Tourism Export Council New Zealand &
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1 Tourism Export Council New Zealand & Tourism Distribution Channels February 2015
2 Tourism Export Council who are we, what do we do? Founded 1971 Private sector 50 Inbound tour operator members (ITOs) 200 Allied member product suppliers Commercially focused Business 2 Business Promotes & sells your product outside NZ TECNZ buys your product in NZ TNZ Promotes New Zealand RTO s Promotes your region in New Zealand and internationally TIANZ Shares information Advocacy Business tools Qualmark A business assessment system & mark of quality 2
3 We were ITOC Rationale for name change: To improve profile with members and industry 2. Inform some operators in industry that they are involved in the tourism export sector 3. Keep upper mind that tourism is a valuable export industry with local, regional & national government 4. Start the culture shift of the average New Zealander in appreciating what tourism means to our communities and employment opportunities 3
4 Why is tourism considered an export industry? Tourism, like agriculture is one of New Zealand s biggest income earners. Both are export industries because they bring in foreign dollars to New Zealand. With agriculture, you grow an apple, send it offshore and a foreigner eats it. A clear pathway of a New Zealand product consumed or purchased by someone overseas. Tourism works slightly differently: The product is still developed in NZ (just like the apple) It is sold offshore (like the apple) It is purchased by a foreigner (again like the apple) BUT it is experienced in NZ and therein lies the difference. IRD s definition of export is a non resident who purchases products or services from New Zealand. It is important that people understand tourism s role in bringing in foreign earnings to New Zealand and its contribution to the economy as an export industry. 4
5 Tourism in New Zealand Total tourism expenditure $23.8 billion for YE March 2014 International tourism expenditure $10.3 billion Domestic tourism expenditure $13.4 billion 15.3% of total export receipts of goods & services *Dairying 2014 had export receipts of $15.9 billion and 23.7% total exports 8.5% contributed towards GDP (direct & indirect) Employs between 1 in 9 employees = 119,000 direct and 187,000 indirect FTEs $65 million per day industry $26 million per day in foreign exchange earnings $36 million per day in domestic expenditure Tourists generated $1.3 billion in GST revenue 85% of tourism businesses are SME s with less 10 staff Source: Statistics NZ 2013 and Tourism Satellite Account Mar 2014
6 NZ Year-End Dec 2014 Visitor Arrivals Country Visitors % Change Avg Length Stay Avg $ (holiday stays) (spend) Australia 1,247, % 11.5 days $1900 China 264, % 7.6 days $3800 United States % 13.7 days $3900 United Kingdom 194, % 28.6 days $3600 Japan 81, % 11.4 days $2800 Germany 78, % 46.4 days $4900 South Korea 55, % 11.0 days $2800 Canada 48, % 22.0 days $6300 India 33, % 12.5 days n/a Singapore 46, % 12.6 days $3200 Total: 2,857, % Source: International Visitor Arrivals (IVA) December 2014
7 Top Visitor Destinations Region Total Guest Nights +/ Auckland 6,874, % 2. Canterbury 3,239, % 3. Queenstown 2,939, % 4. Wellington 2,377, % 5. Rotorua 1,820, % 6. Northland 1,637, % 7. Nelson Tasman 1,243, % 8. Waikato 1,186, % 9. Bay of Plenty 1,097, % 10. Taupo 963, % 11. Hawkes Bay 947, % TOTAL GUEST NIGHTS: 331,772,341 0% Source: Statistics NZ, Commercial Accommodation Monitor June 2014
8 NEW DATA! RTI s Regional Tourism Indicators The regional tourism indicators (RTI) measure the change in level of expenditure of both international and domestic travellers in New Zealand by region. The data is based on electronic card transactions but excludes cash spending or withdrawls from ATMs or banks Phase 3 will include detailed category spend. eg. Chinese who buy shoes in Wellington or driving through Tekapo and gets petrol Mention: RTE s - estimates 8
9 Figure 2 below shows the proportion of Chinese expenditure across the regions, compared with the UK market. The majority of Chinese electronic card spend is spread across Auckland (62 percent), Bay of Plenty (includes Rotorua) (12 percent), and Otago (14 percent), with the remaining 12 percent spread across the other regions. 9
10 Figure 3 shows the growth in Chinese electronic card spending since The circles on the map represent the overall size of expenditure in the regions and can be seen in context with the overall growth in expenditure. 10
