Speech to Auckland tourism operators

The New Zealand we grew up in earned its keep from industries like sheep, meat, butter and cheese. We still do. But, at 19.2 percent of our total export earnings, tourism is now New Zealand's number one foreign exchange earner, a cornerstone of our economy.


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Kia Ora

Thank you for the opportunity to speak to you this afternoon.

Firstly, I'd like to congratulate our hosts, the Langham Hotel, for their outstanding success at the recent New Zealand Tourism Awards here in Auckland.

The Langham Hotel won both the hotel accommodation and overall visitor accommodation categories in the awards.

It's an excellent achievement, and one which John Dick and his team here at the hotel can be extremely proud.

Congratulations, again.

The New Zealand we grew up in earned its keep from industries like sheep, meat, butter and cheese. We still do.

But today it's a different world, as we all know.

At 19.2 percent of our total export earnings, tourism is now New Zealand's number one foreign exchange earner, a cornerstone of our economy.

The latest figures we have show that in the year to July, overseas visitor numbers rose 3.7 percent to just under 2.5 million.

International visitors last year added $8.3 billion to our economy and were looked after by the nearly 10 percent of New Zealand's work force - because that's the percentage of our population that is employed in our tourism related industries.

What the figures show is that New Zealand is a hot destination. People want to visit New Zealand, and we have the welcome mat out.

The challenge is to maintain and build a sector that has become integral to our economy.

A few weeks ago I released Ministry of Tourism forecast data which predicted we'd see on average a 4 percent rise in international visitors each year through to 2013.

It's figures like these that have prompted the Government, in partnership with industry, to take another look at where we're going and what needs to happen to get us where we want to be.

On November 7th, the New Zealand Tourism Strategy 2015, will be released.

As I said, this has been developed by the Government and our industry and aims to guide the tourism sector's sustainable development to 2015.

That word sustainable - quite rightly on everyone's lips these days - usually implies the need for responsible environmental policies.

But what people now realise is that sustainability applies across every economic, social and cultural area of our lives as well as environmental.

And it doesn't take much to see that as New Zealand's biggest foreign exchange earner, our industry - tourism - is very much where the rubber meets the road.

Underlining our willingness, and ability, to welcome visitors to share what our beautiful country offers, lies the need for critical thinking - not only on what impact we have on tourism but also what happens after tourists have gone home.

New Zealand has for 8 years been marketed as '100% Pure' and for over 100 years on our natural features.

The New Zealand Tourism Strategy 2015 aims to ensure we live up to that '100% Pure' promise by making sustainable business practices central to the tourism industry's vision for the future.

The Strategy's recommendations seek to ensure that, through to 2015 and beyond, New Zealand tourism delivers a world class visitor experience by focusing on quality.

I encourage you to read the New Zealand Tourism Strategy 2015 closely when it's released, and also the sector guides that will follow it.

The plan is these sector guides will explain what the Strategy specifically means for your business, for example the accommodation sector - to link vision and reality.

Achieving our goals will require every one to play their part. The Guides are unique in that they outline what action you personally can take to play your part in implementing the Strategy.

From the Government's side, we've implemented several initiatives over the past year to help build awareness, and accelerate sustainable tourism business practices.

These include funding Qualmark to develop environmental accreditation criteria. These will be up and running by the end of the year and I encourage you all to find out what opportunities are on offer.

The Government also recently published a set of eight best-practice sustainability guides, in hard copy - and they're also available on the Tourism Ministry website.

These Guides group sectors like accommodation, freshwater activities, transport, and so on together, and cover issues like minimising waste, conserving water, developing a business action plan, and gaining Qualmark endorsement

Sustainable businesses make smart business sense and increasingly, sustainability is what people worldwide are demanding in every aspect of their life.

New Zealanders are in no way exempt. They also increasingly expect businesses to act responsibly on environmental issues, and that includes the tourism sector.

You may recall research undertaken in January, which found that 27 per cent of New Zealanders, or about 1.17 million people, said they avoided buying products or services from companies whose business impacted on society and/or the environment.

Nearly 280 thousand people said they'd made such a decision the week they were surveyed.

The survey also indicated up to 1.4 million New Zealanders would willingly pay a premium for products and services which offered positive social or environmental benefits.

Half of our tourism spending comes from domestic tourism - thanks partly to the great work of the Automobile Association and Regional Tourism Organisations like Tourism Auckland - but we also need to remember our offshore visitors have the same expectations.

Today, many international travellers take into consideration the effect their travel has on the environment, including what level of green house gas emissions would be generated simply by flying anywhere.

For tourism businesses like ours situated at the end of the world, any long haul emission guilt must be appropriately countered.

Our thinking must change. It is, and rapidly, as we realise the challenges and opportunities before us. Today marks the Labour-led Government's response with the announcement by the Prime Minister of the emissions trading scheme.

