Annual Report Tourism New Zealand | 2017/2018 Tourism New Zealand Annual Report | 2017/2018 Highlights
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Annual Report Tourism New Zealand | 2017/2018 Tourism New Zealand Annual Report | 2017/2018 Highlights
Highlights
%
of Kiwis agree or strongly agree . that international tourism is shoulder season holiday arrival growth good for New Zealand ‘Mood of the Nation’ survey, March . % BILLION
International visitor spend with an average of million active visits to newzealand.com million followers on Facebook spent per holiday arrival. .% increase in regional spend : Leading to . m return on investment . million in markets on value generated from international referrals to tourism businesses partnership campaigns media about New Zealand
% Pure New Zealand Specialists
. bids to bring conferences to With a further New Zealand supported MILLION through TNZ’s Conference Assistance Programme with , Arrivals into New Zealand registered in the an estimated value of % Pure agents attended . MILLION New Zealand % Pure New Zealand of which were holiday arrivals .m Specialist Programme Specialist Programme famil
2 3 Tourism New Zealand Annual Report | 2017/2018 Tourism New Zealand Annual Report | 2017/2018
Contents
2017/2018 at a glance...... 6 Chair and Chief Executive report...... 6-8 Performance overview...... 9
Who we are and what we do...... 10 Our offices...... 10-11 Our markets...... 10-11 The power of collaboration: Amway China 2018...... 15
The 2017/2018 year...... 16 FY18 activities: measures, targets and results...... 20-33 Regional spotlight: Northland...... 34-35 Awards...... 36-37
Meet the Team...... 40 The Board...... 40-41 Our Executive Team...... 42-43 Our Whānau...... 44-45 Governance...... 46 Equal Employment Opportunities...... 48-49
Financials...... 52 Financial statements...... 54-57 Statement of accounting policies...... 58-77 Five year financial summary for parent...... 78-79 Independent auditor’s report...... 80-81
4 5 Tourism New Zealand Annual Report | 2017/2018 2017/2018 at a glance
2017/2018 at a glance
Chair and Chief Executive report
engagement and destination management are now common topics of conversation. As a destination marketing organisation we have evolved our approach to play an increasing role in supporting sustainable growth in the sector. On behalf of Tourism This work has focussed on regional and seasonal dispersal. Encouraging visitors to travel in our shoulder seasons (September-November, New Zealand’s Board and March-May) has a flow-on effect of increased visitor investment, greater employment stability and more consistent income streams for Leadership team, we are New Zealand tourism operators, as well as taking pressure off hotspots in the peak season. Promoting less-visited regions ensures the pleased to present Tourism economic benefits from the visitor economy are felt across New Zealand, not just in main centres (gateways). New Zealand’s Annual Kerry Prendergast, Stephen England-Hall, Despite seasonal and regional dispersal being a Tourism New Zealand Chair Tourism New Zealand Chief Executive challenge felt by destination marketers globally, we set ambitious strategic targets for FY18 across Report for the financial regional dispersal, shoulder season versus peak travel, referrals, and high-value visitors. As a result, all marketing spend was invested year ending 30 June 2018. in promoting shoulder season travel and the theme of our FY18 100% Pure New Zealand Tourism has seen amazing growth over the last few campaign, ‘Where one journey leads to another’, encouraged visitors to include Kerry Prendergast, Tourism New Zealand Chair years, and our work has contributed significantly to regional travel into their itineraries and to travel during shoulder seasons. Stephen England-Hall, Tourism New Zealand’s Chief Executive this, with New Zealand continuing to be one of the During the year we saw an increase in spend in the regions compared to the gateways (+13.2% world’s preferred destinations. During FY18 Tourism versus +9.9% – a +3.4% differential) and for the year to June 2018 an estimated additional $471m New Zealand began work to position and refresh our had been contributed to our regions. While it brand to ensure we keep ahead of global tourism was encouraging to see gains in regional dispersal, we did not hit our target to grow trends and continue our success sustainably. shoulder season arrivals faster than peak arrivals. Driving shoulder season arrivals has been the focus of the Government and industry for many years and shifting consumer preferences continues to be challenging, particularly as high-value travellers tend to travel when a destination is perceived to be at its best. Total arrivals for FY18 As a nation, New Zealand welcomed 3.79m In FY18 we continued our successful approach visitors (+3.8% on FY17). This figure is expected of investing in a portfolio of markets and this to continue to grow steadily over the coming was reinforced with some of our priority one core years, reaching 5.1m visitors annually by 3.79 million markets showing impressive growth, offsetting 2024. We know some regions need support % significant reductions in other markets, notably: to accommodate this growth. Pressure on 3.8 Australia, which saw air connectivity changes, infrastructure remains the top concern for the UK, which returned to more realistic arrival New Zealanders regarding international figures after the boom of last year’s British & tourism, alongside accommodation shortages, Irish Lions Rugby Tour, and Japan, which saw a environmental damage, freedom camping, rise in domestic tourism. The variations in some Total regional spend traffic congestion and road safety. Tourism New Zealand has a pivotal role in seeking markets highlighted the importance of a balanced solutions to these challenges and during portfolio and for Tourism New Zealand to not $471 million FY18 we worked closely with a range of become overly dependent upon one source % agencies and industry to support this. market. We work across a range of established 13.2 and emerging markets to ensure fluctuations The visitor economy conversation is changing are managed well and new markets are grown – sustainability, social license, community and explored.
6 7 Tourism New Zealand Annual Report | 2017/2018 2017/2018 at a glance
Chair and Chief Executive report
Performance Overview
Of course, to be truly productive, inclusive and sustainable we must consider the visitor OUTCOMES FY18 It’s pleasing to see that our emerging economy as more than just arrival numbers and spend. To this end, Tourism New Zealand Visitor Spend markets have grown exponentially in recent has evolved our approach to look more closely 9% ($11.1b) at the ‘voice of the visitor’, monitoring visitors’ (Grow international visitor spend) years, in particular Argentina, Brazil, and experience and satisfaction, and those of the Philippines. Together with markets such New Zealanders. Again, this is something that the organisation will be increasingly focussed Socially inclusive growth on in FY19. 13.2% ($471m) as India, whose visitors tend to travel in (Grow regional spend) Future proofing the industry was a key our shoulder seasons have the potential to component of our work in FY18. We worked collaboratively with several organisations Productivity growth bolster arrival numbers and spend beyond and companies on initiatives to help ensure 5.6% ($1.4m) New Zealand is destination ready for tourism (Grow shoulder holiday arrivals) the seasonality profile. growth, that the growth is sustainable (economically, socially, and environmentally), and that our efforts improve experiences Social License (Mood of the Nation) for visitors and Kiwis alike. Tourism should 96% enrich New Zealand and it is vital that (Kiwis agree tourism is good for NZ) It’s pleasing to see that our emerging markets host. Business events also support our strategy New Zealanders value the role of tourism have grown exponentially in recent years, in to grow shoulder visitation with many of these in their local communities. particular Argentina (+45.9% on FY17), Brazil events being held in spring or autumn. In FY18 Visitor experience (VX) (+35.7% on FY17), and the Philippines (+34.4%). Tourism New Zealand supported 86 bids to host Our continued investment in Qualmark 94% Together with markets such as India, whose international conferences in New Zealand and New Zealand and the i-SITE visitor information (Exceeds expectation) visitors tend to travel in our shoulder seasons secured $124.9m worth of business. Our incentive network provides on-the-ground feedback have the potential to bolster arrival numbers from visitors and locals. We continue to share programme secured a further $46.8m worth of Australia: 64% Japan: 62% and spend beyond the seasonality profile. incentive business. This is a particularly lucrative this information to the industry and domestic Brand Preference China: 85% UK: 69% Another area of significant growth is the business market with the average value for programmes partners to support New Zealand to provide Germany: 70% USA: 59% and major events space. Our investment in won equalling $707k. The Amway China a world-class tourism experience. (% ACs who rate NZ in top two) this area proved very successful in FY18 with incentive event was a stellar example of FY18 has been a strong year for Tourism strong and steady growth across the Australian, Tourism New Zealand’s successful incentive bid New Zealand and for tourism in New Zealand, North American, and Chinese markets. The programme. Three years of preparation alongside and we continue to support the sector to IMPACT FY18 business events market is hugely competitive key New Zealand partners resulted in 8000 top ensure tourism enriches New Zealand now globally, but New Zealand has established itself sellers of Amway China arriving in New Zealand and into the future. EAV as a strong contender in the knowledge travel in the shoulder season and injecting around $287.7m economy and as an attractive business events $50m into the economy during their stay. Kerry Prendergast & Stephen England-Hall (Grow regional spend)
Referrals 8.8M (newzealand.com + Third party) There were Trade impact top sellers of Amway China 2% bids to host arrived into New Zealand (IATA share lift in Tier 1 & 2 accounts) international conferences in New Zealand Business Events $124.9m (+$46.4m) (Conference bids supported & incentive bids won) injecting close to Our incentive programme which secured Partnership ROI m secured 25:1 . . (exceeds expectation) million into the economy million Stakeholder survey worth of business worth of business 84% (% stakeholders rate TNZ’s performance - very good/excellent)
8 9 Tourism New Zealand Annual Report | 2017/2018 Who we are and what we do
Tourism New Zealand is the Crown entity Who we are and responsible for promoting New Zealand to the world. what we do Tourism New Zealand was established in 1991 as a Crown entity by the New Zealand Tourism Board Act, and since then our staff have worked tirelessly to create award winning campaigns marketing New Zealand as an international visitor destination. Our offices The heart of our promotions is the ‘100% Pure New Zealand’ campaign, first launched in 1999 and continually evolving to tell the story of the unique experiences available to people who visit London New Zealand. A key part of Tourism New Zealand’s successful strategy has been our enduring partnerships with global media partners, influential travel sellers Seoul and airlines, high profile celebrities and opinion Tokyo Los Angeles leaders and New Zealand tourism operators. We Shanghai provide relevant and up-to-date information for visitors, embracing social media and technology, Guangzhou and ensuring New Zealand’s tourism product and Mumbai experience is of the highest quality. In addition to attracting high value visitors, we also take a leadership role in the industry, Singapore providing insights and information about the visitor economy to operators and regional tourism organisations. Jakarta Auckland Tourism New Zealand also owns and operates the quality assurance organisation Qualmark New Zealand, and supports the Visitor Information Wellington Network Inc, overseeing more than 80 i-SITE visitor information centres around New Zealand. São Paulo Tourism New Zealand has 13 offices around the world, and we co-locate staff in a further three Sydney locations. In total we have around 160 full-time staff members. We take a portfolio management approach to promoting New Zealand on the world- stage, targeting 15 specific countries.
Our markets
Priority one core markets Priority emerging markets
AUSTRALIA CHINA UNITED STATES OF AMERICA FY18 HOLIDAY ARRIVALS FY18 HOLIDAY ARRIVALS FY18 HOLIDAY ARRIVALS INDIA INDONESIA ARGENTINA 579k (1.8%) 343k (15.9%) 225k (6.3%) FY18 HOLIDAY ARRIVALS FY18 HOLIDAY ARRIVALS FY18 HOLIDAY ARRIVALS 31K (19.2%) 19K (6.8%) 17K (45.9%) OVERALL SPEND OVERALL SPEND OVERALL SPEND $2.6b (4%) $1.7b (11%) $1.3b (11%) $2000 per person (3%) $4000 per person (1%) $4200 per person (7%) AC PREFERENCE SCORE AC PREFERENCE SCORE AC PREFERENCE SCORE BRAZIL PHILIPPINES 64% (1%) 84% (2%) 61% (3%) FY18 HOLIDAY ARRIVALS FY18 HOLIDAY ARRIVALS 11K (35.7%) 10K (34.4%) Priority two core markets
UNITED KINGDOM GERMANY JAPAN FY18 HOLIDAY ARRIVALS FY18 HOLIDAY ARRIVALS FY18 HOLIDAY ARRIVALS Priority three markets 105k (5.9%) 76k (2.6%) 68k (0.3%) OVERALL SPEND OVERALL SPEND OVERALL SPEND $1b (10%) $563m (9%) $253m (12%) SOUTH KOREA SINGAPORE CANADA MALAYSIA $4500 per person (3%) $5900 per person (11%) $2800 per person (11%) FY18 HOLIDAY FY18 HOLIDAY FY18 HOLIDAY FY18 HOLIDAY AC PREFERENCE SCORE AC PREFERENCE SCORE AC PREFERENCE SCORE ARRIVALS ARRIVALS ARRIVALS ARRIVALS 72% (4%) 69% (1%) 63% (3%) 68K (12.7%) 40K (1.6%) 39K (0.3%) 37K (9.3%)
10 11 You can only see the beauty of the land through the eyes of someone who loves the land
12 13 Tourism New Zealand Annual Report | 2017/2018 Who we are and what we do
Who we are and what we do
The power of collaboration: Overall satisfaction of Amway Leadership Seminar Amway China 2018
96%
Estimated value to New Zealand $50 million New Zealand now has more than 8000 programme puts New Zealand in an excellent advocates in China thanks to the manaakitanga position to host other large incentive trips in the shown by New Zealanders and the Queenstown future, especially outside the traditional peak community. summer season. In April 2018, Amway China brought 8000 Length of stay of its elite sales people to New Zealand for five “Having Amway China, a days as a reward for top sales. The trip was a coup for New Zealand and globally recognised brand, showcased the power of collaboration, with rate the Queenstown Tourism New Zealand joining forces with Destination Queenstown, Air New Zealand, and programme as one of the Immigration New Zealand to create an incentive best is a huge accolade 5 travel package with the difference. Amway China’s business owners rated the leadership that will no doubt further NIGHTS seminar programme as one of the best ever, raise New Zealand’s profile scoring an overall satisfaction rating of 96%. as a fantastic year-round Tourism New Zealand’s Chief Executive, Stephen England-Hall, says the success of the destination.” The people of Queenstown did an Advocates for New Zealand in China “ amazing job hosting the Amway group and the Kiwi hospitality and warm welcome they showed these visitors contributed significantly to them 8000 rating New Zealand so highly. ”
Stephen England-Hall, Tourism New Zealand’s Chief Executive
14 15 Tourism New Zealand Annual Report | 2017/2018 The 2017/2018 year
The 2017/2018 year
New Zealand’s visitor economy is healthy. New Zealand. Success is often influenced by variables Overall International arrivals In the year to June 2018 we welcomed 3.79m that are outside both Tourism New Zealand’s and the The past year has seen international visitors (+3.8% on FY17) and holiday wider tourism industry’s control. Arrival numbers arrivals grew 4.5% to 1.99m. While still well and visitor spend depends on a range of factors 3.79 million below peak visitation numbers, we are seeing including: Tourism New Zealand’s activities and those % some phenomenal increases in the number of visitors travelling in of competing destinations, the relative strength of the 3.8 the shoulder seasons – particularly in autumn and New Zealand brand, the impact of significant natural spring. Spend is up – over the $11b mark for the events both in New Zealand and in target markets, successes for Tourism past year. The regions are increasingly benefitting exchange rates and the general economic conditions Overall holiday arrivals from growing international visitor numbers. Over in countries of origin, airline scheduling decisions, the past 12 months, our regions have seen an seat capacity on air routes and ticket pricing, and New Zealand and additional $471m from the international economy major sporting or cultural events (exemplified by the 1.99 million – all signs that Tourism New Zealand’s strategy British & Irish Lions Rugby Tour boosting UK arrival to date to focus on regional and shoulder season % numbers & visitor spend in FY17). 4.5 the visitor economy. growth is making a difference. To ensure that international visitors deliver the Tourism remained New Zealand’s top earner for maximum possible value for New Zealand, Tourism foreign exchange in FY18 and as a nation we are New Zealand’s FY18 business activities followed Overall spend The sector presents tracking well to exceed the industry’s goal of $41b total revenue by 2025. Tourism New Zealand’s our successful approach of investing in a portfolio mission is to boost New Zealand’s economy by of markets. This approach balances near-term and $11.1 billion significant opportunities growing the value of international visitors. Our future opportunity and targeting high-value visitor four-year strategy (2017-2021) supports this segments and sectors in those markets through % ($3800 per person, our 100% Pure New Zealand campaign. 9 mission and sets out an overarching framework 2%) for New Zealand over for initiatives and activities focused on: the Over the past year we continued to build on sustainability of the sector, strategic management the momentum achieved in FY17 with seasonal Overall holiday spend of our portfolio of markets, and further integration dispersal (100% of our activity focused on the next five years. with government and industry partners to improve shoulder conversion), converting US airline the experience of visitors and host communities. and East Coast opportunities, and investing >$7 billion Collaboration with industry partners is critical to in the emerging markets of India, Indonesia, % ensure strong economic outcomes for and Brazil and Argentina. 8
Measure Target Performance Status Our overall objective Tourism New Zealand’s strategy and An increase in the value of visitors An increase on $11.1b Achieved activities support our overall mission: to New Zealand, contributing to 2016/17 figures. an increase in the tourism sector's Mission: To boost New Zealand’s • contribution to New Zealand's GDP economy by growing the value of international visitors Growth of international visitor An increase on -0.8% Not Achieved • Objective: An increase in the value of arrivals in the shoulder seasons 2016/17 figures. visitors, contributing to an increase Expressed as a differential between in GDP. shoulder and peak growth (Shoulder holiday arrival growth was +5.6%)
Growth of spend by international An increase on 3.3% Achieved visitors in regions 2016/17 figures. Expressed as a differential between regions and gateway growth on a year-on-year basis.
16 174 Tourism New Zealand Annual Report | 2017/2018 The 2017/2018 year
The 2017/2018 year
Strategic priorities and outcomes framework Statement of Performance: Tourism New Zealand’s activity Tourism New Zealand’s strategy is supported by outcomes and measures set out in the Statement of Intent (SOI) FY18-FY21. Tourism New Zealand’s activities in FY18 were funded through the Budget 2017/18 Estimates of Appropriations for Vote Tourism.
