Coronavirus: Tourism minister warns high prices could dampen domestic travel

Friday, 8 May 2020

Tourism Minister Kelvin Davis says communities should embrace freedom camping as a positive.

A Tourism New Zealand marketing campaign will try to persuade Kiwis to spend up large on domestic travel, the way they did on overseas trips.

But Tourism Minister Kelvin Davis said operators would also need to come to the party over pricing to attract customers.

“People in tourism want visitors, but if they price themselves out of the market, they simply won't have that.”

Cabinet will decide on Monday whether to open up domestic travel with a move to alert level 2 next week, and Davis said Tourism New Zealand had a “special” campaign planned to change New Zealanders' attitudes to holidaying at home.

According to Stats NZ, New Zealanders spent $6.5b on overseas holidays and business travel last year. Tourism New Zealand is aiming to get them to spend at least some of that money here visiting iconic spots such as the Milford Track.

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A recent Research First survey of 270 New Zealanders showed almost 40 per cent were planning a domestic break within three months of restrictions being lifted, but 60 per cent found the cost of tourism activities off-putting.

Only one in 10 were intending using international flight credits for leisure trips in New Zealand.

TNZ's campaign will attempt to get Kiwis to treat New Zealand like an overseas destination, and open their wallets accordingly.

Davis gave the example of a trip he and his wife made to South Australia last year, staying in hotels, eating out, and visiting vineyards.

“If you compare that with my holidays in New Zealand, which are almost always to my mate's place in Rotorua, where we go to the local supermarket and get groceries, we try to save money, and don't do any of the tourist stuff in Rotorua.”

TNZ chief executive Stephen England-Hall said about four per cent of both domestic and international visitors spending was on activities, and it was important to identify the types of activities New Zealanders preferred.

On a typical Saturday in March the Hobbiton movie set could usually expect up to 2500 visitors. Tourism Industry Aotearoa wants extra Government support for key businesses, such as Hobbiton, that were heavily reliant on the international market. (File photo)

“Kiwis doing a three-day hike will carry all their gear with them, while an international visitor might choose to fly their luggage by helicopter to the hut. It's the same product but how they experience it is different and the price point is different.”

Some in the tourism industry have questioned whether TNZ's international marketing smarts, which spawned the 100 per cent Pure campaign, will work for domestic purposes.

But Davis is confident the agency is the right one to lead the marketing push, rather than handing large sums to the 30 regional tourism organisations and have them all scrambling for the same pool of domestic business.

“It can't just be a free for all.”

He said there needed to be a carefully coordinated approach to promotions, especially since some were less enthusiastic about an influx of visitors under Covid-19.

“There are some regions that want to open up as soon as possible, and there are some in some regions wanting to take a more conservative approach and prevent people from coming to their specific region.

“These issues have to be worked through on a local level and a health level.'

In recent weeks Davis has attended Zoom meetings with just over 5000 tourism industry representatives, and TNZ has surveyed 10,500, many of them with businesses listed on its newzealand.com website.

Of those that responded, 80 per cent said they could change their business to cater for the domestic market and the remainder said they would need assistance to do that.

“Helping businesses adjust is something we need to look at,” said Davis.

Tourism organisations have lobbied hard for further targeted assistance, and Davis is tight-lipped on what that might look like, saying Cabinet was acutely aware of the impact of Covid-19 on tourism.

“We hear what they're saying, there's a Budget coming up and final decisions are yet to be made.”

Tourism Industry Aotearoa chief executive Chris Roberts wants some of the more than $56m gathered via the international visitor levy (IVL) spent on saving key attractions that relied on overseas visitors.

Income from the $35 ahead IVL was to be split between conservation and tourism infrastructure, and Davis and Conservation Minister Eugenie Sage announced some weeks ago they were rethinking investment plans.

Davis said they had not discussed the issue since, and Roberts is keen that they do so, arguing that businesses are part of tourism infrastructure.

“A case can be made to use that money to ensure we have a viable tourism sector left.

“Keeping it and spending it on some future date on some nice new public infrastructure wouldn't be of great value if no tourism businesses are left by that stage.”