ABOUT HOSPITALITY NEW ZEALAND

Election Manifesto

ABOUT HOSPITALITY NEW ZEALAND Hospitality New Zealand (HNZ) is a member-led, not-forprofit organisation representing the largest membership group in our tourism industry. With approximately 3,000 businesses, ranging across luxury lodges, motels, hotels, holiday parks, backpackers, country hotels cafés, restaurants, bars, nightclubs, and off-licences, we represent the breadth and depth of the industry. Membership of Hospitality New Zealand is voluntary, is primarily funded by member subscriptions and comprises predominantly small businesses. Through our advocacy and close working relationship with our members we speak for and represent the interests of the hospitality industry as a whole. Service delivery to members is provided through a team of Regional Managers based throughout New Zealand and delivered through personal visits and telephone contact with members. Regional Managers are supported by a national service team in Wellington and led by Chief Executive, Vicki Lee. Any enquiries relating to this manifesto should be referred to Dylan Firth, Advocacy and Policy Manager at Dylan.firth@hospitalitynz.org.nz or 027 6888488. Hospitality: the word comes from two Greek words. The first means love and the second means strangers. So hospitality literally means love of strangers. Thanks for the hospitality New Zealand

Hospitality New Zealand Election Manifesto 2017 The Hospitality industry makes a significant contribution to the New Zealand economy and is regularly the much talked about and outward facing product of the tourism industry. The incoming government has the next 3 years to ensure positive growth for New Zealand s economy and for New Zealanders. On the back of international visitor growth and consumer confidence the hospitality sector has enjoyed a period of relative stability over the last 3 years however, the industry faces significant ongoing challenges. Hospitality New Zealand is committed to working with the incoming government to ensure these challenges are at least mitigated and, at best, overcome. With these challenges in mind, Hospitality New Zealand has developed its 2017 Election Manifesto aimed at providing an overview of these challenges, where we will need the incoming government s help and where we can help find a solution.

HOSPITALITY BY THE NUMBERS: 20,532 149,000 $4.76b 4.9m $15b 10,000 20,532 businesses employ 149,000 people in the hospitality sector (accommodation and food services) 1 The Accommodation and foods services sector contributed $4.76 billion to GDP (year ending March 2016). 2 Visitor arrivals to New Zealand are expected to grow 4.8 per cent a year, reaching 4.9 million visitors in 2023 from 3.5 million in 2016. 3 Total international visitor spend is expected to reach $15 billion in 2023, up 52 per cent from 2016. 3 By 2020 the hospitality sector will need almost 10,000 more workers. 4

VISITOR ACCOMMODATION Increases in visitor numbers means there is increased demand for accommodation. The commercial accommodation sector is attempting to meet these demands with new construction and improvement of existing assets. However, there is inequity in the regulations around different types of accommodation in New Zealand. As more people look to alternative accommodation during peak times or just as an alternative accommodation option, the tourism industry faces the potential negative impacts of a below average product offering to international visitors. Issue: nregulated providers such as Airbnb provide avenues for people to establish profitable accommodation businesses under the guise of house sharing. In many cases this peer to peer house sharing is treated as a business and derives significant income however, it operates in residential areas, pays residential rates and may not be captured appropriately for tax purposes. define commercial accommodation in a way that captures people who are benefiting from peer to peer house letting on a commercial level.

ensure appropriate health and safety and compliance requirements on peer to peer house letting is set at a national level, removing the need for local councils to come up with these rules. Issue: Online Travel Agents (OTAs) such as Booking.com and Expedia have a very strong market penetration in the commercial accommodation sector and most commercial accommodation providers must partner with them to maintain their market presence. Operators are required to maintain rates parity with the OTA s and many feel disadvantaged by this. An agreement reached between Booking.com, Expedia and the Commerce Commission in 2016, we believe, did not respond adequately to industry concerns on the rate parity issue. determine a way to fairly assess the international businesses who provide these services and facilitate these transactions, both the tax implications and the contractual requirements imposed on users of the service. ensure New Zealand accommodation businesses are treated fairly by international third party service providers.

TOURISM INFRASTRUCTURE FUNDING AND MANAGEMENT High visitor numbers and projected growth will continue to place pressure on tourism hotspots throughout New Zealand. The hospitality sector while enjoying the benefits of visitor growth, can also see were pressure points are emerging. Issue: A forecast of an extra 1.4 million visitors by 2023 will put strain on local communities with low rating bases and high visitor numbers who are attracted to these remote locations due to the local attractions available to them. If core infrastructure is not upgraded and high demand areas not provided with the infrastructure they need, there is risk this will undermine the high value tourism product New Zealand is known for. Some parts of New Zealand, due to tourism growth and popularity, are also becoming increasingly unaffordable for locals and workers to live there i.e. Queenstown ensure tourism infrastructure funding is delivered in such a way that relevant and necessary infrastructure is built and funding models are sustainable. encourage private investment in tourism infrastructure. We also call on the incoming government to ensure regulatory compliance costs do not make a project unviable or unduly onerous to complete. ensure the incoming government continues to make appropriate levels of financial investment in the sector, representative of the positive economic impact tourism and hospitality provide the country. ensure locals and workers can live in the regions where there is tourism demand through affordable and appropriate housing options.

