NEW ZEALAND Market Profile. $ bn Potential to be worth by ,241,000. $2.4bn. 15.0m. Overview

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1 Market Profile Overview In 2014, New Zealand was Australia s largest inbound market for visitor arrivals, fourth largest market for total visitor expenditure and third for visitor nights. Findings from Tourism Australia s Consumer Demand Project indicate that New Zealand leisure travellers look for (in order of importance) safety and security, value for money and interesting attractions when choosing a holiday destination. Australia s coastline and the Great Barrier Reef generate the greatest appeal, with shopping rating as the most preferred Australian experience. Aviation routes from New Zealand to Australia 3 Cairns $ bn Potential to be worth by ,241,000 1 Visitor arrivals (á 4 per cent) $2.4bn 2 Total spend (á 6 per cent) Perth Adelaide Melbourne Sunshine Coast Brisbane Gold Coast Sydney Which airlines 3 do New Zealand visitors use to travel to Australia? Queenstown Dunedin Auckland Hamilton Rotorua Wellington Christchurch 4 Airline Air New Zealand 48% 50% 48% 47% 46% Virgin Australia 15% 14% 18% 17% 18% Qantas Airways 15% 14% 14% 15% 13% Jetstar 8% 8% 8% 7% 8% Emirates 8% 8% 8% 8% 8% Others 5% 5% 5% 5% 7% Total 100% 100% 100% 100% 100% 15.0m 2 Visitor nights (â 1 per cent) Apr-Aug Booking peak period Feb-May and Sep-Nov Travel peak period Override Show 1. Source: Department of Immigration and Border Protection as at year ending December Source: International Visitor Survey, Tourism Research Australia, December 2014 quarter 3. Source: CAPA-Centre for Aviation, Tourism Australia analysis 4. Table includes direct and indirect capacity. Source: Department of Immigration and Border Protection 1 Visitor profile 2 HOLIDAY VISITING FRIENDS AND RELATIVES BUSINESS 416,000 arrivals (39%*) 353,900 arrivals (33%*) 206,300 arrivals (19%*) $2,237 spend per trip $1,458 spend per trip $1,973 spend per trip $185 spend per night $118 spend per night $266 spend per night 92% repeat visitors 94% repeat visitors 96% repeat visitors Data refers to an average of * Refers to share of arrivals of respective purpose of visit 1 NEW ZEALAND Market Profile 2015

2 Market Performance The charts on this page provide a trend overview of visitor arrivals and expenditure by main purpose of visit and also the age demographic split of leisure* visitors and expenditure (based on latest 12 months data). Visitor arrivals Visitor arrivals by main purpose of visit Visitor arrivals (000s) 1,300 1,250 1,200 1,150 1,100 1,050 1, ,241,000 Visitor arrivals (000s) Holiday Visiting friends or relatives Business Employment Other Education Visitor expenditure Visitor expenditure by main purpose of visit Total trip spend ($bn) $2.4bn Total trip spend (A$000s) 1,200 1, Holiday Visiting friends or relatives Business Employment Education Other Arrivals by age Expenditure by age 60 yrs & over 23% 60 yrs & over 22% yrs 31% yrs 21% yrs 30% yrs 24% yrs 25% yrs 24% * Leisure refers to main purpose of visit of holiday and visiting friends and relatives Age profile data refers to an average of Source: Department of Immigration and Border Protection International Visitor Survey, Tourism Research Australia 2 NEW ZEALAND Market Profile 2015

