Inside New Zealand tourism’s annual jamboree

Wednesday, 15 May 2024

Tourism is back, set to boom, and the local industry is in a state of transformation to better cater to the demands of the post-Covid world.

That was the overarching message delivered over a whirlwind few days at New Zealand tourism’s annual jamboree, Trenz, last week in Wellington.

The transformation ranges from Air New Zealand’s drive to become the world’s leading digital airline, along with the first major upgrade of its seating in over 20 years, to Auckland airport’s extensive upgrade, to the rise of regenerative tourism.

With the drive to change came a clear sense of purpose and optimism, which comes off the back of a strong summer for the industry. International visitor numbers over the three months to February were at 87% of those over the 2019-2020 summer, according to Tourism NZ.

It made for an upbeat atmosphere at the Tākina Convention Centre, where over 1000 delegates from 25 countries gathered to buy and sell tourism-related products and services, network and trade ideas and learning.

Prime Minister Christoper Luxon set the tone at the welcome function, with an opening speech full of praise for the industry and the people in it, who he described as “simply the best”.

It was not so long ago that he was in their shoes when heading Air New Zealand, he said.

“Those in tourism are ambassadors for New Zealand on the world stage. New Zealand has the best scenery in the world, and great experiences, but when visitors leave it is their perceptions of, and connections to Kiwis that make their trip special.”

Tourism did it tough over the Covid years, and it was good to see it recovering well, but it was still not back to full strength, he said.

“As a new government we are determined to rebuild its place in our economy, and reinvigorate it. Demand for New Zealand is still out there, people are desperate to come here, and we have to reconnect to the world.”

Tourism will play a massive part in growing the economy, and promoting the country, and his government proudly backs the industry, he said.

The energy of the opening event, which also featured performances by Hiwa Performance Creative and Pacific Connection Choir and showcased Wellington food, flowed through the subsequent days.

Jeff, a larger-than-life, AI driven model by Wētā Workshop, was on hand to chat to attendees; the likes of Air New Zealand and Bluebridge Ferries provided fuel via coffee, smoothies, and snacks; and the exhibition halls were a hive of activity.

At the same time, a series of tourism leaders shared insights into the changing industry, and how their operations were adapting to reflect, and improve it.

Here are the four key takeaways from the event.

In recovery, but scope for growth

The figures behind tourism’s ongoing recovery, and its accompanying mood, are solid, but also reveal scope for further growth.

Before the pandemic, tourism was New Zealand's largest export earner, generating $41.4 billion annually and accounting for 9.1% of the economy.

That fell to $26.6b, and just 5.1% of the economy in the year to March 2022, tourism satellite figures show.

Tourism Industry Aotearoa chief executive Rebecca Ingram said the industry’s contribution to the economy was rebuilding strongly, with MBIE’s International Visitor Survey for December putting international visitor spending at $9.9b.

“The Tourism Satellite Account shows that by March 2023, tourism was already directly and indirectly contributing 6.2%, or $22b, of GDP, and visitor spending was creating $3.5b in GST.”

Since then, it had recovered further and the industry was working to restore its position alongside dairy as the country’s largest export earning sectors, she said.

“At an individual business level, the feedback is that this summer exceeded most operators’ expectations. The golden weather has helped, and some operators reported being rushed off their feet.”

But it was important not to take the summer’s success for granted and to build on the momentum to grow the market, she said.

An industry evolving

This year the Trenz theme was transformative tourism, as Ingram said it “has the capacity to transform our economy, our communities, our visitors, and even our environment”.

But the conference highlighted the ways in which the local industry is itself transforming.

Air New Zealand chief Greg Foran said the airline was making changes to become the world’s leading digital airline.

They range from the screens now used to speed up the check in process, to switching from flight planning on paper to digital, to making use of new systems to boost operational efficiency.

It was all about improving customer outcomes, he said.

“By 2026, 80% of information will be in the cloud, and that will enable us to make better use of technology like AI to provide better experiences in areas like food and in our call centres.”

To that end, the airline was spending $50 million this year and next, and $40m the year after to improve its services in areas such as pallet loading, he said.

It was updating its old airpoints system to a state of the art platform, rolling out its retrofit of new seating, which includes world-first lie flat options such as the Skynest, and trialling cargo-only electric planes and domestic WiFi.

