No gain without pain

While Kaikoura’s pain has been well documented, there’s no denying New Zealand’s tourism industry has generally been experiencing a major growth spurt. 

NZBusiness reviews its performance and highlights some shining stars.

The magnitude 7.8 earthquake that rocked the Kaikoura region just after midnight on November 14 came at a time when New Zealand’s tourism industry was on a major roll. 

Fortunately, at the time of writing, there’s no evidence to suggest that the boom times are about to go away.

Figures from independent industry body Tourism Industry Aotearoa (TIA) reveal just how well the sector’s been performing. Its 2016 Tourism 2025 Scorecard (www.tourism2025.org.nz/making-it-happen/tourism-2025-scorecard-2016) tracks progress across a range of measures, including expenditure, visitor experience, connectivity, productivity and seasonality. The numbers are impressive whichever way they’re diced and sliced. 

Total visitor expenditure grew 12.2% over 2015, with 7.4% wth in domestic tourism (the best rate in a
decade) and 19.6% growth in international visitor expenditure (a record). 

The drivers of growth include better international air connectivity, particularly from China. 

The rising middle classes in key markets in Asia and South America, combined with improved economic conditions in our traditional European and North American markets, are all supporting growth, says Chris Roberts, chief executive of TIA. “There is no doubt that the New Zealand tourism offering is very appealing to travellers around the world.”

In an industry that’s dishing up a wealth of positive statistics there are two other figures that can’t be ignored either. More than 86 percent of tourism businesses are SMEs, many with fewer than five staff, and tourism directly or indirectly supports 13.2 percent of the total number of people employed in New Zealand. 

If you’re not impacted by the Kaikoura quakes, then these are indeed boom times for tourism businesses. Roberts says many are taking on extra staff to meet demand, and improving their productivity. “Many are also now able to reinvest back in their businesses to improve quality and enhance the visitor experience.”

He’s excited about the recent trend towards growth in the shoulder seasons, helped by Tourism New Zealand focusing its international marketing efforts on attracting people here outside the traditional peak season. There’s also been success in encouraging people to visit more regions. “Boosting the productivity of tourism businesses around the country is a priority.”

TIA has launched an innovative new online tool, DGiT (Domestic Growth Insight Tool), to support operators to grow their domestic tourism market. Domestic tourism is still the lifeblood of many tourism SMEs.

Of course, with growth comes associated challenges. While helping tourism businesses in Kaikoura and the wider region to recover is of prime importance – there are other general issues impacting on the sector too. 

Ensuring New Zealand has the infrastructure to cope with growing visitor numbers, including accommodation, transport, water and sewage facilities, roading and car parking, is one
such issue. 

“The Government has introduced the $12m Regional Mid-Sized Tourism Facilities Fund but much more is needed to support smaller communities and ensure visitors enjoy high quality experiences,” says Roberts. “TIA is leading an infrastructure project on behalf of the tourism industry to identify infrastructure priorities.” (https://tia.org.nz/advocacy/tia-projects/infrastructure-and-investment/)

Roberts’ advice for industry newcomers is to get the basics right. “That’s high-class product, staff that go the extra mile, and a sound business plan.

“Work with your local Regional Tourism Organisation to identify opportunities, and collaborate with other businesses to offer attractive packages that appeal to visitors.” 

Christchurch’s tourism revival

If Christchurch’s example is anything to go by, Kaikoura tourism businesses could have a hard road ahead. But on the scale of things, it should bounce back much faster.  

Although the Christchurch tourism landscape changed after the 2011 earthquake, literally and figuratively, six years later the feeling amongst business owners is largely positive.

Vic Allen, CEO of Christchurch & Canterbury Tourism (CCT) acknowledges that the lack of accommodation impacted heavily on Christchurch’s role in the South Island road trip market. Potential tourists, especially Australians, shied away from the devastation. 

But today, while visitor numbers to Christchurch still fall short of pre-quake levels, the total dollar spend in the city exceeds it – representing some $2 billion per annum, with a further $1 billion spent in the surrounding region. 

