Tourism New Zealand Commerce Committee Annual Review

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1 Tourism New Zealand Commerce Committee Annual Review 2013/14 ADDITIONAL QUESTIONS ( )

2 Tourism New Zealand Commerce Committee Annual Review /14 Additional Questions: The Committee notes the expansion of Tourism NZ following the increase in Crown funding. What evaluation has been undertaken, or is planned, to assess how well the organisational changes put in place have worked in practice? TNZ employs a range of tools to evaluate the effectiveness of its performance using both external and internal data sources. This information is used to update TNZ s governing Board and the Minister of Tourism on the value of the increased funding. To evaluate the impact of recent organisational change in core and emerging markets, TNZ makes use of the International Visitor Arrivals, International Visitor Survey, Domestic Travel Survey, Commercial Accommodation Monitor and Tourism Satellite Account (Tourism related expenditure and employment), as well as the Visitor Experience Monitor and 'Active Considerers' research. This information is supplemented by analysis of digital media tracking which provides evidence of uptake and activity of TNZ s digital platform building preference, and PR value tracking which provides evidence of the reach and equivalent advertising value of promotional activity. TNZ s recent investment in the areas of Premium (High Net Worth Individuals), is evaluated using specific data sources, including luxury lodge visitor revenue, super yacht and jet visits, sales data from a selection of New Zealand agents arranging & booking itineraries for High Net Worth Individuals and the value of TNZ generated advertising and content in premium publications (such as the Robb Report and Monocle). The organisation s performance in the area of Business Events and Special Interests is reviewed by assessing the number and value of conferences and incentive groups secured and visitor responses to the Visitor Experience Monitor What are the main organisational challenges facing Tourism NZ and how are these being managed? As a result of increased funding and specific new areas of output identified for the organisation, TNZ allocated greater investment and prioritisation in the areas of emerging markets, business events, premium, special interest and the support thereof. To deliver in these diverse areas, TNZ needed to raise capacity of its workforce and add new skills. As a result, the total number of employees increased from full time equivalents, as at 1 July 2013 to full time equivalents as at 1 July 2014, including 17 ethnicities working in 15 offices across 12 countries. Growth at this rate created challenges in terms of induction, training and cultural integration. TNZ managed this challenge by using a number of different strategies to support and upskill new staff. TNZ is seeing the benefits of those efforts with engagement of TNZ staff at 78%, retention at 84% (13.6% employee initiated turnover) as at 31 December 2014, and strong visitor performance across all markets and segments. TNZ continues to promote a Global Whanau, with a robust internal communications strategy that keeps staff informed and engaged using tools such as staff forums, training, a Global Community Committee, active intranet, and deployment of technology such as video conferencing facilities, desk-top messaging and video calling.

3 130. What are the major organisational development priorities for 2014/15, and how are these progressing? The major organisational development priorities for 2014/15 are focusing on our organisation values, maintaining employee engagement, employee development, and building capability in health and safety management. a) All employees were involved in the development of the organisation values. Our values define how we work together to achieve our vision and mission. They are: Global Whanau, Actions Speak Louder and Unwavering Belief in New Zealand. We have continued to align our people processes and practices with the values and champion initiatives which highlight values behaviours. We are progressing well on this programme as indicated in feedback assessments. b) Employee engagement is priority. With an increase in the number of new roles and employees to the organisation we are continuing to focus on Global Whanau and specifically ensuring that our newest employees are engaged and inducted to the organisation and their roles so that they are able to participate fully in the organisation as soon as possible. Additionally, we are continuing to ensure our employees are valued and recognised through our Whetu (star) recognition programme which was introduced in Both formal and informal recognition practices are being well adopted. c) Employee development continues to be a focus. A framework for development has been established and two programmes have been defined and implemented to accelerate personal potential. These programmes are now in their second year. A number of programme participants have progressed into more senior roles in the past year. d) Our health and safety programme of work has focused specifically on managing risk to ensure that our staff and hosted guests remain safe. Significant developments have been undertaken in this area to advance our processes, practices and provide employees with the tools and skills to manage health and safety risks What assessment is planned to measure the impact of the additional funding on growing the value of international visitors to New Zealand? Please refer to Question Please brief the Committee on trends in Tourism NZ s operating environment, especially any significant developments since the SOI was published. Have these developments resulted in any update of the current three-year marketing strategy, or is any update planned for the remaining half-life of this strategy? What work has been undertaken (or is planned) to prepare a new strategy for the period after expiry of the current strategy? The current Statement of Intent continues to represent a valid representation of the organisations strategic intentions. However, to ensure TNZ s activity is responsive to its operating environment, every year TNZ undertakes a detailed planning exercise to identify changes in its operating environment and where activity should be focused. The output of this exercise is the Statement of Performance Expectations (SPE) agreed between TNZ and the Minister of Tourism. This year TNZ s SPE will address a number of changes in its operating environment, as identified below: Seasonal Capacity demand during the peak season is significantly impacting on accommodation capacity and the industry s access to staff. TNZ is responding by