11 The Role of the ITO has changed 11 11
12 Today's Inbound Tour Operator (ITO) 12 12
13 Who are TECNZ Inbound Members? 13
14 Who are Allied Members? Attraction operators eg. Gannet Safaris Activity operators eg. Art Deco Trust, HB Express Accommodation eg. hotels, motels, luxury lodges Transport eg. airlines, train, coach, ferry, car rentals Regional Tourism Organisations eg. DQ, DOC, BCA Publishing companies, tourism consultants, agencies
15 A Guide To Working With Inbound Tour Operators
16 A Guide To Working With Inbound Tour Operators Contents Page:
17 PRICING Managing the Business Mix When each commission level is considered, it may seem that agents receive a large proportion of your takings, eroding your profits. It is important to consider the volume of international business coming from each channel as a percentage of your total business, as well as the benefits of working with the international travel distribution system. Your trade distribution strategy should allow for a business mix which will meet your volume and profit targets. The diagram below shows how a commission structure could work. If the supplier honours pricing as per the distribution system and the supplier receives an equal one third of their business from ITO s, wholesalers and direct from consumers, the average commission works out at per cent. You receive You pay
18 Traditional Distribution Channel
19 Modern Model of Distribution
20 Benefits of working with an ITO ITOs have hundreds of downstream relationships with off-shore travel agents. They will do your international marketing for you. Working with an ITO can bring you: bulk bookings & repeat business on-going (series) bookings conference & event bookings confidence if any adversity should occur eg. Chc enjoyment being part of the tourism industry
21 How to work with an ITO? Do your homework: Work with your RTO who will work with ITOs Visit their website/brochures - check their itineraries ahead of time to determine: Who are their customers? Check their age and if any cultural considerations How long do they spend in your area and what do they do? How many passengers per group or are they FIT/SIT customers? Know their business before you tell them about your business!
22 How to talk to an ITO? 1-2 minute elevator talk 1. Describe your product/event/activity using images or what is new this year 2. How long does it take to experience your product/benefit of your accommodation 3. How many can you accommodate? e.g. 2 groups x 20 pax in 3 hours 4. Can you package with other operators? 5. Provide commissionable price
23 Working with your RTO Benefits: Promotes the region and your product/event Works with NZ inbound wholesalers Act as conduit for media Acts as an advisor between national bodies Provides statistics and research information Provide information for tourism investors Explores event development opportunities Acts as educator and advocacy for industry
24 Introducing young TEC A networking young tourism organisation under 36 years, TECNZ members Regional group meetings + annual summit 8 week National Development Programme Work with tourism industry mentors Young TEC Excellence Award Link with tourism education providers
25 AUCKLAND 61 Dylan Rushbrook Lisa Harris Nicola Squire ROTORUA 8 Renata West Hariata Ngatai QUEENSTOWN 41 Anna Kerslake Hannah Murrell 163 WELLINGTON 40 Ania Truman Bryn Lloyd Lisa Ashford CHRISTCHURCH TOTS 13 Julia Panifilo Ryan Abrahamson Loren Heaphy
26
27 young TEC Statistics Member type Nov 2014 RTO s Inbound operator Tourism Services 12.9% RTO s 12% 25% 12.9% 17% 10% Accommodation 25% 25% Attractions/Activities Attractions & 25% Accommodation Activities Transport
28 Type of qualification Science 2% Other 20% Tourism 34% Arts 14% Diploma Tourism Travel & Hospitality 21% Business 32% 2014: Business 53% Tourism 19% Arts 14% Law 11% Science 3%
29 YTEC Survey Results Nov % response rate from members 93% have tertiary qualification 65% respondents said they spent less 5 hours studying tourism & travel distribution 76% said yes or maybe they take a tourism/travel distribution if offered as part of their course 15% can speak more than one language Only 16% chose tourism as a career at Secondary level, 37% at Tertiary, 49% while working part or full time Key comment: people at high school and tertiary, don t know job options re inbound tourism or what the difference is between travel (outbound) and inbound tourism
30 30
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