The increased spend is partly the result of direct China Southern flights bringing higher spending Chinese tourists. Many Australian tourists, on the other hand, fly direct to Queenstown – often preferring to spend their entire holiday in the Southern Lakes district.

Having the ruins of the iconic Christchurch cathedral portrayed as a representation of New Zealand’s earthquakes on Australian media doesn’t exactly help the situation either, says Allen.

But the tourists who do come like what they see. A CCT survey last year revealed an 81 percent ‘satisfied’ or ‘very satisfied’ rating for the Christchurch tourist experience. 

Old favourites such as punting on the Avon, the Botanic Gardens and Antarctic Centre still have pulling power, and many tourists come because they’re fascinated to see an entire central city rebuilt, says Allen.

New attractions such as the Christchurch Adventure Park in the Port Hills are also tipped to improve overall tourist numbers. The biggest, highest mountain-bike park and zipline in Australasia will be a major drawcard.

Black Cat Cruises, based out of Akaroa, are also proving popular. “Most visitors didn’t know there were dolphins around Akaroa before they set up,” says Allen.

Quality retail precincts in the Christchurch CBD are finally coming on stream, and Worcester Boulevard, with its, cafes, museums, and ‘Old Christchurch’ ambience, is fast becoming a tourist hub.

Allen believes the past six years in Canterbury prove that tourism businesses must constantly adapt their product to suit changing markets. “For example, the Japanese, the Koreans, and now the Chinese, all have specific requirements.

“Asia is moving closer to New Zealand all the time. It’s now more important than ever to adapt to the changing cultural needs of our visitors.” 

The Coromandel
Around an hour’s drive from Auckland Airport gets you to spectacular Coromandel Peninsula – a geographic sweet-spot that harnessed video to market its story to the world.

Hadley Dryden, general manager, Destination Coromandel, is particularly proud of the GoPro campaign used to promote the region online.

“It wasn’t limited to a specific market but was relevant to specific interest groups that we knew our region could deliver upon,” he says. “The fact that GoPro got on board exposed the Coromandel to an audience we would never have otherwise reached.”

The plan was simple, shoot The Coromandel purely on GoPro and hope that people would share it via their channels, explains Dryden. “We had to secure quality footage and present it in a non-commercial way. We’re a fairly lean operation, we took a calculated risk to invest in reputable cinematographers and send them around our backyard for a demanding ten-day shoot. 

“The stars aligned right from the start – barrelling surf, amazing sunrises, bluebird days; Orca even swam by while they were diving!”

He says exposure from the campaign has been “significant” and continues to grow – tracking at around one million organic views across all episodes on multiple digital channels. 

“GoPro immediately licensed the footage and went to work creating their own edit. This gave us the credibility required to secure further promotion from the likes of Crowd Goes Wild TV, who filmed separate surfing and canyoning adventures for their show.”

Dryden uses Cathedral Cove Kayaks as a stand-out example of how to get it right in the tourism business.

“They have the luxury of showing off one of the country’s most popular natural attractions. Yet they’re never complacent and always grateful for the opportunity to showcase their backyard.

“Employing staff that fit with their culture is critical to their success. Because of this they consistently deliver quality tours in a laid back way that epitomises the Coromandel lifestyle.”

Canyonz is another example. “A relatively new business that’s unleashed a bucket list experience. “Their full-day canyoning adventure is an epic 300-metre descent down Sleeping God Canyon. Everything about it is so raw, which is hard to come by in an increasingly commercial industry,” says Dryden.

“Of all the successful tourism businesses I’ve come across they’ve all got one common trait – a positive persona. Bularangi Harley Tours is a great example; salt of the earth characters only too happy to help promote the Coromandel, even if they’re unlikely to benefit. They understand the bigger picture of collaborating to compete and gain market share.” 

Dryden believes tourism is currently all about destination management.