FY17 ACTUAL FY18 ACTUAL FY18 BUDGET $000’S $000’S $000’S MISSION: Boost New Zealand’s economy by growing the value of international visitors Crown Revenue $117,350 $117,350 $117,350 Other Revenue1 $6,263 $5,683 $3,073 STRATEGIC PRIORITIES: Total Revenue $123,613 $123,033 $120,423 1. Broaden our measure of value from near-term growth to long-term sustainability Total Expenses2 $122,595 $126,496 $120,423 2. Manage our portfolio of markets and sectors as a strategic investor 3. Work with Government and partners to sustain and improve the experience of visitors and host communities In FY18 our strategic priorities were to: These were achieved through various activities Activity four: Inform and inspire global travel sellers to assist them to market New Zealand. • Drive Australian and Chinese markets to grouped into six areas described in our Statement Working with the travel trade regional and seasonal dispersal. of Performance Expectations (as follows): • OUTCOME 1 OUTCOME 2 OUTCOME 3 • International business events, including • Launch 100% Pure New Zealand campaign Activity one: Deliver key visitor messages through Value Dispersal Experience conferences and incentives highlighting regional experiences. the 100% Pure New Zealand campaign activity. • Campaign Activity five: Deliver inspiring and informative Intermediate Outcomes: Intermediate Outcomes: Intermediate Outcomes: • Amplify Business Events and Special Interest to fill product capacity. Activity two: Deliver key visitor messages information for potential visitors Arrivals Seasonal dispersal Visitor Experience through third parties such as media, opinion • newzealand.com Stay days Regional dispersal Mood of the nation • Advance agile planning and delivery to respond leaders, and broadcast production. Spend Market portfolio Add value to industry to market conditions and target for impact. Activity six: Communicate and engage with • Public Relations (PR), International Media New Zealand’s tourism industry to align Maximise global partnerships to achieve • Programme (IMP), and Major Events industry investment with Tourism New Zealand integrated projects and digital leadership. Activity three: Partner with the travel industry areas of focus. ACTIVITY 1: ACTIVITY 2: ACTIVITY 3: ACTIVITY 4: ACTIVITY 5: ACTIVITY 6: Evolve digital platform enabling agile site • to convert interest in New Zealand into travel • Industry communication, engagement and Deliver key visitor Deliver key visitor Partner with the Inform and inspire Deliver inspiring Communicate and and content delivery. and to extend marketing reach. relationship building messages through messages through travel industry to global travel sellers to and informative engage with NZ’s • Develop visitor insights and 100% Pure • Joint Venture (JV) activity and partnership • Visitor insights the 100% Pure third parties such convert interest in assist them to market information for tourism industry New Zealand Experiences to shape activity with Regional Tourism Organisations New Zealand as media, opinion New Zealand into New Zealand potential visitors to align industry industry future. and aviation campaign activity leaders, and travel and to extend investment with TNZ’s broadcast production marketing reach areas of focus FY18 ACTUAL FY18 BUDGET APPROPRIATION ONE: MARKETING OF NEW ZEALAND AS A VISITOR DESTINATION $000’S $000’S SPE KPIs: SPE KPIs: SPE KPIs: SPE KPIs: SPE KPIs: SPE KPIs: CPE (cost per # of media visits Value of partner NZSP agents Total visits and # of industry Activity One: Deliver key visitor messages through the 100% Pure New Zealand campaign activity $47,367 $44,408 engagement) from contributions Active visits to engagements EAV from high impact Travel company Activity Two: Deliver key visitor messages through third parties such as media, opinion leaders and broadcast display newzealand.com $6,980 $8,536 influencer and Campaign return on advocates TNZ adds value to production CPA (cost per international media investment (min 5:1) Major trade events Referrals to industry industry stakeholders via newzealand.com Activity Three: Partner with travel industry to convert interest in New Zealand into travel and to extend acquisition) from programme (IMP) hosted or supported $23,344 $21,644 search marketing reach Content EAV Volume, value & win % more likely to visit NZ as a result of visiting rate of CAP conference Activity Four: Inform and inspire global travel sellers to assist them to market New Zealand $10,700 $10,657 and incentives bids newzealand.com Activity Five: Deliver inspiring and informative information for potential visitors $6,380 $6,050
Activity Six: Communicate and engage with New Zealand's tourism industry to align industry investment with $914 $836 Tourism New Zealand areas of focus
New Zealand and off-shore support costs3 $30,144 $28,265
Total $125,8304 $120,432
1 Other revenue includes bank interest and partner revenue. It excludes foreign exchange gains. 2 Total expenses include offsets from foreign exchange reserves to protect the funding lines from adverse movements in foreign exchange during the year with offshore expenditure. The total expense excludes other foreign exchange losses. 3 New Zealand and off-shore support costs support the delivery of all six activities. 4 Additional revenue received has enabled Tourism New Zealand to increase the level of expenditure on marketing New Zealand as a visitor destination.
18 19 Tourism New Zealand Annual Report | 2017/2018 The 2017/2018 year
FY18 activities: measures, targets and results
COST PER ENGAGEMENT5 FROM DISPLAY – ALL MARKETS We love working with Target: $0.50-$1.50 “ Activity one: Deliver key visitor messages through the Performance: $0.06 Tourism New Zealand and 100% Pure New Zealand campaign activity. Status: Achieved In FY18 we focused on further improving the During the year we ran several significant appreciate the work they do effectiveness of targeting, quality and delivery in-market campaigns across Australia, China, of the new FY18 campaign message ‘where one North America, UK, and Germany, designed to to help us promote this region journey leads to another’. move travellers down the path from dreaming ” of a New Zealand holiday to booking the trip. COST PER ACQUISITION6 Link with Tourism New Zealand strategic For China, these campaigns capitalised on the FROM SEARCH: priorities increasing trend towards self-drive holidays by Gizelle Regan, Lake Wanaka Tourism Our campaign and market insights activity is a this market. Immigration New Zealand figures for Australia key vehicle for delivering the brand message in the year to June 2018 showed a 26.4% increase Target: $2.50-$3.00 our off-shore markets and delivers against all in the granting of General Visitor visas against Performance: $1.56 our three overarching strategic priorities, and a 2.1% increase in the granting of the, generally the following FY18 strategic priorities: lower value, Approved Destination Status visas. Status: Achieved This shift in the mix of visitors from China is seen • Broaden our measure of value from near- China term growth to long-term sustainability. as a positive change in light of the wider tourism strategy to grow value ahead of volume. • Manage our portfolio of markets and Target: $1.50-$2.00 sectors as a strategic investor. Our China Market Development Unit works Performance: $0.78 closely with the Chinese market – both in- Work with government and partners to Status: Achieved • market and within New Zealand – providing sustain and improve the experience of information that is designed to increase visitors and host communities. China visitor knowledge, including the USA • Drive Australia and China for regional and rights and protections they have if visiting Target: $3.00-$3.50 seasonal dispersal. on an Approved Destination Status tour. Performance: $3.06 • Launch 100% Pure New Zealand campaign All campaigns encouraged shoulder season Status: Achieved highlighting regional experiences. travel through our regions. In the latter half of FY18 we introduced new video content How did we do? illustrating the ease of getting around the UK As our largest market Australia offers the country and showing the range of experiences Target: $2.00-$2.50 benefit of scale, some of our most successful on offer in the regions. The content featured Performance: $1.17 initiatives in FY18 involved this market. We Rotorua, Whakatane, Coromandel, Kaikoura, ran regional road-trip campaigns strategically Marlborough, Dunedin and Invercargill and Status: Achieved throughout FY18, aimed at the Australian showcased New Zealanders interacting with market that offered self-drive itineraries visitors reflecting our warm Kiwi welcome. Germany through our regions. These campaigns were Initial results illustrate that the inclusion Target: $2.00-$2.50 produced in collaboration with various of New Zealand’s unique people and culture regional tourism organisations and operators has further lifted the effectiveness of our Performance: $0.96 and promoted package deals only available work with potential visitors. Status: Achieved in shoulder season periods. Encouragingly, Monthly Regional Tourism Estimates sourced Japan from card spend, showed that for the year “Thank you for including the ending December 2017, regional spend was beautiful Bay of Plenty in Target: $3.50-$4.00 up 13.2%, growing at a faster rate than Performance: $1.82 gateway spend (+9.9%)7. Furthermore, arrival so many opportunities. We figures in March 2018 showed regional visitor Status: Achieved levels exceeded gateway visitor levels with love working with the team Australian visitors leading the increases; at Tourism New Zealand!” exemplifying marketing can shift consumer travel behaviour. Kristin Dunne, Tourism Bay of Plenty AWARENESS OF 100% PURE NEW ZEALAND LOGO AS MEASURED BY IVS Click to view the road trip videos Target: At least 65% Performance: 66% 5 Engagement: when an action is taken on an ad, i.e. a click, a play of a video, some form of interaction Status: Achieved 6 Acquisition: refers to someone who has been drawn to newzealand.com as a result of seeing and acting on advertising/search initiatives delivered by Tourism New Zealand. 7 Please note: It is not possible to use the International Visitor Survey to assess regional spend but the IVS is used to report on total and holiday visitor spend.
20 21 Tourism New Zealand Annual Report | 2017/2018 The 2017/2018 year
FY18 activities: measures, targets and results The #GetNZontheMap “campaign exceeded our expectations and showed us that we can turn a quirky Activity two: Deliver key visitor messages through third parties INTERNATIONAL MEDIA HOSTED idea into a viral video such as media, opinion leaders, and broadcast production. – ALL MARKETS ” We have continued our successful approach Travel’s six-part video series and online content Target: 195 media visits of using influencers, international media, key hub. Within 24 hours of ‘The Ultimate New Zealand Performance: 172 media visits opinion leaders, and major events to promote Experience’ launch, an Associated Press story Stephen England-Hall, Status: Not achieved Destination New Zealand to the world and had been syndicated in over 300 titles globally Tourism New Zealand’s Chief Executive convert potential visitors into actual visitors. (equivalent to $5.5m advertising value and reaching The focus in FY18 was the International Media over 575m unique viewers), while the videos on Programme (IMP), content development and Tourism New Zealand and National Geographic’s syndication, and maximising new and existing sites had been viewed more than 400k times and opportunities for major events and film tourism. EQUIVALENT ADVERTISING prompted an additional 1700 followers on our VALUE (EAV) OF PRINT, ONLINE @purenewzealand Instagram account. Link with Tourism New Zealand strategic priorities AND BROADCAST IN ALL TNZ The influencer programme continued in our MARKETS8 Tourism New Zealand’s PR activity is primarily markets with Indonesian celebrity and contracted aimed at achieving driving preference for tourism advocate Nadine Chandrawinata New Zealand and integrating messages EAV from IMP and sharing her experience with media, trade, NZ Inc high impact projects across multiple platforms that: contacts, and her 1.1m social media followers. • Advance agile planning and delivery to respond Tourism ambassador and Bollywood star Target: $120m to market conditions and target for impact. Sidharth Malhotra also shared his New Zealand Performance: $172m • Maximise global partnerships to achieve experiences with media in India, and in July, integrated projects and digital leadership 37m Brazilians tuned into an hour-long episode Status: Achieved • Manage our portfolio of markets and sectors of ‘Camera Record’ focused on New Zealand’s as a strategic investor regions (EAV $13m). Chinese superstar Nicholas Content EAV • Work with government and partners to Tse’s Chef Nic New Zealand (showcasing the Target: $80m sustain and improve the experience of Hawke’s Bay and Taupō) reached an audience of visitors and host communities. more than 47m through television, 81m people on Performance: $115.7m social media, and generated $45m in EAV; while Status: Achieved How did we do? social media coverage of lifestyle influencers Sean An agile approach to PR activity saw Tourism and Poppy’s tour of New Zealand generated more Total EAV New Zealand score major wins on the than $1.05m EAV and raised New Zealand’s profile international stage in FY18 with more than 10k as a destination among the backpacker and Target: $200m stories globally featuring New Zealand and almost young independent traveller market in the UK. Performance: $287.7m $290m in estimated advertising value (EAV). The The unexpected hit of FY18 was undoubtedly the Status: Achieved team worked with a range of international media #GetNZontheMap campaign, which involved outlets and influencers to showcase the country Prime Minister Jacinda Adern and comedian Rhys as the destination of choice. Darby. After 10m video views on social media and The year kicked off with the long-awaited North significant global media coverage the EAV of the American influencer campaign featuring actress campaign came in at over $10m, delivering a return Bryce Dallas Howard and National Geographic on marketing investment of more than 600%.
Profile: #GetNZOnTheMap A chance encounter in a San Francisco had a following of more than 40k. Starbucks led to one of Tourism New Zealand’s A campaign was developed to rectify the issue, most successful media campaigns. involving a light-hearted video featuring Prime Tourism New Zealand’s Chief Executive, Stephen Minister Jacinda Ardern and comedian Rhys England-Hall, was getting a coffee in Starbucks Darby to encourage the addition of New Zealand when he noticed that New Zealand wasn’t to all world maps. Within days the video had included on the world map on its wall. He sent gone viral on social media and featured in a jovial call out to the team in New Zealand to hundreds of media articles. investigate, and it emerged that there was a growing collection of maps throughout the world “This campaign showed how we can use our that had one obvious omission – New Zealand. marketing budget wisely to achieve impressive From maps in online photo libraries, to coffee returns on investments. The #GetNZontheMap shops, famous attractions and board games, campaign exceeded our expectations and New Zealand was often nowhere to be seen. showed us that we can turn a quirky idea A Reddit ‘Maps Without NZ’ discussion board into a viral video,” says Mr England-Hall.
Click to view the #GetNZOnTheMap video
8 EAV results are not always available for all activity, so results will underestimate the actual value. 22 23 Tourism New Zealand Annual Report | 2017/2018 The 2017/2018 year
FY18 activities: measures, targets and results
Activity three: Partner with the travel industry to convert interest VALUE OF PARTNERSHIP in New Zealand into travel and to extend marketing reach. CONTRIBUTIONS9 Target: $22m Tourism New Zealand partners with travel trade, of visitors. In recent years, four of these centres Performance: $23m Regional Tourism Organisations (RTOs), and in Auckland, Christchurch, Dunedin and Ruapehu aviation partners in joint ventures that enable us have co-located to present a single customer Status: Achieved to combine marketing messages with a product experience for visitors. that potential visitors can buy. This approach The China market provided several joint venture accelerates conversion and increases the pool opportunities. Our annual China Market Update of funding. In FY18 we ran several high-impact was well attended by more than 80 industry JV campaigns that included TV and digital CAMPAIGN RETURN ON delegates; we extended our strategic partnership 10 production, trade and aviation programmes. with leading Chinese travel service provider, INVESTMENT (ROI) – Ctrip, to simplify joint activities by integrating ALL MARKETS Link with Tourism New Zealand strategic plans and budgets into a single body of work; Target: 5:1 priorities and we partnered with Chinese rental car trade Performance: 25:1 Tourism New Zealand’s joint venture and partner Zuzuche to better understand if our driver aviation activity is primarily aimed at achieving education toolkit and content is helping to make Status: Achieved partnerships to activate conversion and extend the experience of driving in New Zealand better for marketing reach and encompasses the following Chinese visitors. The findings were shared with the FY18 strategic priorities: cross-agency Visiting Drivers governance group. • Advance agile planning and delivery to respond During FY18 Tourism New Zealand re-committed to market conditions and target for impact. to its six-year partnership with Air New Zealand • Maximise global partnerships to achieve to promote New Zealand offshore, with an MOU integrated projects and digital leadership. outlining investment of up to $10m each for joint activity in Australia, China, North and South • Manage our portfolio of markets and sectors America, Japan, Singapore, the United Kingdom as a strategic investor. and Europe. Prime Minister Jacinda Ardern was • Work with government and partners to sustain on hand to witness Tourism New Zealand sign and improve the experience of visitors and host a three-year MOU with Philippine Airlines in communities. November for joint activity that supports a direct route between Manila and Auckland. Our bid for How did we do? consistency of routes serviced continued and we worked alongside companies to discuss future Tourism New Zealand solidified its relationship opportunities, in particular, American Airlines, with several Regional Tourism Organisations which turned its Los Angeles-Auckland route to a during FY18 and ran a number of sole campaigns seasonal service at the start of FY18 (off the back and joint TNZ-RTO promotions. Regions of weak performance over the New Zealand winter highlighted included Northland (market focus: and difficult sales). Tourism New Zealand maintains Australia), Bay of Plenty (Korea), Rotorua joint venture partnerships with American Airlines, (Australia, Korea), Taupō (Australia), Ruapehu United Airlines, Air New Zealand, Emirates, a (Australia), Wellington (Australia, China), co-marketing agreement with Holiday Tours Marlborough (Australia, China), Canterbury Malaysia, and other memoranda of understanding (Australia, China), the West Coast of the South with International Marketing Alliance, and off- Island (Australia), and Southern Lakes (Australia). shore training organisations. During FY18 we We continued to take an active role in New Zealand also extended the Tourism Industry Partnership Trade and Enterprise’s Tourism Attractions Project, Programme with Immigration New Zealand and which aims to help accelerate investment into six travel agents in India. This programme makes it tourism attractions and to support regions to easier for Indian nationals to come to New Zealand develop robust destination management plans for international business events and capitalise on including Auckland Tourism, Events & Economic the substantial growth in conference facilities in Development (ATEED)’s Destination AKL 2025 plan. Auckland, Christchurch and Queenstown. We also partnered with Māori Tourism to conduct 9 The $23.0m of partnership contributions includes $3.9m of Rounding off FY18 Tourism New Zealand had a non-financial contributions from partners. These are non-cash a workshop investigating and defining areas of significant presence at TRENZ 2018 in Dunedin, contributions made by partners to joint activity with Tourism work that will inform future campaign work. New Zealand such as discounted airfares, accommodation and where our teams met with a range of industry activity admission fees for a trade or media familiarisation and We continued our partnership with the inclusion of Tourism New Zealand content in partner’s e-mail and we launched our infographic resource newsletters or websites. The equivalent dollar value of these Department of Conservation (DOC), providing ‘Understanding our Visitors’, providing industry contributions is estimated by Tourism New Zealand and RTO staff based on market knowledge, external sources such as insights and content for the launch of its network with insights into Australia, China, USA, UK, websites, published pricelists and communications with the of 19 short walks and day hikes. Strategic Germany and Japan. We also attended MEETINGS, partners themselves. discussions also began between i-SITE NZ (a New Zealand’s only national trade show for the 10 ROI is calculated by: (passengers booked) x (average visitor spend for market) / campaign spend. This generates a ratio that subsidiary of Tourism New Zealand) and DOC to business events sector, where we launched the shows for every dollar we spent we generated ‘x’ amount of value. Note: ROI relates to campaign spend only and is not intended to work together more consistently for the benefit ‘Naturally beyond convention’ campaign. represent a ROI for overall Tourism New Zealand activity.