4 redirecting a large proportion of its activity to promote shoulder season travel periods (Spring and Autumn). Christchurch delays in the rebuild of accommodation infrastructure in and around Christchurch is limiting the extent to which Christchurch is able to offer an attractive proposition and as a result is affecting visitation into many parts of the South Island (not an issue for Queenstown). Foreign Drivers Greater numbers of free independent travellers is contributing to greater number of foreign drivers on NZ roads. Their lack of familiarity with local road conditions is being linked to the number of crashes involving tourists. TNZ is working collaboratively with private and public sector agencies to find ways to mitigate the risk of tourists causing crashes on NZ roads. Conference facilities proposed new conference facilities in Auckland, Wellington, Christchurch and Queenstown have all been delayed. TNZ s focus will be on attracting smaller conferences that can be accommodated at current venues (limited to a maximum of 1,500 people per event). Growing the Chinese market TNZ continues to work with industry to ensure readiness for a greater volume of independent Chinese travellers as a result of a growing Chinese middle class who are looking for greater freedom and an authentic New Zealand experience. Social media the influence of social media as a means of growing preference amongst people in our target markets has significantly increased, particularly in China. TNZ has redirected much of its marketing toward the use of influencers and into media that can be finely targeted The Committee notes that Tourism NZ monitors media attention on New Zealand s environmental performance and on its reputation as a safe place to visit. How does Tourism NZ measure the impact of adverse publicity of events and issues (such as the recent publication of the Climate Change Performance Index and the recent publicity on tourist road accidents) on perceptions of New Zealand s attractiveness as a tourist destination, and what trends have been identified? What were the principal actions taken during 2013/14 to mitigate the risk arising from any unfavourable media attention on New Zealand s environmental performance and on tourist safety, and how was the success of these actions assessed? Tourism New Zealand s Active Considerer Monitor is research conducted in market with our target audience the Active Considerer: people who already have New Zealand in the top two on their list of preferred future holiday destinations; are aged over 18 and are willing to spend a minimum set amount on their holiday here. Research asks consumers about their association of New Zealand against key attributes the three of relevance are Clean and Unpolluted, Landscapes and Scenery, Safe Destination. While the data shifts over time, the overall trend is positive and dips seen in were recovered in There was no requirement to take action in 2013/14 beyond our normal work that tells the story of 100% Pure New Zealand and how the people, activities and landscapes combine to deliver a 100% Pure New Zealand experience. However, an action plan has been developed 1 In 2013 a recall of products sold by Fonterra was announced after suspected botulism-causing bacteria were found. China, which imports most of its powdered milk from New Zealand, instituted a temporary ban on the import of the ingredient from New Zealand which is likely to have contributed to the decline in Active Considerer results from China during this period.

5 for targeting visiting drivers, with new trade training modules and the production of a safer driving video in development Please provide copies of reports which you referred to during the hearing relating to New Zealand s environmental reputation and how it rates with, and impacts on, visitors. Data from the Active Considerer Monitor for the three attributes Clean and Unpolluted, Landscapes and Scenery, Safe Destination across Australia, China, USA, UK, Germany and Japan is below

6

7 In addition, the Visitor Experience Monitor, asks recent visitors to rate their satisfaction of key aspects from One of these aspects is the New Zealand environment, made up of a number of different factors. The slide below shows FY11 and FY12 data. It shows that visitors rated New Zealand s natural environment a 9.3 up on the previous years 9.0; and open spaces at 9.1, up on 8.9 the previous year /summary/ The methodology for this research changed recently with data collected via the International Visitor Survey. Satisfaction with the Natural and Built Environment for the 18 months to December 2014 is shown in the table below with an average 9/10.

8 Table: NZ's Natural and Built Environment Database - IVS Online Base: 18 Months Dec 14 (18 Months to Dec 14) NZ's Natural and Built Environment Total Total (Autobase) Row % % 10 Extremely Satisfied 45.9% % % 7 6.9% 6 1.6% 5 1.2% 4 0.2% 3 0.1% 2 0.0% 1 Not At All Satisfied 0.1% Don't Know 0.9% Average -

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