Neha Jain: http://newzealandaviationnews.blogspot.com/18

1. The changing face of tourism

PROFILE CHANGE: Tourists Phuong Nguyen and Diep Tran from Hanoi in Vietnam snap some memories of their visit to New Zealand.

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A fortnight ago, an email from Tourism New Zealand dropped into Grant Webster's inbox, trumpeting the record number of international visitors in 2010.

On the face of it, Mr Webster, boss of one of New Zealand's leading campervan companies, Tourism Holdings, would surely be pleased by the headline.

But, having spent the morning explaining to investors that the company had seen a "severe and sudden" drop in advance bookings, is set to lose $4 million in the year to June 30, and was in breach of its banking agreements, it simply added to the list of "please explain" calls from shareholders.

"From our perspective, the timing couldn't have been worse," Mr Webster said.

International visitors are coming to New Zealand in record numbers, but the profile is changing rapidly, possibly fundamentally, and many businesses are feeling it.

Total arrivals are up. Last year, 2,525,044 overseas tourists visited New Zealand, a 2.7 per cent increase.

But record numbers of Chinese visitors and a resurgence in South Koreans came as British tourists, the second-biggest market, fell by more than 9 per cent.

Visitors from Britain are down 20 per cent from the 2006 peak, and with Europe still reeling from the financial crisis, few expect a turnaround soon, although the Rugby World Cup, it is hoped, will help by boosting New Zealand's profile in Europe. Tourists from the United States, typically some of the biggest spenders, were also down.

Marketing agency Tourism New Zealand has responded by shifting resources. In the past financial year its spending in Europe rose 1.2 per cent, compared with an extra 15 per cent in Asia, and it has indicated more will be spent this year in China.

The change in profile, as well as a general trend of thriftiness, cut tourist spending. Although in the year to September 30, tourist arrivals were up 3.8 per cent, the amount spent dropped 5.4 per cent to $5.8 billion, with spending per visit down 9 per cent.

Falling spending reflects the post-global financial crisis world, but the changing visitor profile has broad implications for the industry, because tourists from different countries travel very differently.

In simple terms, where the typical British tourist will come for six weeks or more, hiring a campervan and driving to all corners of the country – spending little each day but distributing that cash widely – most tourists from China visit as part of tour groups, having their hotels, attractions and shops chosen for them, often staying close to the road between Auckland and Rotorua.

Tim Cossar, chief executive of the Tourism Industry Authority, says some tourism operators who had built their business on visitors from the United States and Europe were feeling the pinch.

"Those markets produce a lot of value and you can't just replace those with growth out of Australia and China," he said, adding that there was "a feeling that marketing in established markets needs to be continued".

While the authority welcomes the influx from new markets, it is aware that some of its members are not being helped by it. When Air New Zealand announced it was increasing flights to China, Mr Cossar said in a statement that some parts of his industry "may not feel immediate benefits from increasing Chinese visitor numbers".

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For Tourism Holdings, the trends are hurting. Europeans, its main focus, are coming in smaller numbers, and rivals with more budget offerings are snapping up a lot of what is left.

Mr Webster accepts that the reason is partly economic, but believes it is partly a problem of profile, and that New Zealand had been "just off the boil" in Britain in terms of profile for several years.

"It hasn't had enough impetus, it hasn't had the presence that it really needs."

While targeting China is "fundamentally good" for New Zealand, Mr Webster believes greater investment there should not be at the expense of Europe, where average spending – and the value to the economy – is higher.

"It's easy to focus on visitor arrivals as a key metric, and it is a key metric, but it cannot be the sole metric. You have to look at value within the tourist sector, and the amount of businesses that rely on other markets that aren't just China."

Tourism markets tend to mature, and over time it is hoped more Chinese will come here on independent travel, which spreads spending more widely.

Mr Webster doubts he will hire many campervans to Chinese soon, based on business trips to China.

"They can't grasp the concept of what it is and what that type of travel is. They want to be led, certainly at the moment," Mr Webster said.

What is bad for companies such as Tourism Holdings, could be bad for rural New Zealand, according to Fergus Brown, chief executive of the Holiday Parks Association.

"Tourists who hire campervans are much more likely to go to Gisborne, to Taranaki, to Haast," Mr Webster said. "For somewhere like the West Coast, the impact of lower campervan numbers has really hurt."