24 25 Tourism New Zealand Annual Report | 2017/2018 The 2017/2018 year
FY18 activities: measures, targets and results
Activity four: Inform and inspire global travel sellers to assist SUCCESSFUL TRAVEL MODULE them to market New Zealand. COMPLETIONS11 – ALL MARKETS Target: 2500 Tourism New Zealand’s work with global How did we do? travel sellers is two-fold with our Trade team Education formed a major part of the Trade Performance: 55,724 liaising with travel agents in-market, providing team’s activity in FY18 across all markets with Status: Achieved education, running famil, and joint venture the number of travel agents completing the campaigns; and our Business Events team 100% Pure New Zealand Specialist Programme liaising with conference and events managers, booming. Other work in the education space and the luxury/premium market. included online videos, in-market presentations TRADE ON TNZ HOSTED FAMILS – on the 100% Pure New Zealand campaigns in ALL MARKETS Working with the travel trade the UK, USA, and South America; networking Target: 650 In FY18 our Trade team focused on increasing opportunities involving 500 travel agents the impact of activity and coverage targeting from Brazil, Argentina, and Chile at Tourism Performance: 747 highest-value Tier 1 accounts, extending the New Zealand’s Kiwi Link; a live-stream show Status: Achieved reach of the 100% Pure New Zealand Specialist organised by China South Airlines for Alibaba’s Programme (NZSP), and investing further Double 11 Shopping Festival (in which all in analytics and sales capability to drive New Zealand products sold out in the first partnership ROI and conversion. two hours); and a roadshow in the US entitled TRADE FAMILS THAT FEATURE A ‘Treasures of New Zealand’ that coincided with CULTURAL ELEMENT Link with Tourism New Zealand strategic the Washington DC Tuku Iho exhibition. The Target: At least 75% team also hosted several famil in New Zealand priorities Performance: 67% Tourism New Zealand’s activity in working with including 30 members of Tourism New Zealand’s the travel trade area supported the following top three Indian travel trade accounts, American Status: Not achieved FY18 and overarching strategic priorities: Airlines and trade partner Travel2, and a tour of 98 Australian travel agents exploring 22 regional • Amplify Business Events and Special locations. These agents became travel company Interest to fill product capacity. advocates for New Zealand upon their return to MAJOR TRADE EVENTS • Advance agile planning and delivery to their countries of origin. ATTENDED BY TNZ respond to market conditions and target Tourism New Zealand held several industry Target: Minimum of 30 for impact. training events, webinars and workshops Performance: 36 • Broaden our measure of value from near- (including our annual Regional Tourism term growth to long-term sustainability. Organisation Workshop in Australia), and Status: Achieved • Work with government and partners to attended several trade fairs including the sustain and improve the experience of Asia-Pacific Incentives & Meetings Expo visitors and host communities. (AIME – the largest business events tradeshow in the Southern Hemisphere), ITB in Berlin MAJOR TRADE EVENTS (the world’s largest travel trade fair), Unite ORGANISED & FACILITATED BY TNZ Pacific in London, and Seatrade Cruise Global Target: Minimum of 10 in Miami (the world’s largest cruise trade Performance: 18 show). At each of these events Tourism New Zealand staff met with hundreds of influential Status: Achieved travel advisors and buyers who, each in turn, went on to share the ‘New Zealand story’ among their networks. NUMBER OF TRAVEL COMPANY ADVOCATES12 Target: 185 Performance: 172 Status: Not achieved
MAINTAIN THE NUMBER OF TRAVEL AGENTS WHO ARE CERTIFIED AS ‘100% PURE NEW ZEALAND SPECIALISTS’ – ALL MARKETS Target: 1,500 11 The online training platform for travel training on the 100% Pure New Zealand Specialist Programme. 12 Two types of ‘Advocates’ exist; Travel Agent Advocates and Travel Company Advocates. To qualify as a Travel Agent Advocate they must Performance: 7192 have successfully completed the 100% Pure New Zealand Specialist Programme. To qualify as a Travel Company Advocate the company must have a formal partnership agreement and a regular contact plan must be place and fulfil a set of criteria such as key staff on Status: Achieved familiarisation, attendance at TRENZ or have a certain amount of 100% Pure New Zealand Specialists in the company.
26 27 Tourism New Zealand Annual Report | 2017/2018 The 2017/2018 year
FY18 activities: The kōrero and kai table is a powerful measures, targets and results “symbol of how New Zealand welcomes strangers and makes them feel at home. It also acts as an invitation to the world to come and experience New Zealand’s beauty International Business Events, including How did we do? BIDS SUPPORTED THROUGH Conferences and Incentives and Premium Tourism New Zealand achieved all its business THE CONFERENCE ASSISTANCE and our warm hospitality for themselves. New Zealand continues to be an attractive targets securing 44 high-profile conferences PROGRAMME (CAP) FUND ” location for business events. Business events across the medical, commercial, security, Target: 85 administrative, legal, education, sport and visitors typically spend more than holiday Performance: 86 visitors, travel to New Zealand in shoulder leisure, and science sectors. The team also Lisa Gardiner, Tourism New Zealand’s seasons and explore multiple regions. secured $46.4m worth of incentive events, which Status: Achieved Manager of Business Events The focus for FY18 included securing business tend to bring high value delegates to the country. The most popular incentive locations requested and generating forward demand for new were Auckland, Queenstown, and Rotorua, with conference centres, and attracting larger delegates expected to stay 6.5 days on average conferences that offer higher-value. and each programme worth on average $707k. INCENTIVE BIDS SUPPORTED13 In addition to securing business events, Tourism Link with Tourism New Zealand strategic Target: 150 priorities New Zealand continued to partner with Luxury Lodges of New Zealand to promote New Zealand Performance: 162 Tourism New Zealand’s activity in international as a premium destination among ultra-high Status: Achieved business events and the premium market and high net-worth individuals. We hosted 13 supported the following FY18 and overarching international luxury travel agents on famil around strategic priorities: the North and South Islands, held a series of • Amplify Business Events and Special Interest high-end agent training events across the UK and Europe attracting more than 90 luxury travel to fill product capacity. VALUE OF INCENTIVE BIDS designers, and attended PURE Marrakesh, one of CONVERTED • Advance agile planning and delivery to respond the world’s headline luxury trade shows. During Target: $27m to market conditions and target for impact. FY18 we released the Premium Insights Report, Performance: $46.4m • Broaden our measure of value from near- highlighting results achieved (for the year to term growth to long-term sustainability. March 2017). This provided valuable insights for Status: Achieved industry attracting the high end of the market • Work with government and partners to and showed that a third of premium travellers sustain and improve the experience of are making return visits to New Zealand and visitors and host communities. spending on Luxury Lodge New Zealand premium accommodation increased 44% SUCCESS RATE FOR BIDS (for the year ended September 2017). SUPPORTED THROUGH CAP FUND Target: 60% Performance: 71% Kōrero and Kai Status: Achieved Tourism New Zealand debuted a world-first In Frankfurt the two pieces came together hospitality experience at IMEX Frankfurt separated only by a high definition screen. during FY18 – Kōrero and Kai. At one end the convention planners enjoyed Convention planners enjoyed a kōrero New Zealand produce at IMEX and at the other ESTIMATED VALUE OF BIDS (conversation) and kai (food) at a dining table end Kiwis dined at Rotowhio marae in Rotorua SUPPORTED THROUGH CAP FUND intricately designed and carved from ancient and Harbourside in Auckland, giving the illusion reclaimed swamp kauri by the New Zealand everyone was seated at the same table. Target: $124m Māori Arts and Crafts Institute (NZMACI) to “The kōrero and kai table is a powerful symbol Performance: $124.9m reflect Māori hospitality traditions that have of how New Zealand welcomes strangers and Status: Achieved shaped contemporary New Zealand culture. makes them feel at home. It also acts as an Carved by former NZMACI head of school invitation to the world to come and experience and Master Carver, Albert Te Pou, the table New Zealand’s beauty and our warm hospitality incorporates two main designs – kōwhaiwhai and taratara ā kai (or kae). The table has been for themselves,” says Lisa Gardiner, Tourism made in two pieces. One part will remain in New Zealand’s Manager of Business Events. New Zealand and the other will travel around Tourism New Zealand has extended the Korero the world. and Kai concept in FY19 at major trade shows.
13 Tourism New Zealand only tracks incentive bids for 50 people or higher, or with an estimated value of more than $200k NZD (excl. airfare). value.
28 29 Tourism New Zealand Annual Report | 2017/2018 The 2017/2018 year
FY18 activities: measures, targets and results
Activity five: Deliver inspiring and informative information NUMBER OF TOTAL VISITS TO for potential visitors. NEWZEALAND.COM Target: 46.4m Tourism New Zealand’s consumer website, How did we do? newzealand.com, continues to evolve As in previous years, all Tourism New Zealand’s Performance: 51.1m with regular updates to both content and major campaigns in FY18 led potential visitors Status: Achieved functionality to convert people dreaming about to newzealand.com and/or partner websites, New Zealand into planning; and provides current leading to increases in the number of active visits information about travel sellers and products to Tourism New Zealand’s consumer site overall. to book. Our focus for FY18 was to continue to We saw a dramatic increase in the number of grow total visits, active visits and conversion to referrals to industry resulting from partnerships NUMBER OF ‘ACTIVE VISITS’14 referrals to the travel industry from both paid and targeted campaign approaches. TO NEWZEALAND.COM marketing campaigns, and ‘organic’ search and In the social media space, Tourism New Zealand social media; and to begin the process to update Target: 21.8m took a concerted approach to establish a forum the website’s content management system. for interaction between New Zealanders and Performance: 22.5m Link with Tourism New Zealand strategic international visitors. The hashtag #KiaOraNZ Status: Achieved priorities was introduced across Tourism New Zealand’s social channels in October as part of a visitor Tourism New Zealand’s newzealand.com experience social media campaign aimed at activity is primarily aimed at driving preference encouraging travellers and New Zealanders to for New Zealand, optimising delivery capability share stories of the positive experiences tourism NUMBER OF REFERRALS15 TO and the supporting the following FY18 and brings all people. The results were positive INDUSTRY VIA NEWZEALAND. overarching strategic priorities: with videos viewed 2.4m times globally, 1.5m COM OR VIA DIRECT THIRD- • Advance agile planning and delivery to respond New Zealanders reached, and more than 43k PARTY REFERRALS (TPRS) to market conditions and target for impact. interactions from New Zealanders. A second Target: 5.5m • Maximise global partnerships to achieve phase of the campaign ran in late FY18. Performance: 8.8m integrated projects and digital leadership. Behind the scenes, Tourism New Zealand • Evolve digital platform enabling agile site contracted New Zealand-based Silverstripe Ltd Status: Achieved and content delivery. to replace the content management system • Broaden our measure of value from of newzealand.com. This is part of wider near-term growth to long-term sustainability re-platform project that will continue into • Manage our portfolio of markets and sectors FY20 and will ultimately improve and future- as a strategic investor proof newzealand.com’s functionality, speed, PERCENTAGE OF PEOPLE • Work with government and partners to scalability, usability, and development. The WHO ARE MORE LIKELY TO sustain and improve the experience of look and feel of the website will not change. VISIT NEW ZEALAND AS A visitors and host communities. RESULT OF THEIR VISIT TO NEWZEALAND.COM Target: 75% Profile: Kia Ora Performance: 77% Kia Ora: Hē iti te kupu. Status: Achieved “ In October 2017, Tourism New Zealand launched The campaign was well received and prompted Hē nui te korero. Although a social media campaign on Facebook and a second phase of activity with social media Instagram designed to highlight the positive community use of the #KiaOraNZ hashtag to the word is only small, tourism experience in New Zealand. The generate other positive tourism stories: #KiaOraNZ campaign tells real-life stories of “When I first arrived in NZ for the first time the meaning is great. the connections made between visitors and ‘Kia Ora’ was written on a welcome card for Kiwis. The #KiaOraNZ campaign complemented ” me...I can honestly say I’ve never felt more our Tourism Today information hub, which welcome in any land than I have there, even highlights the value of international tourism in my own home country and state. We can Arekatera Maihi, Ngāti Whanua Orākei for New Zealand. learn so much from other cultures.” – in ‘100% Pure New Zealand presents Kia Ora’. Former Director of Marketing, Andrew Fraser 100% Pure New Zealand Facebook follower. says the first phase of the campaign uses video content and images to set the scene for the “Coming to NZ was the best decision, we hashtag #KiaOraNZ, which is about stories of were greeted with warm Kia Ora the whole way. Kiwis are such a friendly bunch. Never New Zealand people and culture. want to leave.” 100% Pure New Zealand Facebook follower. 14 Active visits: a visit where the visitor interacts with the site’s content or functionality. 15 Referrals: The number of people, who, once drawn to Click to view the Kia Ora video newzealand.com from paid search or display digital activity, are then delivered to an operator or partner site where travel/experiences can be purchased.
30 31 Tourism New Zealand Annual Report | 2017/2018 The 2017/2018 year
FY18 activities: It’s so inherently part of who we are, it’s measures, targets and results reflected“ in our name – Manaakitanga Aotearoa. Personal recommendation is the number one reason visitors choose a destination, so it’s Activity six: Communicate and engage with New Zealand’s STAKEHOLDER ENGAGEMENT incredibly encouraging to see the majority of tourism industry to align industry investment with Tourism THROUGH PRESENTATIONS AT BOTH INDUSTRY AND TOURISM Kiwis embracing manaakitanga and helping to New Zealand areas of focus. NEW ZEALAND ORGANISED Tourism New Zealand places considerable from that growth. To this end, ‘voice of the visitor’ EVENTS create a positive experience for our visitors. importance on its relationship with tourism insights permeated all work conducted and Target: Minimum of 40 ” operators. We regularly engage with industry, targets achieved in FY18, marking the evolution Performance: 40 informing them of our activity, learning about of our work from solely destination marketing theirs, and gathering feedback to ensure to destination readiness and management. Status: Achieved Stephen England-Hall, Tourism New Zealand’s Chief Executive alignment between programmes of work. In Our Executive Team and other team members FY18 we focused on delivering ‘voice of the represented Tourism New Zealand on several visitor’ insights in support of strategic priority industry boards and working groups, including three (to work with government and partners destination management work, visitor driving, to sustain and improve the experience of visitors responsible camping, and conservation initiatives. TOURISM NEW ZEALAND and host communities), as well as ongoing Throughout November, Tourism New Zealand’s COMMUNICATIONS (WEBSITE/ partnership work to sustain and enhance the Chief Executive and leadership team hosted E-NEWSLETTER/ WEBINARS visitor experience in targeted areas. industry road shows in Auckland, Rotorua, ETC.) ADD VALUE TO TOURISM Wellington, Christchurch and Queenstown, INDUSTRY STAKEHOLDERS’ Link with Tourism New Zealand strategic engaging with regional tourism operators and ACTIVITIES priorities tourism representatives, discussing key issues Target: 85% Tourism New Zealand’s activity in this area impacting on them, and updating the industry on Performance: 91% aims to optimise delivery capability, focus TNZ activities. In total, 554 industry representatives marketing activity on clearly defined higher attended the road show sessions. Discussions Status: Achieved value visitors, and the following FY18 and showed the industry remained positive; however overarching strategic priorities. concerns about the sustainability of growth and the • Develop visitor insights and 100% Pure sentiment of the wider New Zealand community New Zealand Experiences to shape were top of mind for many. industry future. TOURISM NEW ZEALAND This sentiment also emerged from our PERFORMANCE AS A NATIONAL • Broaden our measure of value from near- bi-annual ‘Mood of the Nation’ survey. TOURISM ORGANISATION ADDS term growth to long-term sustainability. This research, completed by Kantar TNS VALUE TO TOURISM INDUSTRY and funded jointly by Tourism New Zealand Manage our portfolio of markets and STAKEHOLDER ACTIVITIES • and Tourism Industry Aotearoa, has been sectors as a strategic investor. undertaken every six months since 2015 to track Target: 80% • Work with government and partners to public understanding and views on tourism. Performance: 84% sustain and improve the experience of Respondents to the March 2018 survey appeared visitors and host communities. well aware of the benefits and opportunities that Status: Achieved tourism brings to the New Zealand economy, How did we do? however pressure on infrastructure remains Tourism New Zealand has an increasingly the top concern New Zealanders have with important role to play in sustaining growth, international tourism, alongside accommodation both in attracting the best visitors for shortages, environmental damage, and freedom New Zealandand in preparing New Zealand to camping – challenges in which the private and benefit socially, environmentally and economically public tourism sectors are collaborating to resolve.
The power of manaakitanga Almost all New Zealanders surveyed in March in “While our landscapes capture the the ‘Mood of the Nation’ survey strongly agreed imagination of prospective visitors to or agreed that international tourism is good for Aotearoa, it is manaakitanga, the very New Zealand (96%). Respondents identified Kiwi act of hospitality and sharing, that sets economic and employment opportunities as New Zealand apart on the world stage as key benefits of international tourism, including a highly desirable visitor destination and economic growth for the regions (60%), brings visitors back time and time again,” growth opportunities for businesses (59%) and Stephen England-Hall, Tourism New Zealand’s employment opportunities for residents (52%). Chief Executive. Additionally, 88% of New Zealanders take pride in making visitors feel welcome in New Zealand.
14 Active visits: a visit where the visitor interacts with the site’s content or functionality. 15 Referrals: The number of people, who, once drawn to newzealand.com from paid search or display digital activity, are then delivered to an operator or partner site where travel/experiences can be purchased.
32 33 Tourism New Zealand Annual Report | 2017/2018 The 2017/2018 year
The 2017/2018 year
Regional Spotlight: Northland
Spend from Victorian-based Australians in Northland increased
% The pilot was the first 18 “ Tourism New Zealand campaign focused on a Totalplane arrivals to Northland grew single region to test whether we can influence a shift in % travel patterns toward our 18 Te Tai Tokerau / Northland – the ‘winterless regional campaign benefitted not just Northland less visited regions. north’, home to ancient living forests, but all of New Zealand. Results are being used ” incredible marine life, cultural experiences, the to inform future campaign work. incomparable Bay of Islands; and the location of “The pilot was the first Tourism New Zealand Tourism New Zealand’s first regional dispersal Our media programme secured campaign focused on a single region to test Stephen England-Hall, pilot campaign focused on a single region whether we can influence a shift in travel ‘Everyday a different journey in Northland’. Tourism New Zealand’s Chief Executive patterns toward our less visited regions. We $ Together with Northland Inc, Facebook, Flight are focused on encouraging more international Centre and Air New Zealand, a pilot campaign visitors to the regions to share the economic ran in 2017 reaching 1.5m Australians in the benefits tourism delivers. The results of this test 24 state of Victoria and promoting travel in FY18’s proved that yes we can, however visitor spend million shoulder periods. is limited by what products are available in During the travel period promoted in the single the region,” says Tourism New Zealand’s Chief Executive, Stephen England-Hall. EAV of global media coverage region Northland campaign, credit card spend featuring Northland and from Victorian-based Australians in Northland Collaborative efforts between Northland Inc and increased 18.2%, compared to the rest of Tourism New Zealand have yielded positive results Australian cards (+3.6%). Interestingly, total to date. The International Media Programme, for arrivals from the State of Victoria across example secured $24.85m worth of global media New Zealand grew +18%, showing that the coverage featuring Northland (787 stories). 787 stories
34 35 Tourism New Zealand Annual Report | 2017/2018 Awards
Awards
New Zealand’s achievements and awards Gold award Partner of ‘Best Tourism at the 2017 the Year Office in Prevue Visionary Australia’ Awards
Virtuoso’s Tourism Board At the 2017 Australia Federation of Travel (IMEX America) for offering the (for a third year in a row). Agents, National Travel Industry Awards. best incentive experience.