Another key focus of the updated New Zealand Tourism Strategy is increased returns, including growing visitor expenditure, as well as financial returns for individual businesses through the value obtained from each visitor.

The forecasts I mentioned earlier show that while our international visitor arrivals are expected to grow by 4 percent, the really good news is in the visitor expenditure forecasts.

The expectation is international visitor expenditure will grow at an average annual rate of 7.4 percent.

Tourism sector returns will also improve if we can iron out seasonal peaks and troughs - those ups and downs which are a well-established characteristic of our industry.

Included in the New Zealand Tourism Strategy 2015 will be the ambitious target of increasing international visitor arrivals in March, April, September, and October, in other words the shoulder months.

The focus is on increasing international visitor arrivals in those months at a rate 25 percent faster than the overall annual forecast on a year-on-year basis to 2015.

To achieve this target, it goes without saying that international visitors need compelling reasons to come here.

One such compelling reason often quoted is the business to be had from hosting conferences and conventions.

These can offer enormous potential for generating demand in shoulder and off season periods. They can generate high expenditure, include leisure travel add-ons and don't clash with high demand in peak seasons.

However, as the Strategy states, growing this market to the desired level would require a venue capable of hosting major conventions, and that venue would likely need to be situated in Auckland.

This raises some obvious questions - some basic, some more complex:

1. what size convention centre are we talking about?

2. where would you put it?

3. how much is it going to cost? who benefits from it? and who's going to pay for it?

Questions are also likely to be asked about whether a convention centre is realistic given Auckland city's capacity.

We have to work through these questions very carefully and look at all the options before us.


Our tourism product is New Zealand, in its entirety. Our actions will therefore be designed to promote and encourage sustainability beyond the tourism industry.

The need is to develop initiatives to minimise carbon emissions, maximise energy efficiency, reduce waste, and enhance conservation values.

This means we need buy-in across the economy for the Strategy to succeed.

One way the tourism industry could do this is to take up opportunities that link with other government initiatives and projects

The Metro Action Plan is an example of a growing trend towards greater collaboration to achieve a common good.

Released by the Auckland region last year, the Metro Action Plan is being progressed by the Auckland Regional Council in partnership with Government.

As I'm sure you all know the Plan aims to deliver a single, integrated approach to lifting Auckland's productivity by co-ordinating infrastructure planning, decision-making and investment, as well as working to ensure the region has a secure energy supply and affordable, high-speed broadband.

Central government and the Auckland region both agree developing Auckland as an internationally competitive world class city is essential.

A number of initiatives are already underway that directly relate to this aspiration:

1. An Auckland regional visitor plan which is predominantly focused on a whole of region approach to the visitor experience - cruise ships, transportation etc

2. Development of a regional brand for Auckland, and

3. The development of a major events plan for the Auckland region.

International evidence highlights the importance of having at least one outward facing, global city to lead a nation's economic development.

An internationally competitive city attracts first-class firms and highly skilled workers which have significant flow on effects throughout the economy.

Auckland is the only New Zealand city that can be transformed into an international city of scale, in other words, what's good for Auckland is good for New Zealand

Currently, Auckland hosts around 22 million visitor nights every year. The forecasts, however, indicate that figure will rise 24 percent to around 28 million nights by 2013.

In the same period, visitor expenditure is expected to increase 55 percent.

Meeting these challenges will require that Auckland has a fit-for-purpose infrastructure, operates as a launch pad for businesses to compete internationally, and be New Zealand's gateway to the world with strong connections with the rest of the country.

In terms of infrastructure development, I am conscious of the support of some people for the development of Whenuapai airbase as a second international airport for the Auckland region.

The establishment of commercial operations at Whenuapai is a possible future use for the airport.

Any decision on the matter, however, will depend on the manner and extent to which the RNZAF's operations are consolidated at Ohakea.

Consideration on the future use of Whenuapai cannot start until analysis of the nature, scale, and timing of redevelopment work at Ohakea is complete.

I'd like to assure you that when the Government is in a position to give further consideration to Whenuapai's future, interested parties will be consulted before any decision is made.

Auckland's infrastructure will also be an important factor in determining New Zealand's success in hosting the 2011 Rugby World Cup.

With an estimated global viewing audience of 3.4 billon and 60,000 international visitors, hosting the Cup presents years of opportunity to showcase Auckland and the rest of the country to the world. And that's even before the first kick-off.

The Government is in the early stages of developing a tailored leverage and legacy strategy to capitalise on all this attention.

And of course the plan will have other uses: we'll be able to put it into practice when we bring the America's Cup back in 2009.

Conclusion

In closing, I'd like to say how much I appreciate industry operators' ongoing support.

We are entering a truly exciting phase with the industry's revised national strategy, and I intend to continue to work closely with the sector.

Thank you once again for inviting me to speak today.

Thank you.