Visitor Information Network conference, Te Awa Farm Winery, Hawkes Bay

I was very pleased to accept the invitation to speak to the annual conference for the New Zealand Visitor Information Network, here in the Hawkes Bay.

I must say that I always look forward to opportunities to speak to the tourism industry about the challenges we face and the prospects ahead.

Of course, this week's horrific events in the United States have posed a particular, unexpected and unwanted challenge.

It is too soon to accurately say what the impact will be on the New Zealand tourism industry, but we can expect that in the short-term many, and Americans in particular will be more reluctant to travel.

It is certainly the case that all international travellers, and indeed, domestic travellers to some extent, will have to accommodate enhanced security measures and costs.

Other markets that are very security conscious ¡V such as Japan ¡V are in some cases, likely to reconsider travel, or to change the priorities of which countries they visit.

However, for the longer term, there is I think, reason to believe that the growth trends in global tourism can recover, and strenuous efforts are being made to ensure New Zealanders share the benefits of this growth. We certainly have to do everything we can to maximise our opportunities in facing the current uncertainties.

The latest tourism data confirms that our tourism sector has gone from strength to strength. Of course, there must be fluctuations in that growth. This year, we've seen the release of the New Zealand Tourism Strategy 2010, and a strong, supportive industry and government response to it. And of course the Visitor Information Network is embracing some new directions for the organisation.

This Government is committed to working in partnership with the sector to ensure that the tourism industry is able to operate in a sustainable manner, realising its full economic, social, environmental and cultural potential.

I¡¦ve accepted many opportunities since becoming Tourism Minister to speak to tourist operators around the country about the Government¡¦s role in tourism and the future direction of tourism in New Zealand.

It has been pleasing to see first hand the optimism that has been a key driving force of the industry. New challenges now require of us that same optimism ¡V and determination.
There is strong support from the community and commitment from the industry to the role that tourism is playing in the growth of our economy and in the development of our society. With this success comes high expectations for continued growth and development in the future.

In order to meet these expectations, it is essential that we do everything we can, to maintain the contribution tourism is making to our key goals, such as boosting foreign exchange earnings, increasing employment, developing regional New Zealand and addressing disparities.

I have also worked to have the enormous contribution that tourism makes become more widely recognised. I believe that our objectives for the year ahead and our direction for the next decade will, with your help, see us do just that.

The latest figures from the Tourism Satellite Account provide a clear picture of the current significance of tourism to our economy:

„h There was $13.2 billion of total tourism expenditure in the year ending March 2000 ¡V an increase of $1.2 billion from the previous year and up by 45% on 1995 figures.
„h 9.7% of New Zealand¡¦s GDP was directly and indirectly contributed by tourism.
„h A total of 163,000 full time jobs were estimated to be directly and indirectly supported by tourism ¡Vthat is more than one job in ten.

The latest forecast figures announced at the tourism conference in Rotorua indicate that in the medium term we can expect the positive trends to continue. Again, it is too early to realistically factor in the extent of the impact of recent events, for either inbound or domestic travel.

In any event, it is vital that the tourism industry seeks to invest in its future growth through knowledge, intelligence and innovation. I am pleased to say that New Zealand already has several mechanisms that will assist to achieve this.

The New Zealand Tourism Strategy 2010 is one such mechanism.

One of the key issues at the heart of the Strategy is sustainability. More carefully considered destination management is going to be required to ensure that those qualities that differentiate us from others in the global market place are protected and will continue to play a significant role in our tourism industry.

We all know that we have a lot going for us - a high-quality, diverse natural environment, the uniqueness of our Maori culture, a vibrant, sophisticated New Zealand heritage, and the reputation of our friendly, warm people.

It is certainly these attributes that our international visitors seek to interact with during their New Zealand experience. It is of paramount importance that these qualities are not compromised or allowed to degrade in any way as we continue to develop our international and domestic visitor industry.

In recent years, we have all been encouraged with the growth in international visitor arrivals. However, encouraging more visitors in peak season places greater pressure on our natural, built, cultural and social environment.

Increasing visitor numbers, domestic and international, is important, but it is just as important to encourage those visitors to come at different times of the year, to stay longer, to spend more and to experience a wider range of products and regional destinations.

VIN offices can continue to make a valuable and indeed key contribution to achieving this.

The Tourism Strategy presents opportunities for economic development, in regions like Hawkes Bay and many others. There is a strong and growing interest from our domestic visitors, and returning international visitors, in getting off the beaten track and exploring different parts of our country.

Many of our regions already do a good job of capitalising on their assets and I hope that a stronger focus on regional differentiation will give some of our hidden regional treasures a chance to claim their fair share of the limelight ¡V and the benefits.

You may be aware of the work of the Tourism Research Council New Zealand. I established this organisation last year in partnership with industry to provide credible, authoritative and integrated tourism research, information and forecasting.

I referred earlier to the need to invest in future growth through knowledge and intelligence. Research is vital to the business of tourism industry operators.
The work of the Tourism Research Council will enable the resources the Government commits to research 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.