Most Preferred Best Asian Best Country Destination Destination on Earth
Awarded to New Zealand at the annual Traveller Awarded to New Zealand voted Voted as New Zealand for the fifth year in a row Made, Essence of Luxury Forum in France. by Asia Tourism in Shanghai at the 2017 Telegraph Readers Travel Awards.
2nd for Best Outbound International 5th for Best in Adventure Travel list Destination Satisfaction Destination 2018 award
New Zealand’s ranking in Lonely Planet’s New Zealand’s ranking in the China Tourism At the Outlook Traveller top 10 countries to visit in 2018. Academy’s China Outbound Tourism Awards in New Delhi Development 2017 report.
36 37 Once you have visited our place you are part of the whānau, you are welcome forever
38 39 Meet the Team
Meet the Team
The Board
Kerry Prendergast (CNZM) – Chair Stakeholder Engagement Manager for the Tertiary He has held senior positions in a range From top left to right Education Commission and a Board member of of industries, including manufacturing, Kerry Prendergast has chaired Tourism Learning State (the state sector industry training marketing and telecommunications, and Kerry Prendergast New Zealand since August 2011. organisation). Raewyn now chairs the Southern was the former Chief Executive of Ngai Tahu Richard Leggat The former Mayor of Wellington (2001-2010) Health and Disability Ethics Committee, and is a Tourism. He has held board positions with Raewyn Idoine and Vice-President of Local Government director of Christchurch City Council’s subsidiary the New Zealand Tourism Industry Aotearoa New Zealand holds an MBA from Victoria Transition Holdings Limited, and Canterbury and the New Zealand Conservation Authority. Mike O’Donnell University of Wellington (where she is a Development Corporation. John was first appointed to the New Zealand Chris Parkin Distinguished Alumnus) and was made a Raewyn was appointed to the New Zealand Tourism Board in August 2012, and was reappointed Companion of the New Zealand Order of Merit John Thorburn Tourism Board in August 2015 for a three-year for a third term that ends 30 June 2019. in 2011 for her services to local government. Jamie Tuuta term, ending 5 September 2018. In addition to her Tourism New Zealand role, Jan Hunt Jamie Tuuta Kerry is also Chair of the Environmental Mike O’Donnell Protection Authority and the New Zealand Film Award winning Māori business leader, Jamie Commission. She is Deputy Chair of Wellington Mike “MOD” O’Donnell is a full-time director Tuuta chairs Te Ohu Kaimoana, the body set up Free Ambulance, a Trustee for New Zealand with a background in eCommerce, technology, to oversee Māori fisheries assets throughout Community Trust, a Director for Oceania tourism and funds management. New Zealand, conservation project Taranaki Healthcare, Compass Health, and Wellington Mike is chairman of cloud-based booking Mounga, and Māori Television. Jamie is the Māori Phoenix Football Club and Board member for the platform Timely, and is a director of Kiwibank, Trustee and Chief Executive of Te Tumu Paeroa, Victoria University Foundation. She also serves Kiwiwealth, G2G Knowhow, Serato Music, an organisation responsible for managing nearly on the Board of the New Zealand China Council. Raygun Performance Software and Radio 100,000 hectares of land and more than $100m worth of assets and investments. Kerry is also a patron and trustee of several New Zealand. He also writes a national New Zealand community organisations including business column for Fairfax Media/Stuff. Jamie has held a range of governance positions SPCA, Skylight Trust, and Motu Foundation, and The former Chief Operating Officer of Trade Me in iwi development, agribusiness, fishing, investment, health, Māori development, tourism is an ambassador for Alzheimer’s New Zealand. and vWork, MOD previously chaired Positively Wellington Tourism and has managed several online and education. He is currently a director of Moana On 18 August 2015 Kerry was reappointed for a travel businesses. MOD is active in motorsport and New Zealand, an export fishing company, and second term ending on 17 August 2018. Kerry will chairs the NZ Motorcycle Safety Summit. Taranaki Whānui Ltd, an iwi investment entity. continue as chair until 31 March 2019. MOD was appointed to the New Zealand Tourism In 2015 Jamie received the Young Māori Business Leader Award at the Aotearoa Richard Leggat – Deputy Chair Board on 15 October 2013. His second term ends 15 December 2019. New Zealand Māori Business Leaders Awards, Richard Leggat has a varied background across and was awarded the Sir Peter Blake Emerging business, marketing, and e-commerce and has Chris Parkin (CNZM) Leadership Award in 2010. been a full-time director for the last six years. Jamie was first appointed to the New Zealand Chris Parkin is a prominent arts patron and He assumed the role of Deputy Chair of Tourism Tourism Board in March 2013 and was reappointed entrepreneur owned the Museum Art Hotel New Zealand in December 2013. for a third term that ends on 30 June 2020. in Wellington for 22 years. A keen sportsman and recreational cyclist, Richard chairs the board of Nga Haerenga Chris was made a Companion of the New Zealand Jan Hunt – The New Zealand Cycle Trail Inc., the entity Order of Merit for services to the arts and business Jan Hunt joined the New Zealand Tourism Board charged with ensuring the success and in 2011, and continues to support budding artists on 27 June 2017. sustainability of the Government’s national cycle through the Parkin Drawing Prize, valued at $20,000. trail initiative. He is also a director of Auckland A former investment banker Chris was a Jan is also Deputy Chair of Skyline Enterprises Council’s regeneration organisation, Panuku Wellington City Councillor for nine years before and a board member of Jumping New Zealand, Development Auckland, and sits on the Boards retiring in 2004, and now owns several buildings chairing the Performance Committee. She has of Snow Sports New Zealand, Cycling NZ, Warren and properties in the greater Wellington area. previously sat on the board of the Queenstown and Mahoney Ltd, and Education New Zealand. Chamber of Commerce. Based in Queenstown, Chris is a director of a number of New Zealand Jan has a strong background in the tourism Richard was first appointed to the New Zealand property companies including Strada NZ Ltd sector, having worked as General Manager at Tourism Board on 1 February 2010 and completes (incorporating Museum Hotel Properties Ltd), Millbrook Resort, Sky City Hotel & Convention his third term on 5 September 2018. Coalmyne Ltd, Museum Apartments, Form Centre, and Millennium Queenstown. Apartments, Sloe Hand Ltd, Raglan Forestry Raewyn Idoine Limited, Gilmer Tower, and Dimension Holdings. Jan was reappointed for a second term that ends on 30 June 2021. The founder of New Zealand’s largest private Chris was appointed to the New Zealand Tourism tourism education provider, the New Zealand Board in December 2013. His second term ends School of Tourism (formerly the Sir George on 5 September 2018. Seymour National College of Tourism), Raewyn Idoine has been at the forefront of many tourism John Thorburn and business ventures around the country. John Thorburn is Chief Executive of InterCity Raewyn has significant experience at a senior Group, which operates New Zealand’s largest level in the education, tourism and health bus and coach transport network and is a sectors, having been Independent Chair of the significant operator of tourism activities, Local Government Industry Training Organisation, both in New Zealand and Australia.
40 41 Meet the Team
Meet the Team
Our Executive Team
From top left to right Stephen England-Hall, Chief Executive Sue Parcell, General Manager Stephen England-Hall joined Tourism Finance and Operations Stephen England-Hall New Zealand as Chief Executive on 3 April 2017. Sue Parcell joined Tourism New Zealand in Andrew Fraser Stephen has worked extensively in management August 2010 and is responsible for managing and leading the financial, property, René de Monchy consulting in the digital marketing, data, and technology sectors across New Zealand, the procurement, legal and risk management Sue Parcell United Kingdom, and North America. Prior functions of Tourism New Zealand, while also Rebecca Ingram to joining Tourism New Zealand Stephen was managing our IT infrastructure. Natalie Haines Chief Executive Officer of Loyalty New Zealand, Sue has had considerable experience in the the company behind New Zealand’s customer tourism industry, and has held senior finance loyalty and data coalition, Fly Buys, and the and general management roles in New Zealand analytics business LAB360. and overseas. He has a strong background in organisational leadership having held managerial positions Rebecca Ingram, General Manager including Chief Executive Officer, Managing Corporate Affairs Director, Growth and Innovation Director, and Chief Rebecca joined Tourism New Zealand in July Client Officer for social media marketing company 2014 as General Manager, PR and Major Events Syncapse Corporation, global media agency and in June 2018 took up the position of General Razorfish LLC (part of Publicis Groupe), DNA, EDS, Manager Corporate Affairs. In this role she BT Global Services, and CA Technologies. is responsible for overseeing relationships As the Tourism New Zealand Chief Executive with our key New Zealand stakeholders, Stephen is also a Board member of the including government ministers and NZ Inc, New Zealand China Council Board, the Tourism and manages Tourism New Zealand’s internal Industry Association, and The New Zealand and external communications, information Story. He sits on the New Zealand Screen management, and industry relations. Rebecca Production Grant Panel, and Significant has a strong background in public relations, Economic Benefits Verification Panel. marketing and communications having held senior management roles for the Chartered Andrew Fraser, Director of Marketing Accountants Australia and New Zealand, New Zealand Institute of Chartered Andrew Fraser joined Tourism New Zealand Accountants, and Telecom New Zealand. in 2013 and, up until his departure on 15 June 2018; he managed the most visible aspect of the 100% Pure New Zealand marketing campaign: Natalie Haines, General Manager consumer marketing and advertising activity. This People & Culture included overseeing the creative development, Natalie joined Tourism New Zealand in May and planning, researching and implementation of the leads people, culture and safety & wellness for campaign and advertising activity across Tourism our organisation. She brings with her more than New Zealand’s key markets. 16 years’ experience in the fields of organisational Andrew is a seasoned senior marketing leader change, developing capability, culture and with more than 20 years’ experience. Prior to recruitment. Prior to joining Tourism New Zealand joining Tourism New Zealand, Andrew ran his Natalie held senior people and culture roles at own strategic consultancy business in Auckland. Contact Energy, and Oranga Tamariki – Ministry He has held senior marketing and executive roles for Children. During this time both organisations with Cadbury/Kraft and Frucor Beverages/Danone, were undergoing significant change. and developed and launched V Energy drink. Executive changes during FY18: René de Monchy, Director of Trade, Tourism New Zealand farewelled the following PR and Major Events Executive Team members during FY18: Deborah René de Monchy joined Tourism New Zealand Gray, General Manager Corporate Affairs, Bridgid in August 2015. René brings 15 years’ global Kelly, General Manager People, and Andrew experience in consumer-led businesses Fraser, Director of Marketing. including local and international marketing roles for Fonterra, Heineken, and Asia Pacific Breweries in Singapore. René manages Tourism New Zealand’s global trade and public relations (PR) activity including leading offshore trade teams, the business and premium sectors, and trade marketing, along with international PR, and major events.
42 43 Tourism New Zealand Annual Report | 2017/2018 Meet the Team
Meet the Team
Our Whānau
“ Leonie has incredible By international standards Tourism New Zealand’s connections, is hugely whānau is relatively small – with 160 staff working knowledgeable about across our 13 locations globally. what she is doing and is a true ambassador for New Zealand ” Despite our geographical spread we are a Nui Awards, which are chosen by our executive Review close-knit team, aided by our intranet, Kōhanga, team at the end of the calendar year. Winners During FY18 Tourism New Zealand commissioned annual global community challenges, daily video receive our Whānau pendant and trophy. global professional services firm Price conferences across business groups, weekly • Whetū Wheriko (glistening star) – updates, and bi-annual internal Whetū awards Waterhouse Coopers to independently assess if presented each year to an individual member Candice is goal oriented recognising outstanding work and success across Tourism New Zealand had the right capabilities of the whānau who has made an outstanding “ our whānau. To be successful, nominees have to and resource to deliver against our four-year contribution to the organisation. and focused and delivers have displayed one or more of our values in their strategy. Towards the end of Q3 we sought input great work for the whole work, and their actions must have had a positive • Whetū Mātaiata (morning star)– recognising and ideas from all Tourism New Zealand whānau organisation. impact on achieving our strategic objectives: the achievement of someone who is new to and these were considered and helped inform ” ‘composed and sees the big picture’, ‘friendly the Tourism New Zealand whānau. the proposed changes. As a result of the review, and focused’, and ‘inclusive and decisive’. • Whetū Nui (Super Star) – selected from changes to our operating model were confirmed Winners from the bi-annual awards are the list of nominees from the previous two and put place in FY19. automatically nominated for our annual Whetū Whetū rounds. “ The team’s relationship with Bryce laid the groundwork for some of the most genuine destination videos we have seen.”
Whetū Wheriko Whetū Mātaiata Whetū Nui winners (Whetū Nui Awards October 2017) (Whetū Nui Awards October 2017) (Whetū Nui Awards October 2017) Leonie Ashford Candice Johanson Vanessa Farquharson, Brittany Hodill and As International Events Bid Manager, Leonie Since joining Tourism New Zealand in 2016, Mark Burt spends much of her time in planes and hotels Senior Communications Advisor Candice The work of this dynamic trio on the Bryce Dallas overseas but always maintains a passion for has proved herself as one always willing to Howard campaign led to their recognition as her work. “Leonie has incredible connections, go above and beyond to help other people Tourism New Zealand’s Whetū Nui. As well as is hugely knowledgeable about what she is doing – engaging and friendly and great fun to be being focused on the big picture, they were and is a true ambassador for New Zealand. She around. When presenting her Whetū award, inclusive, well-organised and had a keen eye is engaging and friendly and has natural warmth Stephen England-Hall said: “Candice is goal for detail. The team were passionate about that makes her a winner. She’s also a lot of fun to oriented and focused and delivers great work for the project, exploring new options to reach be with which just adds to her dynamic nature. the organisation.” good solutions and achieve great results. We are very lucky to have Leonie as part of our Throughout the project, they maintained clear whānau. She lives the Tourism New Zealand communications across the wider team, never values,” says Stephen England-Hall, Tourism losing their energy and acknowledging the wider New Zealand’s Chief Executive. team. reported, “I was lucky to spend time with Bryce Dallas Howard in the States and it was clear that our team had done a terrific job of building a relationship with Bryce that laid the groundwork for some of the most genuine destination material we have seen.”
44 45 Tourism New Zealand Annual Report | 2017/2018 Meet the Team
Meet the Team
Governance
The Board Disclosure of Interests The New Zealand Tourism Board (trading The Board is conscious of its obligations to ensure as Tourism New Zealand) is a Crown entity that board members avoid any conflicts of interest established under the New Zealand Tourism in their decision-making process. The Board Board Act 1991 and is a Crown agency for the ensures that a proper process is followed and purposes of the Crown Entities Act 2004. that members’ interests are formally recorded, Tourism New Zealand is governed by a with any changes or additions being disclosed Board appointed by the Minister of Tourism. at the start of each meeting. Members excuse All decisions relating to the operation of themselves from any discussions in which their Tourism New Zealand are made by, or under duty as a member could be compromised. the authority of, the Board in accordance with the New Zealand Tourism Board Act 1991, Risk Management and the Crown Entities Act 2004. Tourism New Zealand manages its risks through In accordance with the New Zealand Tourism a risk management framework; a process that Board Act 1991, the Board must have no fewer requires it to identify legislative and business risks than five, and no more than nine, members. arising from its strategic direction and operating The Minister’s formal line of accountability environment. with Tourism New Zealand is through the Tourism New Zealand’s Risk Management Policy Board’s Chair. Board appointments are is reviewed annually by the Audit Committee. The generally for two or three years, with Chief Executive reports to the Board on the matter reappointment possible. The composition of new or escalated risks and the processes in of the Board reflects a balance of tourism place to manage these appropriately. industry and commercial expertise. Tourism New Zealand conducts its own internal The Board meets at least six times a year, audits. Audits are agreed by the Audit Committee including a two-day meeting to review the and programmes of work are developed with input organisation’s ongoing strategic direction. by Tourism New Zealand’s external auditors. The This strategy meeting initiates the business results are reported back to the Audit Committee. planning process and informs the preparation of the annual Statement of Intent. Board Committees Committees of the Board are convened to deal Delegation with specific matters and include the Audit The Board delegates day-to-day management Committee and Remuneration Committee. of Tourism New Zealand to the Chief Executive The Audit Committee meets at least three times who is directly accountable to the Board a year. It reviews Tourism New Zealand’s internal through the Chair. Tourism New Zealand’s control framework, external audit relationships Delegated Authorities Policy is set by the and engagements, risk management, health and Board and reviewed annually. safety management, and financial reporting, Appropriate formal processes are in place including International Financial Reporting for reporting back to the Board. Standards (IFRS). The Remuneration Committee meets on an Induction and Development ad-hoc basis. It reviews the performance and Tourism New Zealand introduces each new remuneration of the Chief Executive and senior board member to the organisation through management. The committee also approves an induction process, which includes time proposed organisation-wide remuneration policies. spent with senior executives and their teams. Members are also encouraged, where Subsidiary companies appropriate, to attend tourism-related events Tourism New Zealand has two subsidiary such as TRENZ and other industry events. companies: Qualmark New Zealand (wholly owned), and the Visitor Information Network Incorporated, Conduct trading as i-SITE New Zealand. Legally Tourism Tourism New Zealand expects all its New Zealand owns the Visitor Information Network, employees and board members to maintain however, each of the 80-plus i-SITEs in New Zealand the highest ethical standards. Tourism are individually owned and operated. New Zealand has in place an employee code A member of Tourism New Zealand’s Executive of conduct, which all staff sign on joining the Team chairs the i-SITE Board and the i-SITE organisation. Tourism New Zealand also has a executive comprises two Tourism New Zealand formal code of conduct for its board members, staff members. Qualmark New Zealand is chaired which is consistent with the code released by by Tourism New Zealand’s General Manager the State Services Commission. Finance and Operations.
