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Opinion: Sandflies hover at tourism's big picnic

By Adam Bennett of NZPA

Friday 17th June 2005

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This week's Tourism Rendezvous New Zealand (Trenz) industry event in Christchurch was a predictably upbeat affair.

Aside from the teflon-clad optimism expected from any business no matter how it's doing, tourism has a lot of things to feel good about right now.

The September 11 attacks which put aviation and tourism around the world into a tailspin haven't had as much negative long-term impact as feared.

At the same time, national carrier Air New Zealand is forging ahead with its low-cost, Internet-savvy business model, after taxpayers pulled it out of its calamitous 2001 nose dive.

That transformation is ensuring the steady on-going delivery of cashed-up overseas visitors. Other airlines, such as Emirates and Pacific Blue, have also added New Zealand services.

Stimulated by lower airfares, the spectacular scenery featured in The Lord of the Rings film trilogy and Whalerider's fresh presentation of Maori culture, as well as the seductive call of the wild in Tourism New Zealand's award-winning promotions, overseas visitor numbers have grown strongly.

Rising 11.2% last year, there are now twice as many short term visitor arrivals each year as a decade ago.

Our overseas guests spent $6.3 billion here in 2004 - contributing about $500m in gst to the government's now-bulging purse.

If you divide agriculture into its component sectors, as the Tourism Industry Association (Tianz) does, holidays are now our biggest export earner.

Domestic demand is also robust.

"The industry is really in good heart at the moment. We've been a very hot destination. We're doing pretty damn well," Tianz chief executive Fiona Luhrs said.

"In the 10 years I've been coming to Trenz, what I see here today is just so much sharper and smarter and more professional - it's really making strides. It's a great story what's happened in the industry."

That kind of sentiment was evident on the vast floor at the event, billed by organiser Tianz as New Zealand's "largest and most comprehensive business meeting".

Many of the 440-plus exhibitors such as regional tourism organisation Venture Taranaki's Dominic Moran and Bryan Hughes of Rotorua's Hell's Gate Thermal Reserve, four- and five-year veterans of the event, were pleased to talk about their best-ever response from overseas buyers.

But looking beyond the buzz generated at an event that could drum up as much as $2 billion in business, there are a few sandflies circling at tourism's picnic.

The relative strength of our currency is a particularly big, pesky and persistent one.

As in other export sectors - it's sucking some of the life out of tourism's returns and driving potential visitors elsewhere.

"The movement in the exchange rate has made us dearer and we've seen that in the last few lots of stats coming through," Luhrs said.

Despite their rise in numbers last year, visitor spending actually decreased by 1.3%.

While the average spend per day was relatively flat, the kicker was a fall in the average length of stay.

Of course the kiwi's strength is the flipside of the greenback's bout of weakness over the past couple of years.

That has made the US a more attractive international destination at a time India, Southeast Asia, South America, Africa and China have also grown in appeal.

Add to that mix Australia, which has a much larger marketing budget than us, and things are "getting interesting", Luhrs said.

Most recent data suggests visitor numbers are stagnating.

Nevertheless, Tianz and Tourism NZ - which doesn't have a fantastic record on forecasting this - believe visitor numbers will grow at about 6% a year from about 2 million in 2004 to 3 million by 2014.

That optimistic scenario, should it come to pass, would present problems of its own, not least of all pressure on the environment, labour market and infrastructure.

Cited by tourists as New Zealand's primary drawcard, the industry has recognised the natural environment as its "greatest asset" and treasures its relationship with the Department of Conservation (DOC) as "incredibly important".

DOC spokesman Andy Thompson assured the news media at Trenz the department was confident it could manage the projected increase in visitor numbers, "and beyond".

Furthermore, he said, if DOC could get its hands on some of the tax money resulting from the increase, its work would be aided and the environment would benefit.

Luhrs said Tianz intended to be vocal in encouraging further government support for conservation work.

Meanwhile, Tianz has pointed out that one in 10 New Zealanders now work in jobs generated by tourism-related demand, and the industry has created 26,000 new jobs in the past five years.

Luhrs said the industry would likely require more than 30,000 new staff by 2010, but attrition and churn would take that figure to over 120,000.

"That is an issue that is a really big one for the industry and there are challenges there around how to best train people."

That is particularly pressing given that with more than a third of growth in visitor numbers over the next decade expected to come from Asia, demand for staff with language skills will soar.

But for all the talk of growth in numbers, a clear theme at Trenz was the industry's targeting of the premium end of the market, to gain yield rather than volume.

Luhrs pointed out: "We're a long way away from everywhere else, and there's really only one strategy and that's to be a premium niche market...

"When you're this far away people are always going to have to dole out a reasonable amount to get here - other than Australians."

To do that New Zealand needs to maintain or lift the quality of its offerings, Tourism NZ chief executive George Hickton said.

Hickton announced on Tuesday that from 2007, all companies wanting to be included in Tourism NZ's overseas marketing efforts would require quality accreditation.

At the moment Tourism NZ's joint venture with the Automobile Association - Qualmark - is the only game in town.

"We do not believe we can continue to take with us people... who don't have some degree of assurance about the style, the quality and the safety of their business," he said.

The Qualmark announcement shouldn't have been too much of a surprise to industry participants.

It was part of the Tourism Strategy 2010 document released four years ago which set out a plan for New Zealand to maintain and further its status as a premium destination.

Qualmark will cost operators from "a few hundred dollars", to about $5000 for an annual license fee depending on their size by staff or turnover.

It was an industry service rather than a revenue gathering exercise, said Luhrs, who headed up Qualmark before taking over at Tianz.

Tianz and Tourism NZ hope Qualmark will swat away their concerns about industry standards, but they may have a tougher time lobbying for more Government funding for promotion and conservation.

There is next to nothing they can do about the currency.

"The point we want to make to our members is that even though there are challenges, this isn't anything to panic about," Luhrs said.

"But we're always keen to make sure that we don't get complacent, and so what we're saying to people is `hey there's some interesting things happening out there and we need to factor those in when we do our business plans'."

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