Government New Zealand to respond to the recommendations of the Tourism Strategy. Currently the level of local government investment in, and understanding of, tourism varies considerably around the country. The funding provided will assist the sector to realistically consider the role of tourism as an economic, social, environmental and cultural driver in their area.

The Strategy also made a large number of recommendations to RTOs. We recognise that they play a strong leadership role within the industry and act as a bridge between tourism operators, national tourism bodies and Government. The Government is assisting RTOs to examine such issues as their future role, the link between destination marketing and destination management, Maori tourism, back office issues and links with local government.

Any work progressing recommendations directed at Maori requires Maori support and input. The Maori Tourism Advisory Group, under the chairmanship of Tom Mulligan, will therefore continue to provide advice to assist with implementation of the Strategy. The Group has already shown itself, during the development of the Strategy, to be well equipped to take a leading role in providing advice on how Maori can best participate in, contribute to and benefit from tourism.

New Zealand is incredibly proud of Team New Zealand who made the America’s Cup, New Zealand’s Cup. As you know, the America’s Cup and its associated activies is more than just about winning a yacht race, it has had a huge impact on tourism and hospitality industries in Auckland.

The America’s Cup 2000 event generated $640 million of value added to the New Zealand economy of which $473 million remained in the Auckland region. A report commissioned by the Ministry of Tourism, identified that $64.2 million total value added was directed to the accommodation sector and $126 million was directed to New Zealand’s renowned marine sector.

The event attracted over 4 million visits to the Viaduct Basin area, this in a country with a population base of 3.8 million. It also brought 90 superyachts, which is a southern hemisphere record.

Superyacht expenditure made a substantial contribution of $118 million, or nearly 18% of total national value added and, boosted by our America’s Cup profile, New Zealand is now the 7th largest superyacht manufacturer in the world. To add to this, global media coverage and ratings exceeded expectations and feedback from international visitors and syndicates has been very positive.

Going forward, and drawing upon the experience learned from the America’s Cup 2000, the New Zealand Government led by Sport Minister Trevor Mallard, is working in partnership with all involved in preparation for the next defence in 2002/03. As Minister of Tourism, I am delighted that all the international challenger syndicates have appointed local tour operators in Auckland to co-ordinate all their travel and hospitality arrangements for themselves, their families, sponsors and visitors to New Zealand.

The challenge now for New Zealand, our sailors and the host city of Auckland, is to hold onto the Cup for as long as possible. And to continue to provide the excellent standard of customer service and hospitality for which New Zealand is famous – the results speak for themselves.

Lets work together to ensure that all our America’s Cup visitors have the opportunity to taste our unique 100% Pure New Zealand experience.

Finally, I want to make a few general remarks:

In November 2001 an international survey ranked New Zealand as the second most entrepreneurial nation in the world. We were ranked ahead of other countries we often compare ourselves with such as Australia and the United States.

The government recognises however, that too often in the past those innovative and entrepreneurial people have had to take their ideas off shore in order to get the funding and recognition needed for development. New Zealand has frequently missed out on the economic gains that development in this country could bring to us all.

So, the challenge for this government has been to encourage regions and industries to work in partnership, to look at their strengths, at the barriers to development, and to work together to create business and industry growth.

By working together, with their communities, innovative people with entrepreneurial ideas can receive the support they need.

Earlier this month the Prime Minister released Growing an Innovative New Zealand - the framework document that draws on the various economic development reports received by government over the past year. This document sets out the direction, which the government intends to follow. From an economic perspective, the objective is to return New Zealand’s per capita income to the top half of the OECD rankings - and maintain that standing.

There are many signs that this transformation is underway – new industries are emerging and are growing strongly – two of these close to my heart are tourism and winemaking!

The tourism industry has been, and continues to be, a model of innovative change and growth, to the benefit of the economy, to social and cultural interests.

Building on such tourism innovation will continue to need support and commitment from a variety of sources: individuals, communities, businesses, local and central government working together in partnership.

I commend you for the work you have done together, including this workshop, and congratulate you for the very real commitment that you as an industry have shown to working together to benefit Auckland and New Zealand. Congratulations to you all and once more thank you for the opportunity to speak here today.