46 47 Tourism New Zealand Annual Report | 2017/2018 Meet the Team
Meet the Team
Equal Employment Opportunities
Tourism New Zealand operates in 12 offshore 2. Recruitment, selection 5. Remuneration, recognition and Under Section 151 (1)(g) of the Crown Entities markets and employs people of different and on-boarding rewards nationalities, race and ethnicity. We recognise Our recruitment and selection procedure has Tourism New Zealand differentiates Act, Tourism New Zealand is required to provide the value of a diverse workforce and the been developed to ensure that all prospective remuneration based on performance and importance of working together to deliver on employees are given the opportunity to is committed to compensating employees information about compliance with obligations outcomes. This is illustrated through its core participate equally in the recruitment process. competitively and equitably with attention organisational values, namely actions speak to be a good employer, including its Equal The selection process typically involves a to affordability and within the scope of louder, global whānau, and an unwavering belief structured competency and behaviourally-based available resources. The Tourism New Zealand in New Zealand. Women and people of Asian Employment Opportunities (EEO) Programme. interview, reference checking, a screening remuneration practice is supported by the descent continue to be well represented at all tool, and for senior positions, psychometric use of independent job evaluation and market levels of our organisation. Set out below is a work place profile for Tourism assessment, all of which are validated and remuneration information to establish salary Tourism New Zealand continues to support support EEO principles. ranges. Individuals identified as not meeting New Zealand as at 30 June 2018. the development and growth of our people the requirements of their role are provided and in order to facilitate this, has undertaken 3. Learning and development with support and development where required. the following: Tourism New Zealand has a management • Provided tools and information on Māori development and an accelerated development 6. Safety and wellbeing culture and language via Kōhanga and as programme, which includes facilitated Tourism New Zealand is committed to part of on-boarding. Executive Direct Reports to Executive Managers Other Managers with Staff Professional and and online learning, mentoring, coaching, maintaining a healthy and safe work Management or Staff with Responsibility for Responsibility (4th Tier) Support Staff • Continuation of the global community initiative 360 development and on-the-job learning. environment for our employees and contractors Specific Output Areas ‘Global Whānau’, which celebrates the diversity Appreciation and management of diversity is in undertaking our activities. Following a safety of the cultures represented at Tourism % of Group % of Group % of Group % of Group integrated into the agenda for each programme and wellness audit in FY17, we have refreshed New Zealand and improves communication to ensure participants further develop our focus from the development of safety NZ European and connectedness between offices. capability in this area. The organisation also and wellness processes and practices to the • Celebrated the achievements of our people has a succession and progression management maintenance of the programmes in place, and Men 33% 18% 6% 12% through the Whētu recognition programme. programme for the purpose of ensuring there is providing assurance through reporting, which the required depth and breadth of capabilities has been the focus in FY18. Female 50% 54% 39% 31% 1. Culture and accountability in the organisation to deliver on organisational Two Safety and Wellness Committees help outcomes. Learning and development needs are ensure employee participation in safety and Māori Tourism New Zealand remains committed to identified through this and on an individual basis wellness across the time-zones in the 12 countries being a good employer and as such, to managing through the development planning process. in which Tourism New Zealand operates. Tourism Male 1% and leading all employees fairly and properly in New Zealand has continued to provide a ‘great all aspects of their employment. This includes 4. Flexibility and work design hosting’ and driver training programme to ensure Female people in-market, where there are different that all staff who host and drive are skilled to do so jurisdictional requirements and statutory minima Tourism New Zealand has an active Pacific Peoples safely and to a high standard. Measures indicate in the areas of Equal Employment Opportunities organisational-wide programme of supporting these programmes continue to be very successful (EEO). Tourism New Zealand has an Equal flexible working arrangements and job design to Male and our employees feel increasingly that safety and Employment Opportunity Policy. assist employees to manage different aspects of wellness is well managed. Workplace assessments Female 9% work life balance. The organisation continues to: Tourism New Zealand has a well-defined mission, and the provision of special equipment continue Support employees with flexible working vision, set of values and behaviour expectations. • to be undertaken and provided to ensure that Asian (inc South Asian) arrangements. This framework provides ‘our story’ which has employees are able to contribute effectively in been fully integrated into our recruitment and Male 6% 4% • Support employees with disabilities or special all aspects of their working life. selection, performance management and the requirements through work place assessments, Tourism New Zealand has an Anti-Harassment reward and recognition programmes. Tourism design changes and accommodating individual Female 15% 19% & Discrimination Prevention Policy in place New Zealand has sought employee feedback needs in the work place. to ensure that employees, contractors and Other and input through a pulse engagement survey • Support parents in their return to work by managers work in an environment where they to assist in maintaining an environment where offering part-time and gradual return to feel comfortable and respected. The policy is Male 16% 9% 5% employees are motivated and supported. full-time arrangements, and flexitime to supported by workshops for our employees The leadership team and broader management Female 9% 33% 27% accommodate child care needs. across the globe to ensure they have the skills, group are committed to demonstrating leadership • Support expectant parents by granting knowledge and confidence to respond and % of Group of Total Org 4% 7% 22% 67% and accountability in all areas of EEO and, from additional paid time away from work to take action should they experience or witness an EEO perspective, this means a commitment to, attend appointments associated with unprofessional behaviour. Tourism New Zealand and activity in, the following areas. the pregnancy. has subsequently shared this work and resources with Regional Tourism New Zealand, which represents Regional Tourism Organisations across New Zealand, to support its anti- harassment efforts and to further strengthen good practice across the wider tourism industry.
48 49 Sometimes it can feel like your trip flashes “by in a second, but the friendships you make and the stories you share, last. #KiaOraNZ ”
@carlalala & @franny.plumridge
50 51 Tourism New Zealand Annual Report | 2017/2018 Financials
Financials
Financial statements
In terms of the Crown Entities Act 2004, the Board is responsible for the preparation of the New Zealand Tourism Board’s financial statements and statement of service performance, and for the judgments made in them. The Board of New Zealand Tourism Board has the responsibility for establishing, and has established, a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting. In the Board’s opinion, these financial statements and statement of service performance give a true and fair view of the financial position and operation of the New Zealand Tourism Board Group for the year ended 30 June 2018. The Members of the New Zealand Tourism Board and Group authorised these financial statements for issue on 5 September 2018. Signed on behalf of the Board:
Kerry Prendergast R. Leggat Chair Deputy Chair 5 September 2018 5 September 2018
52 53 Tourism New Zealand Annual Report | 2017/2018 Financials
Financial statements
Statement of comprehensive revenue and expense Statement of changes in equity for the year ended 30 June 2018 for the year ended 30 June 2018
Group Parent Parent
Notes 2018 Actual 2018 Budget 2017 Actual 2018 Actual 2018 Budget 2017 Actual Shareholders Foreign Exchange Accumulated Comprehensive $000s $000s $000s $000s $000s $000s Notes Equity $000s Reserve $000s Revenue and Expense $000s Total $000s Revenue from non-exchange transactions Balance at 1 July 2017 1,805 6,924 (3,261) 5,468 Revenue from Crown 2 117,350 117,350 117,350 117,350 117,350 117,350 Total comprehensive revenue and expense for the year - - 786 786 Transfer from / (to) retained earnings to foreign exchange Other revenue 3 1,171 1,100 946 1,171 1,100 946 17 - (1,066) 1,066 - reserve Revenue from exchange transactions Net total after foreign exchange transfer - (1,066) 1,852 786 Interest income 60 95 59 60 95 59 Balance at 30 June 2018 1,805 5,858 (1,409) 6,253 Other revenue 3 5,940 3,723 6,819 4,452 1,878 5,258 Total revenue 124,521 122,268 125,174 123,033 120,423 123,613 Statement of changes in equity for the year ended 30 June 2017 Expenditure Other expenses 4 127,174 121,446 123,516 125,613 119,604 121,644 Parent
Depreciation and amortisation 11,12 932 841 986 883 819 951 Shareholders Foreign Exchange Accumulated Comprehensive Notes Equity $000s Reserve $000s Revenue and Expense $000s Total $000s Total expenditure 5 128,106 122,287 124,502 126,496 120,423 122,595 Balance at 1 July 2016 1,805 4,121 (1,830) 4,096 Net operating surplus/(deficit) before foreign (3,585) (19) 672 (3,463) - 1,018 Total comprehensive revenue and expense for the year - - 1,372 1,372 exchange and taxation Transfer from / (to) retained earnings to foreign 17 - 2,803 (2,803) - exchange reserve Fair value gain (losses) on derivative financial 10 4,249 - 355 4,249 - 355 instruments Net total after foreign exchange transfer - 2,803 (1,431) 1,372 Balance at 30 June 2017 1,805 6,924 (3,261) 5,468 Income tax expense 20 ------Statement of changes in equity Net surplus/(deficit) for the year 664 (19) 1,027 786 - 1,372 for the year ended 30 June 2018
Total comprehensive revenue and (expense) 664 (19) 1,027 786 - 1,372 for the year Group
Foreign Accumulated Non- Transfer from / (to) foreign exchange reserves 17 1,066 - (2,803) 1,066 - (2,803) Shareholders Comprehensive Notes Equity $000s Exchange Revenue and Controlling Total $000s Reserve $000s Expense $000s Interest $000s Net operating surplus/(deficit) after foreign exchange 1,730 (19) (1,776) 1,852 - (1,431) Balance at 1 July 2017 1,805 6,924 (3,601) 183 5,311 transfer Total comprehensive revenue and expense for the year - - 568 97 665 Transfer from / (to) retained earnings to foreign exchange Net surplus/(deficit) for the year is attributable to: 17 - (1,066) 1,066 - - reserve Non-controlling interest 6 97 (19) (35) - - - Net total after foreign exchange transfer - (1,066) 1,634 97 665 Owners of the parent 567 - 1,062 786 - 1,372 Balance at 30 June 2018 1,805 5,858 (1,967) 280 5,980 664 (19) 1,027 786 - 1,372
Total comprehensive revenue and (expense) for the Statement of changes in equity year is attributable to: for the year ended 30 June 2017 Non-controlling interest 6 97 (19) (35) - - - Group Owners of the parent 567 - 1,062 786 - 1,372 Accumulated 664 (19) 1,027 786 - 1,372 Shareholders Foreign Comprehensive Non- Notes Equity $000s Exchange Revenue and Controlling Total $000s Reserve $000s Expense $000s Interest $000s Balance at 1 July 2016 1,805 4,121 (1,859) 218 4,285 Total comprehensive revenue and expense for the year - - 1,061 (35) 1,026 Transfer from / (to) retained earnings to foreign exchange 17 - 2,803 (2,803) - - reserve Net total after foreign exchange transfer - 2,803 (1,742) (35) 1,026 Balance at 30 June 2017 1,805 6,924 (3,601) 183 5,311
The notes and accounting policies on pages 58 to 77 form part of and are to be read in conjunction with these financial statements. The notes and accounting policies on pages 58 to 77 form part of and are to be read in conjunction with these financial statements.
54 55 Tourism New Zealand Annual Report | 2017/2018 Financials
Financial statements
Statement of financial position Statement of cash flows for the year ended 30 June 2018 for the year ended 30 June 2018
Group Parent Group Parent
2018 Actual 2018 Budget 2017 Actual 2018 Actual 2018 Budget 2017 Actual 2018 Actual 2018 Budget 2017 Actual 2018 Actual 2018 Budget 2017 Actual Notes $000s $000s $000s $000s $000s $000s Notes $000s $000s $000s $000s $000s $000s Current Assets Cash flows from operating activities Cash and cash equivalents 8 5,305 5,355 4,927 4,978 5,000 4,770 Crown revenue 117,350 117,350 117,350 117,350 117,350 117,350 Receivables from non-exchange transactions 9 151 177 105 151 160 105 Interest received 60 95 59 60 95 59 Receivables from exchange transactions 9 1,474 2,388 2,241 1,453 2,200 2,198 Other revenue from non-exchange transactions 1,132 983 999 1,131 1,000 999 Prepayments and other current assets 1,645 1,400 2,094 1,645 1,400 2,094 Other revenue from exchange transactions 6,503 3,355 6,872 5,100 1,478 5,294 Derivative financial instruments 10 2,969 1,456 - 2,969 1,456 - Payments to suppliers and employees (124,368) (122,368) (123,690) (122,954) (120,623) (122,000) 11,544 10,776 9,367 11,196 10,216 9,167 Goods and services tax (net) 440 - (82) 458 - (60) Net cash inflow/(outflow) from operating activities 18 1,117 (585) 1,508 1,145 (700) 1,642 Non-current Assets Property, plant and equipment 11 1,841 1,407 2,032 1,836 1,404 2,023 Cash flows from investing activities Intangible assets 12 971 1,009 1,123 903 954 1,014 Purchase of property, plant and equipment (613) (300) (1,346) (494) (300) (1,233) Accommodation bonds 13 388 350 408 388 350 408 Purchase of intangible assets - - - (118) - (46) Investment in subsidiary 6 - - - 260 60 60 Payments for accommodation bonds (24) - (76) (24) - (76) Derivative financial instruments 10 - 177 - - 177 - Net cash inflow/(outflow) from investing activities (637) (300) (1,422) (636) (300) (1,355) 3,200 2,943 3,563 3,387 2,945 3,505 Cash flows from financing activities Total Assets 14,744 13,719 12,930 14,583 13,161 12,672 Capital contribution - - - (200) - - Current Liabilities Non controlling interest capital contribution ------Creditors and other payables 14 6,750 4,688 4,632 6,539 4,600 4,468 Net cash inflow/(outflow) from financing activities - - - (200) - - Employee entitlements 15 763 831 801 743 800 766 Net decrease in cash held 480 (885) 86 309 - 287 Invoiced in advance 736 719 337 533 500 125 Effect of exchange rates on foreign currency balances (103) - (420) (103) - (420) Provisions 16 165 120 116 165 120 116 Opening cash brought forward 4,927 6,240 5,261 4,770 6,000 4,903 Current Lease Incentive Liability 52 - 52 52 - 52 Cash at end of year 8 5,304 5,355 4,927 4,976 6,000 4,770 Derivative financial instruments 10 - - 1,103 - - 1,103 8,466 6,358 7,041 8,032 6,020 6,630 Non-current Liabilities Provisions 16 96 150 150 96 150 150 Derivative financial instruments 10 - - 177 - - 177 Long Term Lease Incentive Liability 202 - 249 202 - 249 298 150 576 298 150 576 Total Liabilities 8,764 6,508 7,617 8,330 6,170 7,206 Net Assets 5,980 7,211 5,313 6,253 6,991 5,466
Equity Equity attributable to equity holders of the parent Shareholder's Equity 1,805 1,805 1,805 1,805 1,805 1,805 Accumulated Comprehensive Revenue and Expense (1,967) 1,083 (3,601) (1,409) 1,065 (3,261) Foreign Exchange Reserve 17 5,858 4,121 6,924 5,858 4,121 6,924 Parent interests 5,696 7,009 5,128 6,253 6,991 5,468 Non-controlling interests 6 280 202 183 - - - Total Equity 5,980 7,211 5,313 6,253 6,991 5,466
The notes and accounting policies on pages 58 to 77 form part of and are to be read in conjunction with these financial statements. The notes and accounting policies on pages 58 to 77 form part of and are to be read in conjunction with these financial statements.
