Tourism New Zealand rethinks promos to super rich and super budget travellers

Tuesday, 4 September 2018

Tourism New Zealand has decided to concentrate on British and European backpackers who spend more and stay longer.

A $6m funding cut has forced Tourism New Zealand to rethink the way it tries to attract big spenders and backpackers.

Budget papers released last week said Tourism New Zealand (TNZ) would save $5.9m through the 'exit of all activity to attract high value premium and youth sector visitors.'

TNZ chief executive Stephen England-Hall said that was not correct, and after an internal review they had made the necessary savings without 'exiting' any sectors.

However, he confirmed TNZ had disbanded two 'niche' teams - one covering premium high value visitors and a 'special interest' team promoting backpacking, cycling, skiing and golf.

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TNZ defines high value premium visitors as those who spend upwards of $25,000 on their holiday.

'However, the biggest growth opportunity is those in the ultra-high net worth and very high net worth categories where spending of $50,000 is not extraordinary, ' said England Hall.

TNZ staff in the specialist teams had been absorbed into the general marketing team, allowing more flexibility in how they operated, he said.

TNZ had also saved money by scaling back and being more efficient with media buying, and shooting promotional material suitable for multiple markets.

'We might have done a production shoot for a particular activity that was targeted at China, and we might have done a very similar shoot for Germany with slight nuances. Now we'd look at how we shoot content that suits both,' said England-Hall.

When it came to digital media, the different types of visitors used similar channels.

'There really is no difference between a multi-millionaire's consumption of content online and your average high value customer, they're very similar.'

The number of 18 to 24-year-old backpackers coming here dropped 2.5 per cent last year so the industry is carefully watching the impact of TNZ's new approach to promotions.

TNZ ran a campaign targeting British and German backpackers already in Australia to try and persuade them to add New Zealand to their trip, but visits by these so-called 'transient' backpackers dropped by 23 per cent last year.

England-Hall said that prompted the decision to focus marketing to Brits and Germans at home because those who came here direct, rather than via Australia, stayed 30 days longer than transients, and spent $1000 a head more ($5200 on average).

Simon Cartwright chairs the Backpacker Youth and Adventure Travel Association (BYATA) and he said the move was understandable given that there had been a marked reduction in the number of backpackers going to Australia in recent years following increased visa costs.

'We have to be reasonable and accept that TNZ's budget is not unlimited and our expectation is that they use it where they will get their best bang for their buck. '

The total backpacker market had grown at a slower rate than the general holiday market, and it remained to be seen whether TNZ's new approach would change that, said Cartwright.

'We're just keeping a watching brief and it will be interesting to see how this pans out.'

The football World Cup often had an impact on backpacker numbers, irrespective of where it was held, because a lot of young people travelled to it.

'But more importantly when you look at news footage of the World Cup there are whole towns and city squares full of people watching giant screens.

'They tend to want to say at home for the World Cup, it's not millions, but it's enough for us to feel the pinch.'