3 Aviation Landscape The trans-tasman route remains Australia s busiest international route in terms of direct capacity and frequency. The majority of the New Zealand traffic to Australia originates from Auckland, Christchurch and Wellington. There is aggressive price competition on trans-tasman routes as well as flights to competitor destinations. Competition stiulates cheaper fares but also impacts yield and dispersal. New direct routes to competitor destinations are impacting Australia s market share. Almost half of New Zealand visitors to Australia travelled on Air New Zealand, followed by Virgin Australia (18 per cent) and Qantas (13 per cent) (see chart page 1). In the last two years a number of new route have been launched on the trans-tasman such as Christchurch- Perth, Auckland-Sunshine Coast and Auckland-Perth. In 2014 direct capacity from New Zealand to Australia increased by three per cent following similar growth in previous years. Growth was driven by Jetstar, Emirates, Virgin Australia and Air New Zealand. Tourism Australia expects growth similar growth in Average loads during 2014 were 79 per cent, up two percentage points compared to Average loads are softer compared to other inbound market but they are largely manageable given the limited seasonality of traffic flows on the route. Alliances continue to develop the market and strengthen existing services (e.g. Qantas/Emirates/Jetstar and Air New Zealand/Virgin Australia). These alliances are also improving access to regional Australia. The proposed simplification of the trans-tasman border (e.g. customs and immigration processes) has the potential to reduce journey time and airfare taxes. In addition this may encourage the opening of new routes such as Canberra and Newcastle. Discussions continue between the Australian and New Zealand Governments. Direct aviation capacity from New Zealand to Australia Capacity (000) 1,600 1,400 1,200 1, Air New Zealand Qantas Airways Virgin Australia Emirates Seat 600 Jetstar 400 China Airlines 200 Freedom Air 0 Dec-04 Other airlines Source: Bureau of Infrastructure and Regional Development 3 NEW ZEALAND Market Profile 2015

4 The Leisure Traveller New Zealand is Australia s largest market for leisure visitor arrivals, ranking third with respect to both visitor expenditure and nights. How does Australia perform? According to consumer research conducted by Tourism Australia, approximately half of New Zealand leisure travellers cite safety and security and value for money as their main motivations when selecting a travel destination. Other important factors for them include interesting attractions, good food and wine and friendly citizens. Australia performs strongly in terms of its safety and security, world class beauty and interesting attractions among New Zealand leisure travellers. There is room for improvement with respect to Australia s associations with rich history and heritage. Australia s coastline and Great Barrier Reef generate the greatest appeal for New Zealand travellers in terms of attractions, with shopping rating as the preferred Australian experience for just under half of New Zealand respondents. Motivations when selecting a travel destination A safe and secure destination 56% Value for money 50% Interesting attractions to visit 48% Good food and wine 31% Friendly and open citizens 31% Rich history and heritage 30% World class beauty and nature 25% A family friendly destination 24% Quality accommodation 22% Great beaches 15% Top Australian attractions Australian beaches 46% Travelling to many places 46% The Great Barrier Reef 44% Australian food and wine 43% The Australian climate 42% The Australian wildlife 41% Rainforests/forests 41% Unspoilt natural wilderness 38% Australian coastal lifestyle 36% The major Australian cities 35% Most preferred Australian experiences Shopping 46% Aquatic Wildlife 43% Wilderness/Rainforest 42% Food and Wine 42% Wildlife (non-aquatic) 41% Beach/Coastal/Harbour 39% City Experience 38% Outback/Indigenous 37% Niche: Diving, Golf etc 20% Aspiration versus visitation For New Zealand travellers, Australia is the clear leader across all purchase funnel metrics from aspiration to visitation. The USA, Fiji and the UK are consistent, but distant competitors, all converting strong funnel metrics into visitation. ASPIRATION AWARENESS INTENTION VISITATION These findings are based on consumer research conducted by Tourism Australia in 2014, in 11 of Australia s key tourism markets. Charts show the percentage of people in the survey who rank these attributes as important or appealing. 4 NEW ZEALAND Market Profile 2015

5 The New Zealand distribution system continues to evolve as online bookings for short haul travel grow. In response, traditional distributors are increasing their online capabilities. Bookings to Australia are primarily driven by low airfares and short/sharp sales, leading to a trend where consumers book airfares first and ground components later, rather than traditional package tours. system Wholesalers/ Large Agents Commission Level: 20% to 25% New Zealand has three major wholesalers which work in alliance with the retail travel chains. They are House of Travel, Go Holidays (Stella Group including United and Harvey World Travel) and Infinity Holidays (Flight Centre Group). There are also smaller and more specialised wholesalers in the New Zealand market such as AIM Holidays, Lifestyle Holidays and Air New Zealand Holidays. Whilst there are preferred arrangements in place, wholesalers are open to deal with any retail agencies (with the exception of Infinity Holidays). Special Interest Operators who specialise in niche segments, such as events and sports travel, include The Experience Group, Williment Sports Travel and Showbiz Events & Travel. Two wholesalers, Go Holidays and House of Travel, also market sports and special interest events. Retail Agents Commission Level: 10% to 12% There are approximately 400 listed retail travel agencies employing over 3,000 travel consultants in New Zealand. The main listed retail brands are as follows: > > Flight Centre with over 122 Flight Centre stores, 45 Travel Brokers, 11 CruiseAbouts, 5 Student Flights, and 2 Travel Associates > > House of Travel with 72 retail stores and 8 Orbit corporate travel stores > > World Travellers with 27 offices > > United Travel with 67 branded and non-branded retail stores > > Harvey World Travel with 55 retail stores > > First Travel Group with 36 nonbranded affiliated agencies are the exclusive partner of Virtuoso in New Zealand > > Mondo with 17 Mondo, Mondo Travel Connect, Mondo Business Travel agencies > > Travel Managers organisation has 150 travel brokers > > Air New Zealand Holidays with 26 agencies > > Travel Smart with 10 branded and non-branded agencies, and > > The Travel Brokers organisation has over 110 travel brokers. Online Commission Level: 10% to 12%»» Key travel websites include Air New Zealand, Qantas, Virgin Australia, Webjet, Wotif, Expedia, Harvey World Travel, and House of Travel. 5 NEW ZEALAND Market Profile 2015