“The season is getting longer and visitation is at an all-time high. This has come with its own challenges which has seen central government develop initiatives to drive visitors to the regions while also improving basic infrastructure where required. 

“This will become increasingly important in the foreseeable future. 

“Could we be doing anything better? If I had to pick one thing it would be the need to adequately fund DOC to manage the conservation estate. Our reputation depends on it.”

Dryden’s looking forward to a number of new tourist initiatives for the region, many involving new waling and bike trails.

“If development helps to preserve the natural attributes that attract people here in the first place, then tourism’s contribution to the local economy will continue to grow.”

Selling the luxury
New Zealand’s luxury tourism sector continues to expand and evolve, with the visitor demographic diversifying. Accommodation specialist MajorDomo is one of an increasing number of businesses driving growth in this space.

For Fiona Stevens and Lisa Hayden it began one day over a coffee, followed by a wine, or two.

“We got chatting about business ideas and decided to take advantage of a gap we identified in the niche luxury accommodation market,” says Lisa. 

“We both shared a vision of delivering exceptional service to both owners and guests, but wanted it to be fun for us and our guests. Because luxury doesn’t have to be stuffy and unapproachable, they’re on holiday after all!”  

MajorDomo, their nationwide luxury holiday accommodation, tourism experience and concierge service business, was the ultimate outcome of that chat. The business launched in June 2013.

In addition to a broad potential client base, Fiona and Lisa brought complementary skills to the business.

“Fi has a long, strong history in travel and the luxury tourism industry and my background was in a recent start-up in Melbourne and, prior to that, investment advisory,” says Lisa. 

“MajorDomo is a European term which loosely translates as ‘the manager of a large country estate for absentee owners’. The name seemed appropriate given holiday homeowners are trusting us to market and manage their significant investment.”

The timing for MajorDomo couldn’t have been better. “When we launched Tourism New Zealand was about to initiate their premium sector strategy to engage and encourage high-end visitors to New Zealand; they did a fantastic job,” says Lisa.

“We invested heavily in technology, such as an easy-to-use website with mobile capability, live reservations systems, social media and search engine campaigns. If someone wants a villa or lodge holiday in New Zealand, we want them or their agent to find us and enjoy the experience.”

Fiona and Lisa say the luxury tourism sector delivers unique benefits. Tourists stay longer and spend more money so the relative economic benefit per premium visitor is larger. And they really ‘get’ New Zealand. 

“They come back often, talk about their experiences and encourage friends, family and colleagues to come too,” explains Lisa. “Their varied interests spread the economic benefit over the whole year, in terms of what they do and when they do it, which helps reduce the number of ‘low season’ periods and evens out cashflow for operators and suppliers.” 

Both women believe the ‘luxury’ product that New Zealand is putting out there is outstanding. It was spearheaded by the luxury lodge sector, and now it’s being extended to the private villa market.

Coming on stream in December 2016, the Mahu Whenua Ridgeline Homestead & Eco Sanctuary is MajorDomo’s latest property. Its story is its biggest drawcard: four iconic high country sheep stations over 155,000 acres; Mutt Lange’s vision to regenerate the land including an endangered native bird breeding programme and the planting of over 1,350,000 native trees and shrubs; and more than 90 percent of the land under QEII Trust covenants – ensuring this largest conservation undertaking on private land in New Zealand’s history is protected in perpetuity. 

“Mahu Whenua means ‘healing the land’ and visitors will be inspired and awestruck by the beauty, diversity and scale of what surrounds them,” says Lisa. “Top that off with exclusive use of the gorgeous Ridgeline Homestead and cottages, a private chef, activities guide and concierge, all only 20 minutes from Wanaka, and you have the recipe for the most unique holiday in New Zealand.”

Fiona and Lisa believe the luxury tourism sector will continue to expand and evolve, and the visitor demographic will diversify. 

“We see increasing demand for inter-generational travel options as family time becomes more precious and grandparents are more healthy and active for longer,” says Lisa. “Hands on eco-tourism and ‘slow tourism’ are also emerging themes in the premium sector.”