ON THE West Coast, overnight stays by international visitors in December were down 18,000, a fall of more than 20 per cent. Beyond simple visitor numbers, Mr Brown said the changing balance could be a net negative for the economy.

"Visitors who stay in holiday parks spend twice as much as the average visitor because they stay so much longer."

Not everyone is feeling the pain, particularly large tourism businesses in the upper North Island. Martin Lobb, managing director of Rotorua's Polynesian Spa, said that while visitors from Britain and the US "are waning", visitors from China and South Korea were up 40 per cent on a year ago, more than offsetting falls elsewhere.

SkyCity is spending $30 million at its flagship Auckland casino targeting high rollers with private gaming rooms and hotel suites of up to 100 square metres.

Already the company pays for flights for wealthy Chinese who think little of spending $500,000 on a gambling trip.

Chief executive Nigel Morrison says the growth of the gaming industry in Macau and Singapore showed the company is just scratching the surface.

"We are such a small player, the pool is so large, theoretically we could grow at 100 per cent each year and in five years' time we would still be a minnow in the scheme of things."

Neville Nicholson, general manager of Rotorua's Skyline Skyrides, says the region had benefited from stronger visitors out of Asia and if the trend continued it may continue to do so.

For those off the main route, however, it could be a lot more difficult.

"Don't rely on the campervans and the free independent travellers. For the regions, it's going to be tough."

Some are growing frustrated. Mike Tamaki, one of the directors of Tamaki Group which runs Maori cultural tours in Rotorua and Christchurch, believes highlighting total visitor numbers is masking a decline in the industry.

A former board member of Tourism New Zealand, Mr Tamaki says few operators are benefiting from the rise in Chinese visitors because they were on highly structured visits.

"They'll have a Maori cultural experience, but they'll do it at a Chinese restaurant."

Mr Tamaki is also dismissive of the growth from Australia, saying that cheap airfares had led to a rise in less affluent Australians.

"Some of them don't even have a licence to drive out of Christchurch ... There's really no contribution to the local economy whatsoever."

Few in the industry deny that Australian tourists, and tourists overall, are spending less.

Shane Vuletich, an economist at Covec, says a growing "long-haul budget" aviation market would benefit New Zealand as a tourism destination in terms of visitor numbers, but it was likely to mean more shorter visits.

"When Jetstar says you can fly from Singapore to Auckland for, whatever it is, a couple of hundred bucks, I don't think you're going to get long-stay, high-value people taking those up."

"They're still going to be good for the industry, there's no doubt about it, but on average they're going to have a lower spend."

Kevin Bowler, who has been chief executive of Tourism New Zealand (TNZ) for a year, said it was clear that Europeans tended to stay longer, travel more widely "and in broad terms, be more valuable to New Zealand". But he doubted whether pumping up investment on marketing campaigns would cause a turnaround in visitors from Britain.

"I do think we are hostage to the UK economic situation to a large degree. Spending millions more on marketing, I don't think is going to have a transformational impact on visitor numbers."

TNZ, which had its budget increased $30 million to $99m in two years, was spending "slightly more" in Europe than it did five years ago, with less focus on Britain and more on Germany, while additional staff and resources were being pumped into China. "I think it's an economic reality that they [European tourists] are going to be harder to acquire and that the Asian visitors are a natural growth."

Whatever the exact value of the Chinese growth, everyone expects it to continue. Tourism Australia predicts that within a few years arrivals from China will more than double to 1m a year.

Mr Bowler predicts the 120,000 Chinese who visited New Zealand in 2010 will rise to 200,000 in a few years. TNZ would focus increasingly on trying to extract value from tourism, including the new growth markets, but he admitted "that doesn't mean you'll get it".

NUMBERS GUIDE

In 2010, the number of tourists from China rose by 20 per cent to 122,712, and additional air capacity is expected to help the number increase to more than 200,000 in a few years, according to Tourism New Zealand.

British tourists, meanwhile, dropped by almost 25,000 to 234,314, a greater fall than the rise from China. Tourists from Britain, who stay longer and spend more than most other markets, are down by 20 per cent from the 2006 peak.