6 Trends With over 50 per cent of New Zealanders booking travel to Australia online, traditional retail groups and airlines are increasing their online booking capability to meet demand. International airline services operate regularly from Auckland, Wellington and Christchurch. Limited services are available from the South Island centres of Queenstown and Dunedin, and the North Island centres of Hamilton and Rotorua. Aggressively priced trans-tasman airfares (particularly for the East Coast) position Australia as a very accessible travel destination for New Zealand consumers. Planning and purchasing travel More than 50 per cent of New Zealanders are now purchasing airfares online. Ground portions are being purchased either online (directly to product) or through retail agencies particularly for complex or regional itineraries. Many consumers use internet travel websites to research their holidays. However, traditional distribution channels remain a key source of information on holiday destinations and products Planning a visit to market Top tips for sales calls It is preferable to make regular sales visits each year to the New Zealand market. Sales calls can be made throughout the year, however avoid December and January as this is the summer holiday season. A consistent market presence through advertising and wholesale or retail activity for two or more years will help to build New Zealand industry relationships and achieve a greater return. The key market centres to visit are Auckland, Wellington and Christchurch. Key regional centres to visit are Hamilton, Tauranga, Nelson, Dunedin and Queenstown.»» For more general information on sales calls and planning a visit to market, please see Tourism Australia s Planning for Inbound Success ebook at inboundsuccess. 6 NEW ZEALAND Market Profile 2015

7 Business Events New Zealand is the largest inbound conference and incentive market for Australia. The lead time for travel planning has traditionally been 12 to 18 months, though more recent trends show this is shortening to around three to six months. There are a number of business events specialists in this sector, from boutique incentive houses, corporate travel agents and professional conference organisers throughout New Zealand. The Pacific Area Incentive and Conference Expo (PAICE) is the key trade show to showcase Australian conference and incentive product. Held annually in November in Auckland, more than 150 conference and incentive planners attend this one-day show to meet and learn more about Australian products on offer for their clients. Information about this event can be found at Event planners have a very good knowledge of Australia as a destination and are therefore looking for more detailed information on program inclusions and new product information. They are also keen to challenge the status quo in terms of ideas and the Australian industry needs to tailor their communications to suit this requirement now more than ever. Due to their mature knowledge Australia, event planners in New Zealand are more likely to organise programs in Australia directly with suppliers rather than using a DMC. Key trade and consumer events in 2015 and 2016 Event Location Date PAICE Auckland, NZ 18 November 2015 State Tourism Organisation Road Shows & Workshops Various Various throughout 15/16 Dreamtime Adelaide, South Australia 6-12 December 2015 Australian Tourism Exchange (ATE) Gold Coast, Australia May 2016 (TBC) Where to find more information Tourism Australia s activities in New Zealand are managed from its Auckland office. For more information visit Tourism Australia s corporate website at Australian State and Territory Tourism Offices operating in New Zealand include: Destination NSW, the South Australian Tourism Commission, Tourism and Events Queensland, Tourism Victoria and Tourism Western Australia. Also see: NZ Country Brief published by the Department of Foreign Affairs and Trade at: For the latest arrivals statistics, visit: For the latest International Visitor Survey statistics, visit: 7 NEW ZEALAND Market Profile 2015