Tourists flock back

By Libby Middlebrook

Twelve months ago there were more swans lining up to take a paddle in Martin Lobb's swimming pool than people.

His Rotorua thermal pool business - Polynesian Spa - lost more than 20 per cent of its customers virtually overnight after the Asian economy flunked out.

But this month you will find a lot more bodies wobbling in the steamy waters of the spa.

Thousands of travellers have arrived Down Under during the last three months and the tourism industry has flipped a gold tiddly-wink.

"The whole industry's seeing good profits and the prospects are looking really good," says Glenys Coughlan, chief executive of the Tourism Association.

Record numbers of international tourists have poured into the country since September. Last month there were 132,920 visitors, up 9 per cent compared with the same time last year.

The industry is expected to chalk up 11/2 million visitors for the year and next year should be bigger with the impact of the America's Cup and the Sydney Olympics.

"Everyone seems to be benefiting. The big events have really helped to boost the profile of New Zealand and I honestly think that's having an effect on the whole industry from adventure operators to accommodation," Glenys Coughlan says.

The going is good but still short of the industry's over-optimistic forecasts made a decade ago of three million tourists by 2001. Two million early in the new century looks more like an achievable target.

Mr Lobb, managing director of Polynesian Spa, who has just returned from a marketing and sales trip to Asia, is confident the growth is there.

"We're certainly not back to where we were before by a long chalk but it's certainly up 200 to 300 per cent on last year. The next couple of years are looking really good."

Small tourist operators are benefiting too.

Howard Reti, director of Kii Culture, a tiny Maori culture and adventure tour company based near Whangarei, has hired two extra staff and overseen the construction of a new information centre to keep up with a 10 per cent rise in visitor numbers.

Waiheke Island company Ross Adventures has hundreds more takers than this time last year.

Mega events such as the America's Cup, Apec, and the publicity associated with New Zealand being the first country to welcome the new millennium, are obvious reasons for a resurgence in the tourist trickle.

However, the Tourism Board's marketing campaign deserves some credit.

New Zealand's first global advertising campaign, "100% Pure New Zealand," was launched in August flaunting our clean green countryside around the world via television, radio, print and billboard advertising.

While Australia remains the largest source of visitors to New Zealand with more than 100,000 crossing the Tasman each year, the industry has seen strong growth in Asia, North America and Europe during the last three months.

"You can only measure its success by the number of people coming here," says Tourism Board chief executive George Hickton.

"Now the challenge is to maintain the growth momentum."

Richard Wilson, general manager of Tourism Holdings' great sights division, which operates Waitomo Caves, concedes the promotion is having a positive effect on visitor numbers, combined with the independent advertising activity of tourism companies.

It is difficult to exaggerate the tourism industry's importance to the economy.

It accounts for one in 12 jobs and is one of the country's largest foreign exchange earners, generating more than $3.7 billion to the year ended September (excluding airfares) - slightly below the dairy industry's $4.8 billion contribution.

Domestic tourism contributes at least $4.8 billion to the economy and the Government earns more than $470 million in GST from the tourism sector each year.

The Government contributes $55 million to the industry's international marketing campaign each year.

Despite the Government's contribution, some industry players are unhappy with the level of funding and how it is spent.

"Send more money mum, it's a big old world out there and New Zealand is competing against other countries that have a lot more funding from Government," says Lance Bickford, Tourism Auckland chief executive.

Mr Bickford says to be globally competitive the Government needs to fund a new organisation to carry out market research.

He says the industry struggles because of insufficient market intelligence and lack of customer understanding.

"We still battle with the quality and coverage of research monitors in New Zealand. The new Government should really push it."

Mark Sainsbury, the chief executive of inbound tour company Pan Pacific, says the industry was extremely concerned when there was political pressure to withdraw funding from the "100%" campaign.

"We keep forgetting that we are competing with other fabulous places with much bigger budgets," Mr Sainsbury says.

"Government seems to be obsessed with trade and manufactured exports but they're probably taking their eye off the most important thing."

Other tourist operators would like to see the $55 million marketing budget spent elsewhere.

While the Tourism Board concentrates on building New Zealand's brand as a premier destination, some industry players believe more funding should go into joint venture call-to-action campaigns.

"That's not happening to the extent it was in the past where you encourage tourists to pick up the phone and make a booking," says one tourist operator.

But Mr Hickton says call-to-action campaigns do not work long-term.

"We're a long-haul destination so you don't get people walking in and buying today. It's about building a brand for the country."

The future of the industry looks rosy.

The Tourism Board expects visitor numbers to rise by almost 50 per cent during the next five years, with stronger growth from Asian, European and American markets.

Foreign exchange earnings are expected to rise to $7.7 billion during the same period.

Rotorua Tourism chief executive Oscar Nathan says tourist operators need to concentrate on quality to build New Zealand's year-long premier brand image, rather than simply focusing on volume which leads to things like accommodation price wars.

"The growth we had a few years ago from Korea was almost a false growth. The numbers that were coming through were just huge. It makes better business sense to have a 25 per cent drop in visitors, but improve our yield as an industry."

Rotorua, which traditionally targeted the Asian markets, has shifted its focus to Europe and domestic tourism markets and that has worked.

Paul Greaves, the general manager of Rotorua Quality Hotel and chairman of the Rotorua Hotel Managers' Association, says average occupancy rates have increased 20 per cent during the last 12 months.

"We're as busy, if not busier than what it was before the Asian collapse."

Mr Bickford has added a modern convention centre to his shopping list to attract more international conferences to Auckland. At the moment, the largest conference facility caters for a maximum of 700 banquet guests.

The Tourism Board is also investing heavily in the Japanese and German markets which have yet to recover to pre-Asian levels as a source of tourists.

In the meantime, the hope is for Team New Zealand to set a few winning sails in the America's Cup contest early next year to help the tourists to keep on coming back.

There's nothing the industry likes better than a cash-flushed tourist.