“In the next 20 years, we will see more changes in aviation than in the last 50 years,” he said. “But it is a challenging environment around costs, and we do not expect to see prices coming down on a normalised basis.”

Auckland International Airport is also set for change, with a huge infrastructure investment programme planned for the next 10 years.

It will include the integration of a new domestic terminal into the international terminal, essential runway upgrades, and a new transport hub.

The airport’s chief executive, Carrie Hurihanganui, said the upgrades would provide 44% more passenger capacity, and make the airport easier to navigate.

“It is about building the gateway New Zealand needs to remain fit for the future and provide a better travel experience for customers.”

Navigating industry challenges

Tougher economic times, and the potential impact on discretionary spending, are challenging for the industry, but it has some specific issues that it wants to address.

Tourism NZ chief executive René de Monchy pointed to seasonality as one, as about 40% of the industry’s annual value capture comes over the summer months.

Many offerings were under-utilised outside of the summer season, while businesses often lost staff and resources as they scaled up and down in response.

Effectively tackling this issue represented opportunities too as it would create a bigger off-peak market, and one with greater regional diversity, he said.

“If the industry can do that it will help grow its scale, and also help boost the productivity of New Zealand.”

Tourism NZ is focused on marketing competitively to established markets, such as Australia, China and the United States, and exploring emerging markets, particularly India, as part of that, he said.

Another issue is funding. The previous government cut Tourism NZ’s budget, although the cut is not due to kick in for another two years, but the industry has long called for better provision and allocation of funding.

Oft-suggested options include an increase to the international visitor levy, a departure tax, bed taxes, or some sort of conservation dividend, with a national strategy in support.

Tourism Minister Matt Doocey said he had heard the call from the industry for more funding, and nothing was off the table.

He said the international visitors levy was up for review and the government would be consulting on it, and that he was interested to hear industry views around accommodation levies.

“The government wants to hear the industry’s issues, and to create an environment to help businesses to flourish and be a pragmatic part of solutions.”

Despite the words of support, he did not make any funding commitments, and would not be drawn on what the Budget might hold for the industry.

Environment on the agenda

One slightly sour note intruded on the upbeat atmosphere. It came on Thursday when a small group of environmental protesters attempted to disrupt proceedings with accusations of “greenwashing”.

The protesters, from Climate Liberation Aotearoa, claimed the tourism industry had been “silent” on international shipping and aviation emissions, and was “ignoring the fact that as tourism numbers go up, emissions go up”.

But Ingram said the industry was not blind to the fact it was intertwined with the environment, and it takes its responsibilities seriously.

“Proof of that can be seen in the fact that 1900 tourism businesses are signatories to the Tourism Sustainability Commitment, and 92% of them are committed to advancing sustainability.”

It was a key focus for the industry as it was the future of tourism, she said. “It’s the right thing to do, but it’s also about ensuring we remain a competitive destination, and it makes financial sense.”

Trenz also saw the TIA launch a new online programme, Akiaki – Advancing Tourism, to support operators to develop comprehensive sustainability plans for their businesses.

A series of speakers talked about what their operations are doing to contribute to a more sustainable form of tourism for the future.

Christchurch Airport chief executive Justin Watson said the airport has been on a sustainability journey for 15 years, and its scope one and two emissions are now only 6%,

It was now one of only 10 airports in the world, and the only one in the southern hemisphere, to have achieved AC1 level five carbon accreditation, he said.

“We have not finished our journey in that space. The entire industry faces challenges so we have open sourced everything we do to share, and we now mentor about 15 airports around the world on this.”

For aviation, the future lay in sustainable aviation fuels, particularly for long haul travel, and in electric planes and green hydrogen for domestic travel, he said.

As part of the drive towards renewable energy, the airport is building New Zealand’s largest solar plant farm, Kowhai Park, and has a zero target for scope three emissions by 2050.

Regenerative tourism was also on show in presentations from Wellington eco-sanctuary Zealandia; Discover Waitomo, which offers glowworm cave tours and blackwater rafting; and Kohutapu Lodge & Tribal Tours, which runs community engagement and cultural exchange programmes.

– Miriam Bell travelled to Wellington to Trenz courtesy of Tourism Industry Aotearoa.