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Annual Report G25 Annual Report Tourism New Zealand 2016/2017 Sara Orme 2.64 53,000 million Australian and British visitors followers on during the British and Irish Lions Rugby Tour Facebook 13% more visitors during spring and autumn 10,679 stories generated (estimated value: $227.2 million) 6.3 85 bids million supported through the referrals to tourism Conference Assistance Programme businesses from (estimated value: newzealand.com $164 million) 3.6 million visitors 41 396 million media outlets hosted visits to in 180 visits newzealand.com Miles Holden 40 major trade events 42% increase in premium attended by visitor spend Tourism New Zealand 96% of Kiwis agree or strongly agree that international tourism is good for New Zealand $10.25 6000 billion people surveyed for our partnership campaign with the contributed to the Department of Conservation New Zealand economy by (launching in FY18) international visitors 4,607 100% Pure New Zealand Specialists 181 $3,800 incentive conference average holiday spend bids supported per holiday arrival Adam Bryce Contents 02. Tourism New Zealand — Who We Are 04. Chair and Chief Executive Report 10. Governance 12. Board Members 16. Core Leadership Team 18. Strategic Priorities and Outcomes 29. Statement of Performance 40. Equal Employment Opportunities 45. Financial Statements 50. Notes to the Financial Statements 76. Independent Auditor’s Report 1 London Seoul Beijing* Tokyo New Delhi* Shanghai Guangzhou Mumbai Singapore Jakarta Sydney Tourism New Zealand — Who We Are Tourism New Zealand is the Government organisation responsible for promoting New Zealand to the world and encouraging international visitors to this amazing country. Tourism New Zealand was established in 1991 as a Crown Entity by the New Zealand Tourism Board Act, and since then our staff has worked tirelessly to create award winning campaigns marketing New Zealand as an international visitor destination. Tourism has a major impact on New Zealand’s economy and Tourism New Zealand has an instrumental role in spurring its growth. We are the only Government organisation in New Zealand with the mandate and resources to develop and implement a strategy for international tourism attraction. The cornerstone 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 New Zealand. 2 Tourism New Zealand has 13 offices (two in Los Angeles New Zealand) and around 160 full-time staff Auckland São Paulo Wellington Buenos Aires* A key part of Tourism New Zealand’s successful strategy has been our enduring partnerships with global media partners, influential travel sellers and airlines, high profile celebrities and opinion leaders and New Zealand tourism operators. We provide relevant and up-to-date information for visitors, embracing social media and technology, and ensuring the quality of New Zealand’s tourism product and experience. In addition to our day-to-day operations, Tourism New Zealand owns and operates the quality assurance organisation Qualmark New Zealand, and supports the Visitor Information Network Inc, overseeing more than 80 i-SITE visitor information centres around New Zealand. Tourism New Zealand has 13 offices, we co-locate staff in a further three locations and have around 160 full-time staff members. *Co-location of staff 3 Chair and Chief Executive Report Kerry Prendergast Stephen England-Hall Tourism New Zealand Chair Tourism New Zealand Chief Executive On behalf of the Board and Leadership team, we are Against these top-line results, it was a year of change delighted to present Tourism New Zealand’s Annual for Tourism New Zealand. We expanded our presence Report for the past financial year ending 30 June 2017. into Argentina and began our first full year of trade activity in the Philippines, while also making the A dramatic year of change difficult decision to close our Thailand office and focus our efforts on the rest of South East Asia. We farewelled outgoing chief executive Kevin Bowler The past year has been one of the most dramatic for in October and soon after saw a change in tourism tourism in New Zealand, with record arrivals, further ministers. Then in April we welcomed Stephen growth in holiday spend and solid performance by England-Hall as new chief executive. Tourism New Zealand. It has also seen the industry and government engage in meaningful discussions about Given FY17 was the final year in Tourism New Zealand’s the necessary infrastructure for the future. four-year strategy, we began a significant programme of consultation to develop a new strategy, completing We ended the financial year with total arrivals growing this process in December 2016. The strategy takes 10% to 3.6 million and holiday arrivals at 1.9 million our successes of the past and the challenges we face (up 12%). This puts us ahead of global tourism trends, together and outlines three key priorities