56 57 Tourism New Zealand Annual Report | 2017/2018 Financials
Notes to the financial statements
(h) Intangible assets (m) Leases alternative method better represents the Note 1 Standard Title Application date Intangible assets are recorded at cost at The determination of whether an arrangement stage of completion of the transaction. (a) Reporting Entity PBE IPSAS 12, acquisition. Where there is no active market for 2016 Omnibus Amendments to PBE Standards 1 July 2018 is or contains a lease is based on the substance Interest: Interest revenue is recognised as Tourism New Zealand is a Crown entity as PBE IPSAS 27 these assets, or they are determined to hold no of the arrangement and requires an assessment interest accrues using the effective interest defined by the Crown Entities Act 2004 PBE IPSAS 1 Approved Budget (Amendments to PBE IPSAS 1) 1 July 2018 future economic benefit, they are written off in the of whether the fulfilment of the arrangement method. This is a method of calculating the and is domiciled in New Zealand. year of acquisition. Tourism New Zealand has no is dependent on the use of a specific asset or PBE Standards on interests in other entities: amortised cost of a financial asset and allocating PBE IPSAS 34, intangible assets with an infinite life. Tourism New Zealand’s primary objective PBE IPSAS 34 Separate Financial Statements assets and the arrangement conveys a right to the interest income over the relevant period using PBE IPSAS 35, is to improve tourism’s contribution to PBE IPSAS 35 Consolidated Financial Statements The useful life of intangible assets are estimated use the asset. the effective interest rate, which is the rate that PBE IPSAS 36, 1 July 2019 economic growth by increasing the value PBE IPSAS 36 Investments in Associates and Joint Ventures at between 3 and 8 years. Leases where the lessor retains substantially exactly discounts estimated future cash receipts PBE IPSAS 37, of international visitors to New Zealand. PBE IPSAS 37 Joint Arrangements through the expected life of the financial asset to PBE IPSAS 38 Research and development costs are expensed all the risks and benefits of ownership of the asset For the purposes of financial reporting, PBE IPSAS 38 Disclosure of Interests in Other Entities as incurred. are classified as operating leases. Operating lease the net carrying amount of the financial asset. Tourism New Zealand is classified as a PBE IPSAS 21, Impairment of Revalued Assets payments are recognised as an expense in the 1 July 2019 (o) Income tax Public Benefit Entity. PBE IPSAS 26 (Amendments to PBE IPSASs 21 and 26) (i) Inventories Statement of comprehensive revenue and expense Inventories are valued at the lower of cost and net on a straight-line basis over the lease term. Tourism New Zealand is exempt from income tax The financial statements for Tourism PBE IPSAS 39 Employee Benefits 1 July 2019 under the New Zealand Tourism Board Act 1991. realisable value. The Group does not enter into finance leases. New Zealand are for the year ended PBE IFRS 9 Financial Instruments 1 July 2018 Tourism New Zealand’s subsidiaries are subject 30 June 2018. (j) Trade and other receivables to income tax. PBE FRS 48 Service Performance Reporting 1 July 2021 (n) Revenue Trade receivables are recognised and carried at (b) Basis of preparation Revenue is recognised to the extent that it is Current tax assets and liabilities for the current original invoice amount less an allowance for any probable that the economic benefits will flow to the and prior periods are measured at the amount The financial statements have been prepared (d) Basis of consolidation (f) Foreign currency uncollectible amounts. on a going concern basis, and the accounting Group and the revenue can be reliably measured. expected to be recovered from or paid to The consolidated financial statements comprise Transactions denominated in foreign currency are policies have been applied consistently An estimate for doubtful debts is made when The specific recognition criteria described below the taxation authorities based on the current the financial statements of New Zealand Tourism recorded in NZ Dollars by applying exchange rates throughout the period. collection of the full amount is no longer probable. must also be met before revenue is recognised. period’s taxable income. The tax rates and tax Board trading as Tourism New Zealand and its that approximate rates prevailing at the date of the Bad debts are written off when identified. laws used to compute the amount are those Revenue from non-exchange transactions Statement of compliance subsidiaries as at 30 June each year (the Group). transaction. that are enacted or substantively enacted by the (k) Cash and cash equivalents The financial statements have been prepared Monetary assets and liabilities denominated in Grants received from the Crown: Grants Statement of Financial Position date. Subsidiaries are combined using the acquisition Cash and short-term deposits in the Statement in accordance with the requirements of the foreign currencies are translated at the rate of received from the Crown are recognised as method of combination. The financial statements of Financial Position comprise cash at bank and Deferred income tax is provided on all temporary Crown Entities Act 2004, which includes the exchange ruling at the balance sheet date. revenue on receipt. of subsidiaries are prepared for the same reporting in hand and short-term deposits with an original differences at the Statement of Financial Position requirement to comply with generally Sales and other revenue: Revenue includes period as the parent entity, using consistent Exchange gains and losses are recognised in the maturity of three months or less. date between the tax bases of assets and accepted accounting practice in New Zealand accounting policies. Statement of comprehensive revenue and expense. fees received to attend offshore trade events liabilities and their carrying amounts for (NZ GAAP). The financial statements have For the purposes of the Statement of Cash Flows, and familiarisations in New Zealand, and financial reporting purposes. Adjustments are made to bring into line any Non-monetary items that are measured in terms of cash and cash equivalents consist of cash and fees received to become part of an Approved been prepared in accordance with Public historical cost in a foreign currency are translated Deferred income tax liabilities are recognised dissimilar accounting policies that may exist. cash equivalents as defined above. Destination Status programme. The revenue from Benefit Entity (PBE) standards. using the exchange rate as at the date of the initial for all taxable temporary differences except: All intercompany balances and transactions, such transactions does not approximately equal Measurement base transaction. (l) Provisions including unrealised profits arising from intra- the value of goods provided by Tourism • when the deferred income tax liability arises Provisions are recognised when the Group has The financial statements have been group transactions, have been eliminated in full. (g) Property, plant and equipment New Zealand and are therefore considered from the initial recognition of goodwill or of an a present obligation (legal or constructive) as prepared on a historical cost basis modified as non-exchange transactions. asset or liability in a transaction that is not a Subsidiaries are consolidated from the date on Plant and equipment is stated at cost less a result of a past event, and it is probable that by the revaluation of certain assets and business combination and that, at the time of which control is transferred to the Group and accumulated depreciation and any impairment an outflow of resources embodying economic Revenue is recognised at fair value of cash liabilities as identified in this statement the transaction, affects neither the accounting cease to be consolidated from the date on which in value. benefits will be required to settle the obligation received or receivable when the risks and of accounting policies. profit or loss nor taxable profit or loss; or control is transferred out of the Group. Depreciation is calculated on a straight-line basis and a reliable estimate can be made of the rewards of ownership are transferred to the buyer The financial statements are presented in over the estimated useful life of the asset as follows: amount of the obligation. at the time of delivery of goods to the customer. • when the taxable temporary difference is Where there is loss of control of a subsidiary, associated with investments in subsidiaries, New Zealand dollars and all values are rounded Office equipment 5 years The services provided have a return obligation the consolidated financial statements include Where the Group expects some or all of a associates or interests in joint ventures, and to the nearest thousand dollars ($000). The Motor vehicles 4 – 5 years and therefore the revenue from supply of the results for the part of the reporting period provision to be reimbursed, for example under the timing of the reversal of the temporary functional currency is New Zealand dollars. Furniture and fittings 5 – 8 years services is recognised on a straight line basis during which Tourism New Zealand has control. an insurance contract, the reimbursement is difference can be controlled and it is probable Computer equipment 3 years over the specified period for the service unless (c) Accounting standards and interpretations recognised as a separate asset but only when that the temporary difference will not reverse (e) Investment in joint venture (JV) Leasehold improvements Up to term of the lease an alternative method better represents the issued but not yet effective the reimbursement is virtually certain. The in the foreseeable future. The Group’s investment in JV is accounted for expense relating to any provision is presented stage of completion of the transaction. In 2016, the External Reporting Board issued Realised gains and losses arising from the disposal under the equity method of accounting in the in the Statement of comprehensive revenue and Deferred income tax assets are recognised for all 2016 Omnibus amendments to PBE Standards. of property, plant and equipment are recognised Revenue from exchange transactions consolidated financial statements. expense net of any reimbursement. deductible temporary differences, carry-forward These amendments apply to PBEs with reporting in the Statement of Comprehensive Income in the period in which the transaction occurs. Sales and partnership revenue: Revenue of unused tax credits and unused tax losses, to periods beginning on or after 1 January 2017. The investment in the JV is carried in the considated If the effect of the time value of money is includes contributions from partners and the extent that it is probable that taxable profit Tourism New Zealand has applied these statement of financial position at cost plus post- Impairment material, provisions are determined by recharges to customers to recover full cost of will be available against which the deductible discounting the expected future cash flows at a amendments (PBE IAS 12 and PBE IFRS 5) in acquisition changes in the Group’s share of net The carrying values of plant and equipment are expenses incurred on their behalf. The revenue temporary differences and the carry-forward rate that reflects current market assessments of preparing its 30 June 2018 financial statements. assets of the JV, less any impairment in value. The reviewed for impairment when events or changes from the such supply of goods and services is of unused tax credits and unused tax losses the time value of money and, where appropriate, The External Reporting Board has also issued consolidated statement of comprehensive revenue in circumstances indicate the carrying value may recognised when the significant risks and rewards can be utilised, except: and expense reflects the Group’s share of the results the risks specific to the liability. amendments to the PBE suite to incorporate not be recoverable. of ownership of the goods have passed to the • when the deferred income tax asset relating of operations of the JV. Where discounting is used, the increase in requirements and guidance for the not-for-profit If any such indication exists and where the carrying buyer and can be measured reliably. Risks and to the deductible temporary difference the provision due to the passage of time is sector. These amendments apply to PBEs with Where there has been a change recognised values exceed the estimated recoverable amount, rewards are considered passed to the buyer at arises from the initial recognition of an recognised as a finance cost. reporting periods beginning on or after 1 July directly in the JV’s equity, the Group recognises the assets are written down to their recoverable the time of delivery of the goods to the customer. asset or liability in a transaction that is not 2018. Tourism New Zealand expects there will be its share of any changes and discloses this, when amount. Losses resulting from impairment are Revenue from the supply of services is a business combination and, at the time of minimal or no change in applying these updated applicable in the consolidated statement of reported in the Statement of comprehensive recognised on a straight line basis over the the transaction, affects neither the accounting accounting standards. changes in equity. revenue and expense. specified period for the service unless an profit or loss nor taxable profit or loss; or
58 59 Tourism New Zealand Annual Report | 2017/2018 Financials
• when the deductible temporary difference is The net amount of GST recoverable from, or (r) Employee Benefits Note 3 associated with investments in subsidiaries, payable to, the taxation authority is included Other Employee Entitlements: Employee associates or interests in joint ventures, as part of receivables or payables in the entitlements for salaries and wages, annual Other revenue Group Parent in which case a deferred tax asset is only Statement of Financial Position. leave, long service leave, retiring leave and other recognised to the extent that it is probable Cash flows are included in the Statement of similar benefits are recognised in the Statement 2018 $000s 2017 $000s 2018 $000s 2017 $000s that the temporary difference will reverse in Cash Flows on a gross basis and the GST of comprehensive revenue and expense when the foreseeable future and taxable profit will Sales and Partnership revenue from exchange transactions 5,940 6,819 4,452 5,258 component of cash flows arising from investing they accrue to employees. Employee entitlements be available against which the temporary to be settled within 12 months are reported at the Sales and other revenue from non-exchange transactions 1,171 946 1,171 946 difference can be utilised. and financing activities, which is recoverable from or payable to the taxation authority, are amount expected to be paid. The liability for long- Total Other revenue 7,111 7,765 5,623 6,204 The carrying amount of deferred income classified as operating cash flows. term employee entitlements is reported as the tax assets is reviewed at each Statement present value of the estimated future cash flows. Commitments and contingencies are disclosed of Financial Position date and reduced to Termination Benefits: Termination benefits are net of the amount of GST recoverable from, Note 4 the extent that it is no longer probable that recognised in the Statement of comprehensive sufficient taxable profit will be available to or payable to, the taxation authority. revenue and expense only where there is a Other expenses include: Group Parent allow all or part of the deferred income tax (q) Financial instruments demonstrable commitment to either terminate asset to be utilised. Tourism New Zealand uses derivative financial employment prior to normal retirement date or 2018 2017 2018 2017 Unrecognised deferred income tax assets are to provide such benefits as a result of an offer instruments such as foreign currency contracts Personnel expenses reassessed at each Statement of Financial to encourage voluntary redundancy. Termination to manage its exposure to foreign exchange risk Position date and are recognised to the extent benefits settled within 12 months are reported Number of permanent and fixed term staff 157 167 153 160 arising from its operational activities. Tourism that it has become probable that future taxable at the amount expected to be paid, otherwise 2018 $000s 2017 $000s 2018 $000s 2017 $000s profit will allow the deferred tax asset to be New Zealand does not hold or issue these they are reported as the present value of the recovered. financial instruments for trading purposes. estimated future cash flows. Salaries and wages 18,053 19,209 17,474 18,617 Tourism New Zealand has not adopted hedge Deferred income tax assets and liabilities are accounting. Statement of significant assumptions Employer superannuation contributions 444 455 427 438 measured at the tax rates that are expected Assumptions underlying the financial to apply to the year when the asset is realised Derivatives are initially recognised at fair value Increase/(decrease) in employee entitlements (note 15) (37) (27) (23) (30) statements include: or the liability is settled, based on tax rates on the date a derivative contract is entered into Other personnel expenses 1,669 1,003 1,636 953 (and tax laws) that have been enacted or and are subsequently re-measured to their fair • Crown funding is assured at least at the substantively enacted value at each balance date. Movements in the levels stated for the period of this Statement. 20,130 20,640 19,515 19,979 at the Statement of Financial Position date. fair value of derivative financial instruments are • No amount has been included for gains 2018 $000s 2017 $000s 2018 $000s 2017 $000s recognised in the Statement of comprehensive or losses on foreign exchange derivatives Deferred tax assets and deferred tax liabilities Personnel costs for New Zealand and offshore staff were: are offset only if a legally enforceable right revenue and expense. as these cannot be estimated because of exists to set off current tax assets against Foreign exchange gains and losses resulting uncertainty surrounding exchange rates over New Zealand Personnel Expenses - Tourism New Zealand 11,277 10,576 11,277 10,576 current tax liabilities and the deferred tax from the settlement of derivative financial the three year period. There is a risk that movements in exchange rates can result in New Zealand Personnel Expenses - Subsidiaries 615 661 - - assets and liabilities relate to the same taxable instruments and from the translation at year volatility in financial performance as fair value entity and the same taxation authority. end exchange rates of monetary assets and Offshore Personnel Expenses 8,238 9,403 8,238 9,403 movements on derivatives are recognised. (p) Other taxes liabilities denominated in foreign currencies are 20,130 20,640 19,515 19,979 recognised in the Statement of comprehensive • There is a risk that movements in exchange Revenues, expenses and assets are recognised rates can have a significant effect on the 2018 $000s 2017 $000s 2018 $000s 2017 $000s net of the amount of GST except: revenue and expense. spending power of Tourism New Zealand. Compensation or other benefits paid to ceased staff 263 67 263 67 • where the GST incurred on a purchase of Cash and cash equivalents include cash on To mitigate this risk as far as possible a Foreign goods and services is not recoverable from hand, cash in transit, bank accounts and Exchange Reserve is included in the Forecast 2018 2017 2018 2017 deposits with a maturity of no more than the taxation authority, in which case the Statement of Financial Position. The Reserve Number of ceased staff 8 2 8 2 GST is recognised as part of the cost of three months from date of acquisition. is designed to preserve the spending power 2018 $000s 2017 $000s 2018 $000s 2017 $000s acquisition of the asset or as part of the The fair value of forward exchange contracts of Tourism New Zealand during periods of expense item as applicable; and is calculated by reference to current forward adverse movements in exchange rates. Auditor's remuneration • receivables and payables are stated with the exchange rates for contracts with similar • The net asset position of subsidiaries will Amounts received or due and receivable by Ernst & amount of GST included. maturity profiles. not change significantly over the three years. Young for: The audit of the financial statements 90 89 81 80 Note 2 90 89 81 80 Amounts received or due and receivable by auditors Revenue from Crown Group Parent other than Ernst & Young New Zealand for: The audit of the financial statements of subsidiary entities 9 14 - - 2018 $000s 2017 $000s 2018 $000s 2017 $000s Other assurance services 17 17 15 15 Baseline Funding 121,460 121,535 121,460 121,535 During the year, additional funding was 117 120 96 95 provided by the Crown for the following: 2018 $000s 2017 $000s 2018 $000s 2017 $000s Additional Crown Funding - - - - Other expenses Total revenue received from the Crown 121,460 121,535 121,460 121,535 Loss on disposal of property, plant and equipment 18 23 18 22 Less GST 4,110 4,185 4,110 4,185 Lease expense 2,560 2,553 2,556 2,548 Net revenue received from the Crown 117,350 117,350 117,350 117,350 Remuneration of board members of Parent (See also note 30) 190 191 190 191
60 61 Tourism New Zealand Annual Report | 2017/2018 Financials
Note 5 Note 8
Total expenditure of parent Parent Cash and cash equivalents Group Parent
2018 $000s 2017 $000s 2018 $000s 2017 $000s 2018 $000s 2017 $000s Total expenditure by geographic region: Cash Holdings: Australia 20,823 19,027 Cash at bank and in hand 3,550 2,865 3,223 2,707 North America 19,889 19,646 Call accounts - foreign currencies 1,754 1,591 1,754 1,591 China 14,854 12,455 Call accounts - New Zealand dollar 1 472 1 472 United Kingdom and Europe 11,229 11,005 5,305 4,927 4,978 4,770 Japan 4,512 4,085 Cash at bank and in hand generally earns interest at floating rates based on daily bank deposit rates. Call account deposits are made depending on the Asia 10,649 14,504 immediate cash requirements of the Group, and earn interest at the respective money market call rates.
Other markets 2,997 2,916 2018 $000s 2017 $000s 2018 $000s 2017 $000s New Zealand (a) 41,543 38,957 Cash Holdings by Currency: Total Expenditure of Parent 126,496 122,595 New Zealand Dollar 1,886 1,611 1,559 1,453
(a) New Zealand expenditure includes costs that apply to all markets and across a number of campaigns including spend on the 100% Pure New Zealand Campaign, brand United States Dollar 868 466 868 466 development and the continued development of the newzealand.com website. British Pound 301 822 301 822 Note 6 Australian Dollar 516 86 516 86 European Euro 606 376 606 376 Subsidiary companies Interest Held Interest Held Japanese Yen 385 343 385 343 2018 2017 2018 2017 Singapore Dollar 129 494 129 494 Qualmark New Zealand Limited 100% 100% 100% 100% Canadian Dollar 12 45 12 45 Visitor Information Network Incorporated 0% 0% 0% 0% Indian Rupee 475 458 475 458 (trading as i-SITE NZ) Other Asian Currencies 127 226 127 226 The financial year-end of both subsidiaries is 30 June. 5,305 4,927 4,978 4,770 Qualmark New Zealand Limited Cash Holdings by Bank: Qualmark New Zealand Limited is New Zealand tourism’s official quality agency. Qualmark licenses professional and trustworthy New Zealand tourism businesses to use the Qualmark® - tourism’s official quality mark - to help international and domestic travellers select places to stay, things to do and ways HSBC Bank 4,799 3,913 4,472 3,755 to get around. Qualmark’s core activities are based around determining the eligibility of businesses to enter the licensing system. This is achieved by way National Bank of New Zealand 325 777 325 777 of assessment, promoting and working with Qualmark® licensees and working closely with other organisations and sectors within the tourism industry. By doing so, quality standards are raised and New Zealand tourism businesses improved based on best-practice. ASB Bank 22 19 22 19 Visitor Information Network Incorporated (trading as i-SITE NZ) Bank of New Zealand 2 2 2 2 Tourism New Zealand has control of Visitor Information Network Incorporated (VIN Inc), trading as i-SITE New Zealand, effective 21 August 2002. Tokyo Mitsubishi 157 216 157 216 Tourism New Zealand and i-SITE New Zealand have a relationship agreement that recognises the importance of having an effective and high quality network of visitor information centres, dedicated to delivering free, comprehensive and objective information. The terms and conditions of the relationship agreement 5,305 4,927 4,978 4,770 mean that Tourism New Zealand meets the criteria determined in PBE IPSAS 6 for consolidating investments in subsidiaries. The i-SITE brand creates a distinctive look, which distinguishes the official network from other information centres. The i-SITE Visitor Centres provide on-the-ground information The fair value of cash and cash equivalents for the Group is $5,305,000 (2017: $4,927,000) and $4,978,000 (2017: $4,770,000) for the Parent. to ensure the visitor experience is as enjoyable as possible. Tourism New Zealand holds a stand by Letter of Credit with HSBC bank for an amount of $360,000 to serve as security against any non-payment of payroll. This letter of credit has no expiry date. HSBC also provides a financial guarantee to Datacom Business Services, Tourism New Zealand’s payroll processor for Australian payroll an amount of AUD 42,000. Further, a financial guarantee for an amount of AUD 77,512 is also provided by HSBC bank for Sydney office Note 7 rent until 26 May 2019. A cheque encashment facility for $1000 also exists with HSBC. Qualmark holds a stand by Letter of Credit with HSBC for an amount of $26,000 to serve as security against any non-payment of payroll. This letter of credit has no expiry date. Joint Venture company Group Parent
2018 $000s 2017 $000s 2018 $000s 2017 $000s The New Zealand Way Limited - - - -
The financial year-end of The New Zealand Way Limited is 30 June. Tourism New Zealand has a 50% shareholding in The New Zealand Way Limited. This Company is the operating entity of a joint venture between Tourism New Zealand and New Zealand Trade & Enterprise. The activities of the joint venture is limited to the marketing and promotion of Brand New Zealand (both within New Zealand and offshore), the licensing and control of the use of Intellectual Property, and such other activities as may be unanimously agreed in writing by the parties. The New Zealand Way Brand provides marketing opportunities to those companies which meet quality and environmental standards. The Brand is promoted as a mark of outstanding quality, superior service and unique New Zealand characteristics. There were no impairment losses relating to the investment in Joint Venture. There were also no capital commitments or other commitments relating to the Joint Venture. During the year, there were no transactions in The New Zealand Way Limited (2017: Nil). Therefore the share of Joint Venture’s revenue and (deficit)/surplus for the year is Nil (2017: Nil). At year end, The New Zealand Way Limited’s Net Assets were Nil (2017: Nil). Therefore the carrying amount in the Joint Venture at year end is Nil (2017: Nil).
