International Market Performance

International Market Performance Visitor expenditure to end March Total +9% Holiday +18% Total average per visitor +1% Holiday average per visitor +8% Arrivals to end June Total +5.7% Total visitor stay days +11.3% Holiday arrivals to end June Total holiday +8.1% Total holiday visitor stay days +12.9%

Growth in arrivals is strong across the board Top six markets Visitor numbers (Y/E June 2014) Holiday arrivals Holiday stay days Total (000) % trend (YOY) % trend (YOY) % trend (YOY) Australia 1,236 +4.4 +5.9 +10.8 China 240 +8.0 +9.2 +27.5 USA 212 +11.7 +15.3 +13.1 UK 194 +2.8 +4.8 +6.9 Germany 76 +16.6 +21.6 +26.7 Japan 76 +0.7-3.3-7.5 Total (all) 2,787 +5.7 +8.1 +12.9 Whilst still behind last year, Japan was up +42.1% June 14 on prior June, reflecting the strong up-swing being seen in recent months.

Index (Base 100 = 2010) Electronic card expenditure levels trending positively and ahead of 2010, but NI is the strongest, and SI is lead by Queenstown 130 Index of Electronic Card Transactions All International Tourists 120 110 100 90 North Island South Island Total 80 70 60 2010 2011 2012 2013 2014 Source: MBIE Regional Tourism Indicators Transactions (not dollars). Excludes cash and Chinese cards

Cruise slight decline in last year but outlook positive

Number of Tourists Continued positive shifts towards quality in China There has been a 4.3% decrease in Chinese shopping tours, & a 63.3% increase in Chinese independent holiday tourists. Shopping Tours Independent Holiday 59,185 56,617-4.3% 13,672 +63.3% 22,326 Jan-May 13 Jan-May 14 Jan-May 13 Jan-May 14

Days in New Zealand Rising average length of stay - Holiday 8 7 6 Impact of China Travel Law on length of holidays 5 4 Source: TNZ Insights 2007 2008 2009 2010 2011 2012 2013 Since the China Travel Law was introduced, average length of holiday stay in New Zealand has increased by one day from 6.5 days to 7.5 days in YE May 2014.

Hobbit trilogy had profound impact in Western Markets

Industry peer recognition and it s effectiveness has been further recognised Best International Tourism Office 2014

FY14 Highlights

Significant year for media exposure 298 IMP files handled Large scale broadcasts Delivering $197m in media value Regions visited - 868 in total An additional $112m was delivered through the Royal visit, the hobbit book and travel classics

Record digital performance 20 editions, 9 languages 18.2 million visits last 12 months (+30%) 2.4 million referrals to industry (+15%) Growth of Mobile Traffic Essential New Zealand mobile app 90,000 downloads 60,000 referrals

Building our footprint in emerging markets New offices and people in Sao Paulo and Jakarta Up-weighted presence in India Building our trade relationships Trade training >1000 trade sitting modules TRENZ/famils >40 attended New trade shows attended Building New Zealand's image newzealand.com translated 100% Pure New Zealand campaign live in each market Strong IMP from each market 15 from Latin America 12 from Indonesia plus Farah Quinn 16 from India Working with airlines and travel trade to try to improve capacity

Strong momentum behind business events 12 person strong team in place Market by market approach determined CAP bids - 39 in FY Incentive bids supported -105 in FY MEETINGS - 43 international buyers (+300%) Campaign and online activity in place Toolbox of resources available MOU s signed - AuSAE (Aust), ITA (USA) and CINZ Infrastructure still limiting bidding opportunities

and in developing the premium sector Dedicated global team in place Hosted 40 premium travel trade on famils Attended 10 trade shows (+100%) 28 premium IMP files hosted Royals and Travel Classics provided a good boost New imagery, assets and campaign in market Working in partnership with NZ and offshore travel sellers

along with special interest Successful consumer digital and print campaigns in AU and USA Still and moving assets developed 4 cycle trail videos and autumn imagery to push shoulder season travel Updated newzealand.com hubs and content 2 golf trade shows attended (China and USA); AU consumer Bike and Lifestyle Show International golf strategy developed and GTNZ established Developing MOU with winegrowers

and Youth Youth arrivals up 8% y-o-y Highly successful Youth / Young Adventurer campaigns run in key markets Partnerships: STA (global MoU signed) STA famil New youth assets developed New Global Youth campaign developed (launching early FY15). Focused on core message of fantastic diverse proximity - the ability for Youth to Play On in NZ Campaign launch stunt and social activity with Red Bull

Holiday Arrivals (000s) MARKET ATTRACTIVENESS: Significant change in market context 2012 v 2013 600 500 Australia 400 Australia 2012 comparison. The size of bubble represents holiday stay days 300 200 China China USA USA 100 UK UK SEA Germany SEA Japan Japan Germany France Canada Korea Korea Canada - France -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% -100 Growth %