They plan to continue offering guests exceptional service and experiences, and be the ‘go to’ luxury accommodation specialists, “keeping in mind it’s not all about the accommodation but the activities and personal touch that you wrap around it”. 

Our shining stars
Every year the tourism sector acknowledges its stand-out performers, and there is no shortage of contenders.

For example, Rotorua Canopy Tours, the New Zealand Tourism Awards Supreme winner for 2016, has only been operating four years, but delivers an exceptional visitor experience combined with a commitment to improving the environment in which it operates.

Another Awards winner is Waitangi Treaty Grounds. It has transformed itself in the past four years and achieved financial and visitor growth beyond expectations. “It displays a new-found pride in its rich Maori culture and is vital to the economic wellbeing of the local community,” says TIA’s Chris Roberts.

Another stand-out performer contributing generously to its local community is Matamata’s Hobbiton Movie Set & Farm Tours.

The winner of numerous tourism awards, Hobbiton hosted 468,000 visitors for the year to March 31, 2016 – a 25 percent increase on 2015. General manager and unofficial ‘lord of the Shire’, Russell Alexander, says on a busy day they’ll have 3000 people through. The business operates seven days a week and staff numbers peak at 230.

Alexander, who has an extensive farming background, says although the destination is connected to Wellington’s film industry, the brand now has a life well beyond the movies. In fact, many visitors have never seen the movies.

His formula for growing the business is to introduce something new every year. “To be innovative and the best we can be.”

Planned for 2017 are a new shop, kitchen, toilet-block and wash-room to cater for increasing visitor numbers; “and perhaps some new offices and training facilities”.

“The most exciting thing about Hobbiton is that every day there are new challenges and experiences, and decisions to be made,” says Alexander. 

He believes the biggest challenge has been growth management. His advice is to employ people earlier rather than later and keep on empowering young people. 

“They can make you better and look even better.”

Northern highlights

Northland has its share of high performing tourist businesses. Many have been around for a long time.

Dive! Tutukaka is one such business. Founded in 1999 by diving buddies Aussie Malcolm and Jeroen Jongejans, the vision then was to be the best dive operator in New Zealand.

Jongejans says that still holds true today, although nowadays a third of their business covers non-diving activities such as kayaking, snorkelling and eco-trips – exploring the “big, dramatic stories” associated with the coastline.

Jongejans has lived on the Tutukaka Coast, running dive operations, for almost 30 years. Sinking the HMNZS Tui and Waikato just off the coast was his idea, and wreck divers have been thanking him ever since. 

He is a committed lobbyist for World Heritage Status for the Poor Knights and an advocate for Marine Reserves and National Parks around New Zealand. His big goal to encourage future tourism is setting up a Marine Park off Tutukaka, allowing a significant part for recreational fishing only and about ten percent in ‘no take’ areas.

“We’ve got to get smart with marketing our marine environment. Imagine being able to catch two kahawhai and cook them locally. It’s about selling a point of difference.”

Jongejans is part of the driving force behind the proposed Hundertwasser & Wairau Maori Art Centre in Whangarei – still requiring funding but, when completed in 2019, tipped to be a tourist attraction on a par with Kawakawa’s famous Hundertwasser public toilet.

He’s seeing sustained growth in Northland’s tourism market and believes the subtropical climate and proximity to Auckland are the major drawcards – not to mention the outstanding attractions.

More Americans are making the trip downunder, he says, encouraged by improved airline connections, and Dive! Tutukaka has been making significant investments to cater for the increased numbers – including an experimental electrically-driven boat and offering more ‘live aboard experiences’.

Looking back, there’ve been many highlights over the years. But nothing pleases Jongejans more than seeing the smiles on people’s faces as they step off his boats.

“Our products offer far more than just entertainment value – it’s about delivering positive experiences and major environmental insights,” he says. 

“And thanks to Facebook and social media, that message gets spread around the world. Every picture paints a thousand words.”