SUSTAINABLE EMPLOYMENT AND MEETING SKILLS DEMANDS THROUGH IMMIGRATION Continued tourism growth is putting strong demand on the available workforce in New Zealand. Issue: There are currently not enough people to fill positions in the hospitality or tourism industry. With a further projected 1.4 million visitors over the next 6 years, the demand for accommodation and food service workers will only increase. Additionally, Tourism New Zealand s, marketing strategy to promote New Zealand in the shoulder season and into less traditional tourism destinations will further increase demand for a sustained annual work force and in locations that may have previously only enjoyed a seasonal tourism surge. Migrant workers are an important part of the hospitality and tourism workforce, 19.6% 6 of our member s employees hold work visas. Changes to immigration regulations can have, and in the past have had, a dramatic impact on the availability of staff for key positions. Attracting more New Zealanders into the industry is vital to its future sustainability. Success here will bring widespread economic benefits to local communities throughout the country. promote hospitality and tourism to New Zealanders as a fulfilling and viable career. continue to promote an already well entrenched iwi s first focus on employment in the hospitality sector. ensure Immigration settings are appropriately set so hospitality and tourism businesses can attract and attain migrant workers when New Zealanders are not available.

SUSTAINABLE GAMING AND TAB Hospitality New Zealand represents 400 TAB and 769 Class 4 Gaming Venues throughout the country. Issue: The continued sustainability of these venues are essential due to the significant contribution they make to community grants and funding. Every year Class 4 gaming returns approximately $300m to the community and around $150m directly to the Crown. Additionally, the TAB profits are distributed to the three New Zealand Racing Codes, New Zealand Thoroughbred Racing, Harness Racing New Zealand and Greyhound Racing New Zealand. In 2014/15, NZRB distributed $134.2 million to the three Codes and provided $6.1 million in commission payments to National Sporting Organisations. ensure the work undertaken by the Department of Internal Affairs (DIA) results in sustainable numbers of gaming machines, allowing for continued financial support to community groups. ensure the 35% decline in gaming machines since 2003 stabilises so as to maintain the $300m financial return to community organisations 6. ensure the continued support of the NZ racing industry through funding from venue returns, thus removing the need for direct government funding.

LOCAL AND CENTRAL GOVERNMENT DECISION MAKING Issue: Increasingly central government is passing decisions such as fees and policies down to local government who often do not have the experience, resource or technical understanding to make informed decisions. The variations in many of these decisions across multiple local councils creates confusion for visitors and inconsistency for businesses. Local government policies in areas such as Easter trading, Sale and Supply of Alcohol (LAPs) and Gaming often yield similar outcomes, yet processes are being replicated by different local authorities across the country. This could be avoided through centralised policy decisions. support centralised policy making in order to maintain consistency and reduce costs for local government and businesses.

TRAINING AND EDUCATION The hospitality sector is experiencing growth on the back of a stable economy and increased international and domestic tourism. To meet employee demand and to ensure the hospitality sector continues to provide the high-quality visitor experience we market to the world, there is a continued need for quality training and education. Issue: Traditionally, employment in the hospitality industry has largely been seen as a stop gap or an in-between industry. There are increasing concerns we will not be able to adequately staff the sector unless we change perceptions and promote hospitality and tourism as a viable and fulfilling career. shape vocational training ensuring the industry has the best access to trained staff via schools, polytechnics, private training providers or on the job training. promote the hospitality sector as a legitimate and long term career option for students in secondary and tertiary education. attract those returning to work or looking for a new career into the sector.

THOSE WHO BENEFIT FROM TOURISM SHOULD CONTRIBUTE Issue: Increasingly, the tourism and hospitality sector is being looked at by local councils as a source of funds, the premise being those who benefit from tourism should contribute to its upkeep. These often take the form of targeted rates on commercial businesses. Fundamentally, we agree that those who benefit should contribute however there must be fairness and equity in these funding mechanisms. ensure funding decisions at local and central government level are fair and equitable to those required to pay. halt the potential proliferation of targeted rates throughout the country to fund tourism. encourage a thorough investigation at a central government level regarding future tourism infrastructure and promotion funding.

References: 1 New Zealand Business Demography Statistics: At February 2016 - www.stats.govt.nz/browse_for_stats/businesses/business_ characteristics/businessdemographystatistics_hotpfeb16.aspx 2 Regional Gross Domestic Product: Year ended March 2016 - www. stats.govt.nz/browse_for_stats/economic_indicators/nationalaccounts/ RegionalGDP_HOTPYeMar16.aspx 3 MBIE NZ Tourism forecasts 2017-2023 4 MBIE Short term employment forecasts 2017-2020 5 Retail NZ Official information request to territorial authorities 6 DIA Class 4 Gambling report January 2017: https://www.dia.govt. nz/pubforms.nsf/url/dia-class-4-sector-report-2017.pdf/$file/dia- Class-4-Sector-Report-2017.pdf

Thanks for the hospitality New Zealand