62 63 Tourism New Zealand Annual Report | 2017/2018 Financials
Note 9 Group Receivables Group Parent 2018 2017
2018 $000s 2017 $000s 2018 $000s 2017 $000s Gross $000s Impairment $000s Net $000s Gross $000s Impairment $000s Net $000s Receivables 151 105 151 105 Not past due 1,313 - 1,313 1,958 - 1,958 Past due 1 - 30 days 53 - 53 20 - 20 Less: Provision for impairment - - - - Past due 31 - 60 days 54 - 54 158 (2) 156 151 105 151 105 Past due 61 - 90 days 20 - 20 20 - 20 Receivables from non-exchange transactions are non-interest bearing and are generally on 30-day terms. The carrying value of receivables approximates their Past due > 91 days 33 - 33 87 - 87 fair value. As at 30 June 2018 and 2017, all overdue receivables have been assessed for impairment and appropriate provisions applied, as detailed below: 1,474 - 1,474 2,243 (2) 2,241
Parent The provision for impairment has been calculated based on expected losses determined by an analysis of losses in previous periods and a review of specific debtors. Receivables from exchange transactions for the Group include GST/VAT refunds comprising 61% (2017: 60%) of total receivables as follows: 2018 2017 Gross $000s Impairment $000s Net $000s Gross $000s Impairment $000s Net $000s 2018 $000s 2017 $000s 2018 $000s 2017 $000s Not past due 59 - 59 89 - 89 GST Refund due from NZ Inland Revenue Department 249 263 249 263 Past due 1 - 30 days 51 - 51 - - - GST Refund due from Australian Taxation Office 526 1,004 526 1,004 Past due 31 - 60 days 22 - 22 - - - Consumption Tax Refund from Japan Tax Office 160 55 160 55 Past due 61 - 90 days - - - 5 - 5 VAT Refund due from UK Revenue & Customs 55 63 55 63 Past due > 91 days 19 - 19 11 - 11 988 1,385 988 1,385 151 - 151 105 - 105 Note 10 Group Derivative financial instruments 2018 2017 Tourism New Zealand uses foreign exchange instruments in order to manage its exposure to fluctuations in foreign currency exchange rates on normal operating activities. The instruments are matched with anticipated future cash flows in foreign currencies. Tourism New Zealand does not use financial Gross $000s Impairment $000s Net $000s Gross $000s Impairment $000s Net $000s instruments for speculative purposes. At balance date Tourism New Zealand had 70 (2017: 92) foreign exchange contracts maturing at various dates over Not past due 59 - 59 89 - 89 the next 12 months. The contracts are financial assets at fair value through profit or loss and designated as held for trading financial instruments with fair Past due 1 - 30 days 51 - 51 - - - value gains or losses recognised in the Statement of Comprehensive Revenue and Expense. Past due 31 - 60 days 22 - 22 - - - Group Parent Past due 61 - 90 days - - - 5 - 5 Past due > 91 days 19 - 19 11 - 11 Foreign currency forward exchange contracts: 2018 $000s 2017 $000s 2018 $000s 2017 $000s 151 - 151 105 - 105 Foreign exchange contracts at 30 June - Sell Value 58,203 75,180 58,203 75,180 Fair value Derivatives in Gain / (Loss) 2,969 (1,280) 2,969 (1,280) Receivables from non-exchange transactions are non-interest bearing and are generally on 30-day terms. The carrying value of receivables approximates their Foreign exchange contracts at 30 June - Buy Value 61,171 73,900 61,171 73,900 fair value. As at 30 June 2018 and 2017, all overdue receivables have been assessed for impairment and appropriate provisions applied, as detailed below: Foreign exchange contracts by currency (In NZD): Receivables from exchange transactions 2018 $000s 2017 $000s 2018 $000s 2017 $000s United States Dollar 28,764 35,466 28,764 35,466 Receivables 1,474 2,243 1,453 2,198 British Pound 5,579 5,516 5,579 5,516 Less: Provision for impairment - (2) - - Australian Dollar 14,579 22,000 14,579 22,000 1,474 2,241 1,453 2,198 European Euro 4,077 4,228 4,077 4,228 Japanese Yen 4,347 4,168 4,347 4,168 Receivables from exchange transactions are non-interest bearing and are generally on 30-day terms. The carrying value of receivables approximates their fair Singapore Dollar 3,825 2,523 3,825 2,523 value. As at 30 June 2018 and 2017, all overdue receivables have been assessed for impairment and appropriate provisions applied, as detailed below: 61,171 73,900 61,171 73,900 Parent
2018 2017 Gross $000s Impairment $000s Net $000s Gross $000s Impairment $000s Net $000s Not past due 1,130 - 1,130 1,925 - 1,925 Past due 1 - 30 days 29 - 29 18 - 18 Past due 31 - 60 days 44 - 44 151 - 151 Past due 61 - 90 days 18 - 18 18 - 18 Past due > 91 days 232 - 232 86 - 86 1,453 - 1,453 2,198 - 2,198
64 65 Tourism New Zealand Annual Report | 2017/2018 Financials
Note 11 Note 12
Property, plant and equipment Group Parent Intangible assets Group Parent
2018 $000s 2017 $000s 2018 $000s 2017 $000s 2018 $000s 2017 $000s 2018 $000s 2017 $000s All property, plant and equipment Intangible assets At cost 9,400 8,974 9,359 8,933 At cost 2,322 2,200 2,133 2,015 Accumulated depreciation (7,559) (6,943) (7,523) (6,910) Accumulated amortisation (1,351) (1,078) (1,230) (1,002) Net carrying amount 1,841 2,031 1,836 2,023 Net carrying amount 971 1,123 903 1,013
Property, plant and equipment for each class: Intangible assets reconciliation Furniture and fittings At 1 July, net of accumulated amortisation 1,123 1,336 1,014 1,257 At cost 1,214 1,250 1,186 1,223 Accumulated depreciation (1,145) (1,148) (1,118) (1,121) Additions 123 105 118 46 Net carrying amount of furniture and fittings 69 102 68 102 Impairment of Intangible assets - - - - Amortisation charge for the year (273) (319) (228) (290) Leasehold improvements At 30 June, net of accumulated amortisation 971 1,123 903 1,013 At cost 3,278 3,198 3,278 3,198
Accumulated depreciation (2,172) (1,847) (2,172) (1,847) Intangible assets include investment into redevelopment of Tourism New Zealand’s corporate website and intranet, Tourism New Zealand’s and Qualmark’s Net carrying amount of leasehold improvements 1,106 1,350 1,106 1,350 finance and HR system, and Visitor Information Network Incorporated’s BookIt software.
Office equipment At cost 768 733 768 733 Note 13 Accumulated depreciation (664) (628) (664) (628) Accommodation bonds Net carrying amount of office equipment 104 105 104 105 Accommodation bonds are refundable deposits or key money paid for the lease of office and housing premises.
Motor vehicles Group Parent At cost 61 61 61 61 2018 $000s 2017 $000s 2018 $000s 2017 $000s Accumulated depreciation (61) (61) (61) (61) Japan 134 122 134 122 Net carrying amount of motor vehicles - - - - North America 50 46 50 46 Computer equipment Asia 204 162 204 162 At cost 4,079 3,732 4,065 3,718 New Zealand - 78 - 78 Accumulated depreciation (3,518) (3,259) (3,508) (3,253) 388 408 388 408 Net carrying amount of computer equipment 561 473 557 465 Total property, plant and equipment 1,841 2,031 1,836 2,023 Note 14 All property, plant and equipment reconciliation Creditors and other payables At 1 July, net of accumulated depreciation 2,032 1,480 2,023 1,477 Payables are non-interest bearing and are normally settled on 30-day terms, therefore the carrying value of creditors and other payables approximates Additions 490 1,240 490 1,229 their fair value. Disposals and write back of depreciation (21) (22) (21) (22) Depreciation charge for the year (659) (667) (655) (661) Group Parent
At 30 June, net of accumulated depreciation 1,841 2,031 1,836 2,023 2018 $000s 2017 $000s 2018 $000s 2017 $000s Depreciation by asset class: Creditors 1,193 977 1,018 886 Furniture and fittings 24 28 23 26 Accrued expenses 5,557 3,655 5,521 3,582 Leasehold improvements 324 192 324 192 6,750 4,632 6,539 4,468 Office equipment 38 28 38 28 Computer equipment 273 420 269 416 Total Depreciation 659 668 655 662
66 67 Tourism New Zealand Annual Report | 2017/2018 Financials
Note 15 Note 18
Reconciliation of surplus to net cash from Employee entitlements Group Parent Group Parent operating activities 2018 $000s 2017 $000s 2018 $000s 2017 $000s 2018 $000s 2017 $000s 2018 $000s 2017 $000s Annual Leave 763 801 743 766 Net surplus/(deficit) 664 1,027 786 1,373 763 801 743 766 Add/(less) non-cash items Note 16 Depreciation and amortisation 932 986 883 951 Provisions Provisions (1) - (1) - Tourism New Zealand has a number of potential future restoration costs relating to make good clauses on office rental leases. The provision recognises the Share of associate's surplus - - - - present value of expected future payments for amounts in relation to make good. The provision relates to four Tourism New Zealand offices and is expected to be incurred over the next eight years. Net (gains)/losses on derivative financial instruments (4,249) (355) (4,249) (355) Net foreign exchange (gains)/losses 103 420 103 420 Group Parent Total non-cash items (3,215) 1,051 (3,264) 1,016
2018 $000s 2017 $000s 2018 $000s 2017 $000s Add/(less) items classified as investing or financing Provisions are represented by: activities Net Loss/(Gain) on disposal of assets 18 22 18 22 Lease make-good 261 266 261 266 Movement in foreign currency accommodation bonds 46 20 46 20 Total Provisions 261 266 261 266 Lease Incentive Liability (45) 301 (45) 301 Current provision 165 116 165 116 Total items classified as investing or financing activities 19 343 19 343 Non-current provision 96 150 96 150 Add/(less) movements in working capital items 261 266 261 266 Debtors and other receivables 722 245 699 100 2018 $000s 2017 $000s 2018 $000s 2017 $000s Prepayments 449 (692) 449 (692) Movements in provisions are as follows: Payables and accruals 2,117 (74) 2,071 (110) Balance at 1 July 266 266 266 266 Invoiced in advance 399 (366) 408 (358) Additional provisions made 120 - 120 - Employee entitlements (38) (26) (23) (30) Amounts used - - - - Net movements in working capital items 3,649 (913) 3,604 (1,090) Unused amounts reversed (125) - (125) - Net cash from operating activities 1,117 1,508 1,145 1,642 Balance at 30 June 261 266 261 266 Note 19 Note 17 Contingencies Foreign Exchange Reserve Tourism New Zealand has no contingent assets or liabilities as at 30 June 2018. Tourism New Zealand funds its overseas offices and operations in the local currency of that office or operation. Some of the surplus/(deficit) arising In 2017/2018, Tourism New Zealand has provided a written undertaking to the Board of Qualmark New Zealand to provide ongoing support sufficient to from foreign currency movements are held in reserve to finance changes in the New Zealand dollar cost of maintaining a consistent level of funding enable Qualmark to meet its obligations when they were due. to those overseas offices or operations. Only the realised gains or losses on foreign currency transactions during the year are transferred to reserves, and the unrealised gains or losses on mark to market revaluation of derivatives held at year end are not transferred to reserves. Note 20 Group Parent Income tax Tourism New Zealand is exempt from income tax under the New Zealand Tourism Board Act 1991. Tourism New Zealand’s subsidiaries are subject to 2018 $000s 2017 $000s 2018 $000s 2017 $000s income tax. The Group has tax losses that can be used to offset future taxable profits of $705,321 (2017: $401,254). A deferred tax asset has not been Movements in reserve is as follows: recognised in respect of these losses as they may not be used future taxable profits. Balance at 1 July 6,924 4,121 6,924 4,121 Transfer to Retained Earnings from Foreign Exchange Reserve (1,066) 2,803 (1,066) 2,803 Balance at 30 June 5,858 6,924 5,858 6,924
68 69 Tourism New Zealand Annual Report | 2017/2018 Financials
Note 21 Note 25 Management of risk Capital commitments Tourism New Zealand has developed a risk management framework and has undertaken a full risk assessment of its business. Management is required to There is no capital expenditure contracted for at balance date but not provided for in the financial statements. (2017:Nil) sign off on a half yearly basis that no new exposures have arisen and that existing risks are being properly managed. Written policies and procedures exist covering those aspects of business which have the potential to generate risk for Tourism New Zealand. Adherence to these policies minimises potential risk to Tourism New Zealand. Employees are required as part of employment contracts to adhere to Tourism New Zealand policies and procedures. Note 26 Tourism New Zealand carries comprehensive insurance covering all normal business risks including Public Liability. Tourism New Zealand has purchased insurance to provide Board members and Officers Liability, Employers Liability and Professional Indemnity cover for Board members and employees. Tourism Operating commitments New Zealand also provides cover for its staff for offshore travel. Insured values are reviewed annually and adjusted to reflect changes in business operations. Operating commitments include non-cancellable lease payments for premises, motor vehicles and office equipment and non-cancellable contracts for services like equipment maintenance and public relations.