STRATEGIC PLAN: Increase value of international visitors to New Zealand by aligning with T2025 KEY TNZ STRATEGIES Grow a portfolio of markets & segments Drive preference to visit NZ Focus on higher value visitors Partner to extend reach Optimise delivery capability

Success of Hobbit has created a unique window to drive western markets ENVIRONMENT World economies are emerging from the GFC. The Hobbit has had a disproportionate effect on NZ performance. China market structure partially reset with law change to >quality market. Travel information shifting to mobile & to video at a faster rate. SWOT Strength Broad portfolio of growth markets, value growth occurring. Weakness air capacity pressure points increasing. Seasonality of demand. Threat Reliance on China still high. NZD strength. Opportunities Extend Hobbitled success beyond the final film. FY15 IMPLICATIONS Maximise impact of Hobbit3 & Middle Earth legacy. Western markets offer ability to accelerate value growth. Accelerate China higher value. Consolidate progress in new geographic areas - India, Indonesia, LATAM. Lift investment in new segments - IBE, premium, special interest. Leverage deeper partnerships to drive conversion programmes.

New Year Out-takes The substance of the plan remains unchanged, but More investment in USA, Germany and UK to make most of momentum in these high value markets. Continue to invest in emerging markets to broaden our geo-portfolio (India, Indonesia, LATAM). Continue to create new value in selected segments to drive disproportionate value: premium, business events, special interest. Leverage for up-coming events (Cricket, Football, etc.). But the biggest event for tourism is the final Hobbit movie

The final Hobbit instalment Significant global initiative Soon to be announced global initiative that will excite fans and media and cement New Zealand s position as home of Middle-earth. Broadcast & Media events Soon to be announced top US show to be broadcast from NZ Plus a major travel show to visit in Sept. Global Premiere and Pre-Screenings New Zealand will once again be brought to life at the global premiere and pre-screenings will engage offshore travel trade. Air New Zealand partnership Joint activity with the Airline to Middle-earth..

Shifting from Locations to Journey Middle-earth Inviting people to experience their own unique journey through Middle- Earth Introduction of image location into all work Journey and map to carry into development 100% Pure New Zealand campaign in 2015

Middle-earth affords opportunities for the whole industry Increased interest in New Zealand from media, trade and visitors Significant driver of visitation amongst longer staying western market visitors 14% says it influenced their decision But 1% said it was the primary reason Focus messaging on journeys throughout New Zealand Increased interest in newzealand.com

Major event leverage: ICC CWC 2015 ICC Cricket World Cup 3 rd largest sports event in world Broadcast over 200 Countries to estimated TV audience 2.2 billion NZ will be hosting 21 games over 7 Cities including the opening game in ChCh Key Activity: 3,500 visiting media Launch events in UK and India Working with OTA s on packages Trophy tour Utilising key cricket legends Sir Richard Hadlee, Stephen Flemming and others Developing destination content around game locations

Major event leverage FIFA under- 20 2015 Cumulative audience of 500m Focus on Latin America Media programme Other events Volvo Ocean Race ITU World Cup Triathlon NZ Open Golf WOW Queenstown Marathon Art Deco Festival Tarawera Ultra Marathon NRL 9 s FAWC Visa Wellington on a plate

South Island specific focus 2 distinct markets ZQN & rest of South Island Committed to supporting the region to rebuild its visitor economy Opportunity is to rebuild the touring market from Australia Working with CIAL and the SI RTO s on a South Island specific, multi year plan to regenerate interest in touring routes around the South Island (to/from ChCh) Campaign will be developed for 2015

Accessing the opportunity from new markets & segments Emerging markets Emerging market seminars (15-22 nd August) Understand the visitors: What they want and how they buy Product targeting the shoulder seasons newzealand.com versions Special interest Golf clusters and associated product Cycle trails and associated product Food n wine- integration Business events Pre and post touring Incentive product esp from Asia- making it incentive ready

... but we do need to tailor our offering to these new opportunities More travel trade and media fam trips are coming. And more of them are specialised groups business events, premium, special interest, & new markets all with different needs and different questions. We get it right alot, and generally we do a great job, but we re missing opportunities, particularly with specialist agents/media.

Are we keeping pace with consumer demand for sustainable tourism business practices? People choose New Zealand because of natural beauty and our environment. More visitors are looking for destinations and operators who operate sustainably and can demonstrate this with evidence. In NZ, there s a mixed industry response, including proprietary programmes, Qualmark Enviro, and ad hoc programmes. Are we doing enough collectively now to position ourselves competitively as a destination through the actions of our industry for the future? Initially this is a review of best practice and options. We expect to have a view on the way ahead by the end of the year.

Summary There s a lot going for us this year... Visitor numbers are up Visitor spend is up There s a broad range of growing regions and segments Outlook is pretty solid New events coming up to leverage There are new opportunities to embrace together!