for Tourism which show international visitor arrivals grew by 3.9% New Zealand: to widen our measure and targeting of for the 2016 calendar year, and 6% in January-June value; to manage our markets as a strategic investor 2017 (Source: UNWTO World Tourism Barometer). would and to work more closely with others to build While total arrivals were up, total international visitor knowledge and expertise. spend was $10.25 billion, flat against the FY16 result. We began this work through a significant partnership Total holiday spend increased a pleasing 4% to $6.55 with New Zealand’s largest tourism operator, the billion. Department of Conservation (DOC). Under the While the peaking of expenditure was disappointing partnership DOC will use our consumer research and it was not unexpected given the significant growth in international visitor data to develop new products spend seen over recent years. A contributing factor and enhance the visitor experience on the DOC estate. here has been the strength of the New Zealand dollar Research completed with 6000 New Zealanders and against a number of major currencies. Medium and active considerers from Australia, China, the US and long-term forecasts for tourism spend remain positive Germany is now being used to determine which tracks with growth expected from the Asian markets as well will be promoted in a full campaign later this year. and the US and UK. International visitor spending is One of our key objectives for FY17 was to continue forecast to exceed $15 billion a year by 2023, up 52% our work in shifting the seasonal profile of arrivals by from the $10 billion recorded in FY17. 4 investing all marketing funds into promoting New Zealand holidays in the shoulder and off-peak seasons. We are thrilled to see this working with a combined 13.1% increase in spring 2016 and autumn 2017 arrivals against peak summer growth of 8.3%. Our prioritisation of the shoulder seasons continues with the new FY18-21 strategy. A second key objective was to support the Government’s tourism strategy in ensuring all regions benefit from tourism. To support sustainable value growth we launched two new regional dispersal programmes, focused on increasing visitation to regions less visited. To this end we promoted the Wellington, Tasman, Marlborough and Nelson regions to the Chinese market culminating in the launch of the ‘Heart of the Long White Cloud’ video series featuring Chinese influencers alongside our own Al Brown and Sir Richard Taylor. Over the year we received positive feedback from key operators who reported an uplift in Chinese visitors since the campaign began. In January 2017, we launched a pilot campaign with partners Air New Zealand, Facebook, Flight Centre and Northland Inc promoting Northland exclusively to Victoria, Australia. Results of the Northland pilot will become available later in the year and will be used to inform our next stage of regional activity. The three-month campaign followed on from the successful Sydney outdoor marketing campaign in which everything from buses, train stations and motorway overpasses were decked out with our campaign imagery ahead of our annual North Island touring campaign. Australia ended the year on 6.2% total growth and a massive 9.7% growth in holiday arrivals. Total visitor spend from the Australian market remained static year-on-year ($2.5 billion), while the average visitor spend dropped 5% to $1900 per visitor. Again we believe currency rates played a part in this. Of notable significance has been the slow-down seen out of China with holiday visitors to June 2017 down 2.3% on the previous year and average visitor spend reduced 14% to $4100 per visit. Tourism New Zealand has worked hard to target the higher-value Free and Independent Traveller (FIT) and at year end the number of visitors travelling on General Visitor Visas (GVV: independent, FIT travellers) exceeded those travelling on Approved Destination Status Visas (ADS: tours and groups) for the first time with a 58/42% split. In March, New Zealand was named as Destination of the Year by Qyer, China’s major free independent traveller online community with more than 80 million users. It is too early to say if the recent drop in total Chinese visitor numbers is a reaction to peak holiday season pricing or a more sustained shift in market behaviour. Certainly it’s something we monitor closely and we will manage the risk by seeking to grow other markets. Speaking of which, growth out of the USA was outstanding, highlighting the influence of increased connectivity through air capacity. There are now around 45 direct flights a week from the US and this was a major contributor to the 31.2% increase in holiday visitors in FY17. The new carriers with their strong domestic networks have also unlocked new source markets in the US, particularly on the East Coast and Texas.
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