Another of the key principles underpinning the Strategy is that of public/private commitment. 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.

The Strategy also recognised the need to strengthen other relationships, including the relationship between local and central government.

VIN has positive experience to share in this area, which could serve as a useful model for other agencies.

The alignment of all tourism industry players in both government and the private sector will not only allow for the rationalisation and more effective and efficient use of resources, but will also drive a more coordinated approach to ensuring that we achieve sustainability.

This partnership approach is why I have been asked by Cabinet to investigate how the good work Tourism New Zealand can be enhanced as a joint-venture international marketing organisation.

I would like to assure you that while this process is being undertaken, it¡¦s business as usual for Tourism New Zealand and for the excellent 100% Pure brand that has been established.

Another Strategy recommendation that the government has acted on, is the establishment of a Ministry of Tourism, to give the sector a stronger voice within government.

The new Ministry, which will enhance the role of the Office of Tourism and Sport, will come into existence in early 2002.
In the intervening period, I will be considering resourcing and priority setting issues, to ensure that the Ministry hits the ground running in this enhanced tourism policy environment.

As the Minister of Tourism, I am proud that the Government has responded strongly, decisively and with commitment to the implementation of the Strategy and to effecting its recommendations where they are the responsibility of the public sector.

The key institutional changes that I have set out are not about making changes for the sake of it. On the contrary, they are about formalising the partnership relationships that contributed so strongly to the New Zealand Tourism Strategy development process.

These changes will, I am sure, result in a more responsive Government engagement in the tourism industry and, in turn, will benefit the industry.

The Tourism Strategy 2010 made it clear that a strong and independent Visitor Information Network will be important in achieving our goal to market and manage a world-class visitor experience.

The fast-growing free and independent traveller (FIT) sector relies heavily on nationwide availability of reliable, accessible, friendly information and advice.

VIN offices have a strong record of providing that service, to domestic and international visitors to New Zealand. As Minister of Tourism I would like to take this opportunity to thank you for your excellent contribution to the success of the sector.

You will be hearing in detail from your Chairman, Kerry Marshall, about the outcome of recent work to revitalise the relationship between the Visitor Information Network and Tourism New Zealand.

I won¡¦t steal Kerry¡¦s thunder, but I would like to say that I am encouraged by the new developments. VIN has always had a direct and strong relationship with local government.

I am pleased that you have identified a need to complement that by strengthening VIN¡¦s relationship with central government, through new arrangements with Tourism New Zealand.

I understand that VIN is also moving ahead on another aspect of the Tourism Strategy recommendations, by reworking your logo to incorporate the distinctive New Zealand fern mark brand. I hope other stakeholders will follow your lead.

I am told that other exciting developments are underway in promotion and strategic planning. I look forward to hearing more.

I want to finish with some brief comments on the conditional agreement to assist Air New Zealand retain its role as a viable New Zealand airline.
Under the terms of the agreement, the Government has agreed to assist Air New Zealand with a loan facility of up to $550 million.

It is important to note that this loan facility is being provided by the Government on strictly commercial terms, requiring that the taxpayer receives a return on the investment. It is also conditional on Singapore Airlines and BIL injecting more capital by an equity subscription of $150 million each.

In addition, a national interest package is to be a part of the final package to ensure maximum ongoing benefit for New Zealand. This is likely to include preservation and expansion of Air New Zealand's overseas routes, getting more out of Air New Zealand's membership of the Star Alliance, increased contribution from Singapore Airlines in promoting New Zealand tourism, and the retention of maintenance workshops in New Zealand.

The agreement allows for Singapore Airlines to own up to 35% of Air New Zealand. The majority of a nine-member board will be New Zealand citizens and the chairperson will be appointed with the agreement of the Government.

The Heads of Agreement comes after over two months of negotiations between the Crown negotiator and Air New Zealand and has the approval of the Cabinet Subcommittee, of which I was a member, as Minister of Tourism.

The agreement is subject to due diligence by the three parties ¡V which will take place over the next four to six weeks ¡V and the agreement of the company's bankers.

There has been an enormous amount of misunderstanding over the past two months of the government's position. I want to be quite clear ¡V there has been no dithering.

From the beginning, the government was seriously negotiating a lifting of the foreign ownership cap. However, it became clear that the original recapitalisation proposal would not have worked ¡V the problems facing Air New Zealand were far greater than first thought.

Without the disinvestment of Ansett Australia, and the availability of a loan facility, Air New Zealand could not survive.

The New Zealand government took all appropriate and reasonable steps to ensure that our National Airline could continue.

Events of the last two days highlight that there are still major issues ahead. But it is to be hoped that the airline can now focus on rebuilding as a strong international and domestic carrier.

With that, I would like to once again thank you for asking me to address you today.

It¡¦s an important part of my role to have the opportunity to attend key tourism meetings, to meet with and hear from key players in the industry.

I would also like to encourage you to celebrate VIN¡¦s considerable achievements. I look forward to our continued partnership, and wish you well for the remainder of your conference.