Australian tourists continue to rise, up 3.4 per cent to 1,249,735, making up almost 45 per cent of all visitors. But spending by Australian tourists is falling. In the year to June 30, 2010, the average Australian spent $1547 a trip, a fall of more than $90 per person compared with 2009.

Overall spending by international tourists in the year to September 30, the latest figures available, was down more than 5 per cent, with tourism operators saying the remaining spending is more concentrated on the main tourism destinations, such as Auckland and Rotorua.

2. Freewheeling in New Zealand

Meet ‘Jeffree’ & ‘Freeona’ - two free spirits who’re on the road trip of a lifetime and are putting a new spin on the meaning of freewheeling through New Zealand on holiday.

Jeffree is based in the North Island and Freeona hails from the South but both have a common mission - to give New Zealand visitors a free ride in turn for positive feedback about their Kiwi travel experience.

The two freebies are brand new Toyota Camry Hybrid rental cars - personalised and primed for an innovative marketing campaign by Air New Zealand.

Freeway deal
The cars are on a six-month road trip organised by the airline’s rental car division in a ‘Freeway’ deal that includes free petrol from Shell, and a Garmin-Asus A10 phone from Telecom.

People can register on line to have the use of Jeffree or Freeona for up to seven days in return for documenting and blogging their travel experience on freeway.airnzrentalcars.com.

The nationwide social media/word of mouth campaign has already had great pick up and Jeffree and Freeona have clocked up hundreds of kilometres, visiting well-known New Zealand tourist hot spots and posing for happy snaps with their lucky passengers.

Happy snaps, tracks and maps
The cars’ A10 phones have a mobile application developed specifically for the Freeway campaign and in-car Armada GPS means Jeffree and Freeona’s travels will be tracked and mapped in real time. Happy snaps will also be loaded onto the Air NZ Rental Car website and into various social media channels.

Interested travellers can register on the freeway website and choose where they ideally would like to pick Jeffree or Freeona up from.

As soon as the car is scheduled to arrive in a particular city an email is sent to those registered and the first person to reserve can take the car to any Avis location they choose.

Air NZ says it hopes that at the conclusion of the campaign, Jeffree
and Freeona will have covered the country giving people the chance to experience amazing destinations and inspire others to travel around New Zealand through the unique user-generated content.

Innovative airline
The Freeway campaign is another of Air New Zealand’s innovative campaigns.

'Forget everything you know about flying’ launched in October 2010 promotes the airline’s latest innovations in seats, interiors and service for its new B777-300s and has gained world-wide publicity particularly in relation to the Skycouch - three economy seats that fold down into a bed.

‘Nothing to Hide’ involved Air New Zealand staff presenting the in-flight safety briefing wearing nothing but body paint and at the time had nearly two million hits on YouTube, becoming the most viewed clip ever to come out of New Zealand.

Another successful ad campaign saw Air New Zealand pay people to shave their heads and wear temporary tattoos that said, "Need a change? Head down to New Zealand."

Since then the All Blacks have starred along with an elderly streaker in a rugby-focussed in-flight safety briefing that shows the airline is crazy about the national sport and highlights 2011 as the year New Zealand hosts the Rugby World Cup.

In 2010 Air New Zealand won several awards - it was named the favourite ‘long-haul leisure airline’ in the Condé Nast Readers’ Choice Travel Awards 2010. It also picked up the Air Transport World ‘Airline of the Year’ award (considered the Oscars of the aviation industry), two Skytrax accolades and won ‘Best Airline’ at the 2010 Which? magazine awards.

3. Aviation Law conference set for Sunshine Coast

The 30th annual conference of the Aviation Law Association of Australia and New Zealand will be held in Noosa in April.
This year's ALAANZ conference, entitled Waves of Change, will be held at the Noosa Sheraton from 3 to 5 April.
The Association is committed to developing the practice of law affecting the aviation industry and the exchange of information about aviation laws.
The conference committe has developed a program for the 2011 conference which will provide the latest in aviation law, operations, insurance and claims, with a wide variety of topics and speakers of local and international note.
The keynote speaker who will open the conference is Qantas A380 captain Richard de Crespigny, who was in command the day of that memorable engine disk failure just out of Singapore.
Other speakers will represent CASA, regional aviation, airports, security and insurance, as well as all aspects of the aviation legal arena.

NEHA JAIN

International Airlines Training Expo