Note 22 Group Parent Significant accounting judgements, estimates and assumptions 2018 $000s 2017 $000s 2018 $000s 2017 $000s The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in Operating commitments payable after balance date on: the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. These judgements and estimates are based on historical experience and other factors that are reasonable under the circumstances and Non-cancellable accommodation leases: form the basis for the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and conditions. Up to One Year 2,132 1,656 2,132 1,656 One to Two Years 1,409 1,447 1,409 1,447 Note 23 Two to Five Years 2,200 2,191 2,200 2,191 Capital management Over Five Years - - - - Tourism New Zealand’s capital is its equity, which comprises accumulated funds and other reserves. Equity is represented by net assets. Tourism 5,741 5,294 5,741 5,294 New Zealand manages its equity as a by-product of prudently managing revenues, expenses, assets, liabilities, investments and general financial Non-cancellable motor vehicle and equipment Leases dealings to ensure that Tourism New Zealand effectively achieves its objectives and purpose, whilst remaining a going concern. Tourism New Zealand is subject to the financial management and accountability provisions of the Crown Entities Act 2004, which impose Up to One Year 107 106 107 101 restrictions in relation to borrowings, acquisition of securities, issuing guarantees and indemnities and the use of derivatives. One to Two Years 82 82 82 82 Tourism New Zealand purchases a variety of foreign currencies to fund promotional activity offshore. As this is funded in NZ Dollars, there is an exposure Two to Five Years 18 81 18 81 to foreign exchange risk through the movement of NZ Dollars against those foreign currencies. To manage this risk and improve operational flexibility, a foreign exchange reserve was set up in 2009/10 that comprised of the realised gains from that year to be used solely to offset future realised foreign Over Five Years - - - - exchange gains and losses. Refer to Note 17 for more information.” 207 269 207 264 Non-cancellable contracts for goods and services Note 24 Up to One Year 2,373 3,324 2,373 3,324 Categories of financial assets and liabilities One to Two Years 25 1,748 25 1,748 The carrying amounts of financial assets and liabilities in each of the PBE IPSAS 29 categories are as follows: Two to Five Years 1 5 1 5 Over Five Years - - - - Group Parent 2,399 5,077 2,399 5,077 2018 $000s 2017 $000s 2018 $000s 2017 $000s Total operating commitments 8,347 10,640 8,347 10,635 Financial assets: Cash and cash equivalents 5,305 4,927 4,978 4,770 Receivables 637 961 616 918 Total loans and receivables 5,942 5,888 5,594 5,688
Fair value through Surplus or Deficit held for trading: Derivative financial instrument assets / (liabilities) 2,969 (1,280) 2,969 (1,280)
Other financial liabilities: Creditors 6,750 4,632 6,539 4,468
70 71 Tourism New Zealand Annual Report | 2017/2018 Financials
Note 27 Related party transactions Tourism New Zealand is a wholly owned entity of the Crown which has the ability to significantly influence its role. The Crown is Tourism New Zealand’s Key management personnel compensation major source of revenue. Key management personnel includes all board members, the Chief Executive and 12 (2017:12) members of the Executive Team. Tourism New Zealand enters into transactions with government departments, state-owned enterprises and other Crown entities. Those transactions that occur within a normal supplier or client relationship on terms and conditions no more or less favourable than those which it is reasonable to expect Tourism New Zealand would have adopted if dealing with that entity at arm’s length in the same circumstances have not been disclosed as related party transactions. Related Party and Transaction Balance outstanding year ended 30 June Tourism New Zealand also enters into transactions with its subsidiaries and associate. These transactions occur within a normal supplier or client 2018 $000s 2017 $000s relationship on terms and conditions no more or less favourable than those which it is reasonable to expect Tourism New Zealand would have adopted if dealing with that entity at arm’s length as well. Remuneration of the Board of Directors: Tourism New Zealand also enters into transactions with board members and entities over which they have control or significant influence. These Salaries and other short-term benefits 190 191 transactions occur within a normal supplier or client relationship on terms and conditions no more or less favourable than those which it is reasonable to expect Tourism New Zealand would have adopted if dealing with that entity at arm’s length. The following table provides the total amount of transactions Remuneration of the Chief Executive and Executive Team: that were entered into with these related parties. Salaries and other short-term benefits, FTE: 13 (2017: 12.67) 3,644 3,609 Termination benefits 181 - Related Party and Transaction Transaction value year ended 30 June Balance outstanding year ended 30 June Total key management personnel compensation 4,014 3,800 2018 $000s 2017 $000s 2018 $000s 2017 $000s Income has been received by Tourism New Zealand from: J Thorburn (Director): Intercity Group Limited - Income received 28 7 - - by TNZ for tourism-related services
N Thompson (Director): Auckland Tourism, Events & Economic - 500 - - Development - Income received by TNZ for tourism-related services
S England-Hall (Director): Tourism Industry Association - Income - 11 - - received by TNZ for tourism-related services
M O'Donnell (Director): Ruapehu Alpine Lifts Limited - Income 152 - - - received by TNZ for tourism-related services
J Hunt (Director): Skyline Enterprises - Income received by TNZ 48 - - - for tourism-related services
Payments have been made by Tourism New Zealand to: J Thorburn (Director): Intercity Group Limited - Provision of - 5 - - tourism-related services to TNZ
J Spice (Director): Touch of Spice Ltd - Provision of tourism- - 4 - - related services to TNZ
N Thompson (Director): Auckland Tourism, Events & Economic - 62 - - Development - Provision of tourism-related services to TNZ
K Bowler (Director): Tourism Industry Association - Provision - 3 - - of tourism-related services to TNZ
J Tuuta (Director): Venture Taranaki Trust - Provision of 1 - - - tourism-related services to TNZ
S England-Hall (Director): Tourism Industry Association 69 43 - - - provision of tourism-related services
K Pendergast: New Zealand US & China Council Subscription 37 20 - - Fees 2017/2018, and prepayments for 2018/2019
M O'Donnell (Director): Kiwibank - Provision of tourism-related 20 - - - services to TNZ
J Hunt (Director): Skyline Enterprises - Provision of tourism- 10 - - - related services to TNZ
72 73 Tourism New Zealand Annual Report | 2017/2018 Financials
Note 28 Financial instrument risks Tourism New Zealand’s activities expose it to a variety of financial instrument risks, including market risk, credit risk and liquidity risk. Liquidity risk Tourism New Zealand has a series of policies to manage the risks associated with financial instruments and seeks to minimise exposure Liquidity risk is the risk that Tourism New Zealand will encounter difficulty raising liquid funds to meet commitments as they fall due. from financial instruments. These policies do not allow any transactions that are speculative in nature. Tourism New Zealand has no significant concentrations of liquidity risk. Tourism New Zealand annually agrees a funding schedule with Market Risk the Crown which matches the estimated timing of its commitments and close out of market positions. Interest rate risk - Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in interest rates. The following liquidity risk disclosures reflect all contractually fixed pay-offs, repayments and interest resulting from recognised financial and derivative Tourism New Zealand is exposed to interest rate risk on its cash balances. Refer to note 8 for cash balances exposed to interest rate risk. financial instrument liabilities as of 30 June 2018. The timing of cash flows for liabilities is based on the contractual terms of the underlying contract. Interest rate risk sensitivity analysis - As at 30 June 2018, if interest rates on cash balances had increased/decreased by 0.5% (50 basis points) with all other variables held constant, the deficit/surplus and equity would have changed as follows: < 6months $000s 6-12 months $000s > 1 year $000s Total $000s Group - Year end 30 June 2018 Financial liabilities Surplus/(deficit) higher/(lower) Equity higher/(lower) Creditors (1,193) - - (1,193) 2018 $000s 2017 $000s 2018 $000s 2017 $000s Derivative financial instrument liabilities - gross settled Group Inflows 28,300 32,229 - 60,529 + 0.5% (50 basis points) 3 4 3 - Outflows (26,802) (30,758) - (57,560) - 0.5% (50 basis points) (3) (4) (3) - 1,498 1,471 - 2,969 Parent Net outflow 305 1,471 - 1,776 + 0.5% (50 basis points) 2 4 2 - - 0.5% (50 basis points) (2) (4) (2) - Parent - Year end 30 June 2018 Financial liabilities Currency risk Creditors (1,018) - - (1,018) Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. Derivative financial instrument liabilities - gross settled As a result of significant operations around the world, Tourism New Zealand is required to enter into transactions denominated in foreign currencies. As a result of these activities, Tourism New Zealand is exposed to foreign currency risk on its foreign denominated cash balances, receivables, creditors Inflows 28,300 32,229 - 60,529 and other payables, and derivative instruments. Outflows (26,802) (30,758) - (57,560) It is Tourism New Zealand’s policy to manage foreign currency risks arising from contractual commitments and liabilities by entering into foreign exchange 1,498 1,471 - 2,969 forward contracts to significantly reduce the foreign currency exposure. These forward exchange contracts are entered into prior to the commencement of the financial year to cover the exposure on budgeted NZD spend in targeted markets based on the market’s economic outlook and other factors that might Net outflow 480 1,471 - 1,951 have an impact on their currency. Refer to Derivative financial Instruments (note 10) for details on the forward currency contracts held. Further exposures to foreign exchange risk through the movement of NZ Dollars against those foreign currencies are also managed through the foreign exchange reserve as Group - Year end 30 June 2017 Financial liabilities explained in Note 17. Creditors (977) - - (977) The basket of currencies that Tourism New Zealand holds also reduces the risk from any single currency as all currencies are not expected to move adversely against the NZD. Refer to the total expenditure of the Parent by geographic region (note 5) and Cash and cash equivalents (note 8) for currency exposures. Derivative financial instrument liabilities - gross settled Currency risk sensitivity analysis - Tourism New Zealand is subject to volatility in financial performance associated with foreign currency rates. Inflows 38,636 34,576 - 73,212 As at 30 June 2018, if the NZ Dollar had increased/decreased by 5% against various foreign currencies used by Tourism New Zealand with all Outflows (39,390) (35,102) - (74,492) other variables held constant, the deficit/surplus and equity would have changed as follows: (754) (526) - (1,280) Surplus/(deficit) higher/(lower) Equity higher/(lower) Net outflow (1,731) (526) - (2,257)
2018 $000s 2017 $000s 2018 $000s 2017 $000s Parent - Year end 30 June 2017 Financial liabilities Group NZD to various currencies +5% (3,026) 3,627 - - Creditors (886) - - (886) NZD to various currencies -5% (9,114) (21,394) - - Derivative financial instrument liabilities - gross settled Parent Inflows 38,636 34,576 - 73,212 NZD to basket of currencies +5% (3,026) 3,627 - - Outflows (39,390) (35,102) - (74,492) NZD to basket of currencies -5% (9,114) (21,394) - - (754) (526) - (1,280) Net outflow (1,640) (526) - (2,166) This movement is attributable to foreign exchange gains/losses on translation of forward foreign exchange contracts and other foreign currency denominated assets and liabilities. Fair value The Group can apply various methods in estimating the fair value of a financial instrument. The methods comprise: Credit risk Credit risk is the risk that a third party will default on its obligations to Tourism New Zealand, causing Tourism New Zealand to incur a loss. a) Level 1 - the fair value is calculated using quoted prices in active markets: Tourism New Zealand has no significant concentrations of credit risk, as it has a small number of credit customers and only places funds with registered b) Level 2 - the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly banks. With respect to foreign exchange instruments, Tourism New Zealand reduces its risk by limiting the counter parties to major trading banks and does (as prices) or indirectly (derived from prices); and not expect to incur any significant losses as a result of non performance by these counter parties. c) Level 3 - the fair value is estimated using inputs for the asset or liability that are not based on observable market data. Tourism New Zealand’s maximum credit exposure for each class of financial instrument is represented by the total carrying amount of cash (note 8), net Derivative financial instruments are classified as Level 2 and are valued using mid values of the forward contracts as determined by the New Zealand Debt debtors (note 9) and derivative financial instruments (note 10). There is no collateral held as security against these financial instruments, including those Management Office based on inputs that are observable. instruments that are overdue or impaired. There were no transfers between Level 1 and Level 2 during the year.
74 75 Tourism New Zealand Annual Report | 2017/2018 Financials
Note 29 Note 30
Remuneration of employees Remuneration of board members During 2017/2018 63 (2017: 65) employees received remuneration and benefits which exceeded $100,000 per annum as follows: Board members earned the following fees during the year:
$ 2018 2017 $ 2018 2017 100,000 - 109,999 4 12 K Prendergast (Chair) 42 42 110,000 - 119,999 13 8 R Leggat (Deputy Chair) 25 25 120,000 - 129,999 8 10 John Thorburn 20 20 130,000 - 139,999 10 6 Jamie Tuuta 23 23 140,000 - 149,999 3 3 Michael O’Donnell 20 20 150,000 - 159,999 4 4 Jacqui Spice - 2 160,000 - 169,999 3 3 Christopher Parkin 20 20 170,000 - 179,999 3 4 Norm Thompson - 19 180,000 - 189,999 3 1 Raewyn Idoine 20 20 190,000 - 199,999 1 2 Jan Hunt 20 - 200,000 - 209,999 1 3 190 191 210,000 - 219,999 2 - 220,000 - 229,999 1 1 Change in board members: Jan Hunt was appointed to the board on 1 July 2017 and Christopher Parkin was also reappointed in July 2017. Norm Thompson resigned on 14 April 2017. 230,000 - 239,999 1 - 240,000 - 249,999 - 2 250,000 - 259,999 1 2 Note 31 260,000 - 269,999 - - Events after the balance date 270,000 - 279,999 - - There were no significant events after the balance date. 280,000 - 289,999 - 1 290,000 - 299,999 - - 300,000 - 309,999 - 2 Note 32
310,000 - 319,999 1 - Explanations of major variance against budget 320,000 - 329,999 - - There are no major variations to budget other than those explained in the notes above. 330,000 - 339,999 1 - 340,000 - 349,999 1 - 390,000 - 399,999 - 1 490,000 - 499,999 1 - 570,000 - 579,999 1 - 63 65
Employee numbers who have earned $100,000 or more in FY18 has remained consistent with FY17 despite a small decrease in the offshore markets due to roles not being filled for a full year.
76 77 Tourism New Zealand Annual Report | 2017/2018 Financials
Five year financial summary for parent
Statement of Financial Position Statement of Comprehensive Income
2014 Actual $000s 2015 Budget $000s 2016 Actual $000s 2017 Actual $000s 2018 Budget $000s 2014 Actual $000s 2015 Budget $000s 2016 Actual $000s 2017 Actual $000s 2018 Budget $000s
Current Assets Income Cash 3,970 6,206 4,903 4,770 4,978 Revenue from Crown 113,730 113,350 115,850 117,350 117,350 Receivables 1,868 1,935 2,403 2,303 1,604 Interest 46 48 202 59 60 Prepayments and other current assets 934 1,545 1,402 2,094 1,645 Other revenue 8,349 6,378 5,416 6,204 5,623 Derivative financial instruments - 5,716 - - 2,969 122,125 119,776 121,468 123,613 123,033 6,772 15,402 8,708 9,167 11,196 Expenditure Non-current Assets Other expenses 122,190 119,114 120,621 121,644 125,613 Property, plant and equipment 1,929 1,699 1,477 2,023 1,836 Depreciation, amortisation and impairment 1,012 968 1,092 951 883 Intangible Assets 1,264 1,554 1,257 1,014 903 123,202 120,082 121,713 122,595 126,496 Accommodation bonds 257 280 350 408 388 Fair value gain (losses) on derivative financial (1,909) 8,536 (8,403) 355 4,249 Investment in subsidiary 60 60 260 instruments Derivative financial instruments - 1,054 - - - Total comprehensive income / (expense) (2,986) 8,230 (8,648) 1,372 786 3,450 4,587 3,144 3,505 3,387 Total Assets 10,222 19,989 11,852 12,672 14,583 Transfer from / (to) foreign exchange reserves 890 (527) 523 (2,803) 1,066
Current Liabilities Net operating surplus/(deficit) after foreign (2,096) 7,703 (8,125) (1,431) 1,852 exchange transfer Creditors and other payables 3,001 5,705 4,578 4,468 6,539 Employee entitlements 655 772 796 766 743 Income in advance 20 502 483 125 533 Provisions 20 96 116 116 165 Current Lease Incentive Liability - - - 52 52 Derivative financial instruments 1,520 - 1,456 1,103 - 5,216 7,075 7,429 6,630 8,032 Non-current Liabilities Provisions 246 170 150 150 96 Long Term Lease Incentive Liability - - - 249 202 Derivative financial instruments 246 - 177 177 - 492 170 327 576 298 Total Liabilities 5,708 7,245 7,756 7,206 8,330 Net Assets 4,514 12,744 4,096 5,466 6,253
Equity Shareholder's equity 1,805 1,805 1,805 1,805 1,805 Accumulated Comprehensive Revenue and Expense (1,408) 6,295 (1,830) (3,261) (1,409) Foreign Exchange Reserve 4,117 4,644 4,121 6,924 5,858 Total Equity 4,514 12,744 4,096 5,466 6,252
78 79 Tourism New Zealand Annual Report | 2017/2018 Financials
Financials
Independent Auditor’s Report
To the readers of New Zealand Tourism Board and Group’s financial statements and performance information for the year ended 30 June 2018
The Auditor-General is the auditor of Our audit was completed on 5 September 2018. Responsibilities of the auditor for • We obtain an understanding of internal We communicate with the Board members New Zealand Tourism Board (the “Board”) This is the date at which our opinion is expressed. the audit of the financial statements control relevant to the audit in order to design regarding, among other matters, the planned and group (the Group). The Auditor-General The basis for our opinion is explained below. In and the performance information audit procedures that are appropriate in the scope and timing of the audit and significant audit has appointed me, Emma Winsloe, using the circumstances, but not for the purpose of findings, including any significant deficiencies in addition, we outline the responsibilities of the Our objectives are to obtain reasonable expressing an opinion on the effectiveness of internal control that we identify during our audit. staff and resources of Ernst & Young, to carry Board members and our responsibilities relating assurance about whether the financial the Board’s and Group’s internal control. out the audit of the financial statements and to the financial statements and the performance statements and the performance information, Our responsibilities arise from the Public Audit the performance information, of the Board information, we comment on other information, as a whole, are free from material misstatement, • We evaluate the appropriateness Act 2001. and Group on his behalf. and we explain our independence. whether due to fraud or error, and to issue an of accounting policies used and the auditor’s report that includes our opinion. reasonableness of accounting estimates Other information Opinion and related disclosures made by the Board Basis for our opinion Reasonable assurance is a high level of The Board members are responsible for the other members. We have audited: We carried out our audit in accordance with assurance, but is not a guarantee that an audit information. The other information comprises the • the financial statements of the Board and the Auditor-General’s Auditing Standards, carried out in accordance with the Auditor- • We evaluate the appropriateness of the information included on pages 1 to 15, 34 to 53, Group on pages 54 to 77, that comprise which incorporate the Professional and Ethical General’s Auditing Standards will always reported performance information within the and 78 to 79, but does not include the financial the statement of financial position as at 30 Standards and the International Standards detect a material misstatement when it exists. Board’s and Group’s framework for reporting statements and the performance information, its performance. June 2018, the statement of comprehensive on Auditing (New Zealand) issued by the Misstatements are differences or omissions and our auditor’s report thereon. revenue and expenses, statement of changes New Zealand Auditing and Assurance Standards of amounts or disclosures, and can arise from • We conclude on the appropriateness of the use Our opinion on the financial statements and the in equity and statement of cash flows for the Board. Our responsibilities under those standards fraud or error. Misstatements are considered of the going concern basis of accounting by the performance information does not cover the year ended on that date and the notes to the are further described in the Responsibilities of the material if, individually or in the aggregate, Board members and, based on the audit evidence other information and we do not express any form financial statements including a summary of auditor section of our report. they could reasonably be expected to influence obtained, whether a material uncertainty exists of audit opinion or assurance conclusion thereon. related to events or conditions that may cast significant accounting policies; and We have fulfilled our responsibilities in accordance the decisions of readers, taken on the basis In connection with our audit of the financial • the performance information of the Board and with the Auditor-General’s Auditing Standards. of these financial statements and the significant doubt on the Board’s and Group’s statements and the performance information, our ability to continue as a going concern. If we Group on pages 16 to 33. We believe that the audit evidence we have performance information. responsibility is to read the other information. obtained is sufficient and appropriate to provide conclude that a material uncertainty exists, we In our opinion: For the budget information reported in the In doing so, we consider whether the other a basis for our opinion. financial statements and the performance are required to draw attention in our auditor’s information is materially inconsistent with • the financial statements of the Board and information, our procedures were limited report to the related disclosures in the financial the financial statements and the performance Group 54 to 77: Responsibilities of the Board to checking that the information agreed to statements and the performance information or, information or our knowledge obtained in the • present fairly, in all material respects: members for the financial statements the Board’s statement of performance if such disclosures are inadequate, to modify our audit, or otherwise appears to be materially • its financial position as at 30 June 2018; and and the performance information expectations. opinion. Our conclusions are based on the audit misstated. If, based on our work, we conclude evidence obtained up to the date of our auditor’s its financial performance and cash flows that there is a material misstatement of this other • The Board members are responsible on behalf of We did not evaluate the security and report. However, future events or conditions may for the year then ended; and the Board and the Group for preparing financial controls over the electronic publication information, we are required to report that fact. cause the Board and Group to cease to continue We have nothing to report in this regard. • comply with generally accepted accounting statements and performance information that of the financial statements and the as a going concern. practice in New Zealand in accordance with are fairly presented and comply with generally performance information. We evaluate the overall presentation, structure Public Benefit Entity Reporting Standards. accepted accounting practice in New Zealand. • Independence As part of an audit in accordance with the and content of the financial statements and The Board members are responsible for such We are independent of the Board and Group • the performance information on pages 16 to Auditor-General’s Auditing Standards, we the performance information, including internal control as they determine is necessary to in accordance with the independence 33: exercise professional judgement and maintain the disclosures, and whether the financial enable them to prepare financial statements and requirements of the Auditor-General’s Auditing • presents fairly, in all material respects, the professional scepticism throughout the audit. statements and the performance information performance information that are free from material Standards, which incorporate the independence Board’s performance for the year ended 30 Also: represent the underlying transactions misstatement, whether due to fraud or error. requirements of Professional and Ethical Standard June 2018, including: and events in a manner that achieves fair In preparing the financial statements and the • We identify and assess the risks of material 1 (Revised): Code of Ethics for Assurance for each class of reportable outputs: presentation. • performance information, the Board members misstatement of the financial statements Practitioners issued by the New Zealand Auditing • its standards of delivery performance are responsible on behalf of the Board and the and the performance information, whether • We obtain sufficient appropriate audit and Assurance Standards Board. due to fraud or error, design and perform evidence regarding the financial statements achieved as compared with forecasts Group for assessing the Board’s and Group’s Other than the audit, we have no relationship with audit procedures responsive to those risks, and the performance information of the included in the statement of ability to continue as a going concern. The Board or interests in the Board and Group. performance expectations for the members are also responsible for disclosing, and obtain audit evidence that is sufficient entities or business activities within the financial year; and as applicable, matters related to going concern and appropriate to provide a basis for our Board and Group to express an opinion on the • its actual revenue and output expenses and using the going concern basis of accounting, opinion. The risk of not detecting a material consolidated financial statements and the misstatement resulting from fraud is higher as compared with the forecasts included unless there is an intention to merge or to consolidated performance information. We than for one resulting from error, as fraud are responsible for the direction, supervision Emma Winsloe in the statement of performance terminate the activities of the Board and Group, may involve collusion, forgery, intentional and performance of the Board and Group Ernst & Young expectations for the financial year; and or there is no realistic alternative but to do so. omissions, misrepresentations, or the audit. We remain solely responsible for our On behalf of the Auditor-General • complies with generally accepted The Board members’ responsibilities arise from override of internal control. audit opinion. Auckland, New Zealand accounting practice in New Zealand. the Crown Entities Act 2004. 80 81 We see New Zealand as a gift from the gods, and we are simply the guardians of this land for the next generation