Tourism operators are “leaving money on the table” by not offering the right service to a new market of wealthy Chinese visitors, Tourism New Zealand boss Kevin Bowler says.
Speaking at a tourism conference in Queenstown yesterday, Mr Bowler said a study into the experiences of Chinese visitors conducted by Tourism NZ revealed a large number were willing to spend more, but options were not explained properly to them.
Others were put off by a lack of food to their taste being offered, with accommodation providers catering well for European and Japanese visitors, but less so for Chinese and Indian tourists.
“You didn’t have to look very hard [in the study] to find areas where we could have done better.”
Affluent Chinese expected top-quality service and tourist operators needed to drop the “she’ll be right attitude”, as well as translating signage and promotional materials into Chinese, Mr Bowler said.
Although tourism industry revenues have been hit by flat growth in the United States and Britain, as well as a knock to confidence caused by international and domestic disasters, China has been a big source of visitor growth.
The number of tourists from China increased by almost 30 per cent to 130,000 in the year to April, a period in which overall arrivals increased by 1 per cent.
Strong growth is expected to continue as more flights and new routes are added.
Mr Bowler said many Chinese visitors came on group tours, which typically stuck close to the main tourist centres of Auckland and Rotorua, but there was a growing number of middle-class Chinese visitors who represented opportunities for profit.
“There’s an emerging new group of Chinese visitors that is less of the low-value visitor that we’re used to and are more like an independent traveller,” Mr Bowler said. “They tend to be younger, richer and looking for higher-value experiences.”
Air New Zealand chief executive Norm Thompson said the potential scale of the Chinese market was massive.
The airline’s passenger volumes between New Zealand and China were up by more than 20 per cent and appeared set to continue. The tourism industry needed to respond by catering specifically for that market.
“This will soon become our third-largest visitor market and could soon become our second-largest market in a relatively short timeframe, and we need to recognise that and adjust [our offering] accordingly.”
China is behind Australia, Britain and the US for visitor numbers, but at current growth rates will rise to be surpassed only by Australia within five years.
Yesterday Air NZ confirmed it was increasing its capacity to China over the peak northern hemisphere winter by 20 per cent compared with last year. There were extra flights into Hong Kong, Beijing and Shanghai.
It also announced that it was restoring some of the capacity between New Zealand and Japan, which was withdrawn after the March tsunami, by flying bigger planes to Tokyo and Osaka.
Mr Thompson said there were new bookings from Japan, and cancellations were falling off.
“At this point in time, we’re working on the basis that the Japanese market will come back to where it was in January.”
Tourism Industry Association chief executive Tim Cossar said the change in visitor profile meant operators would have to review their product offerings.
Chinese visitors were seeking a different experience from traditional Western European markets, he said.
MARKETING AXED AFTER FUNDING SLASHED
Tourism New Zealand is set to conduct an “aggressive” review of its cost structure after a cut in funding, but admits it will have to rein in its marketing in some regions.
The body, which markets New Zealand as a tourism destination internationally, will see its funding fall to $84 million in the next financial year from $99m, as announced in last week’s Budget.
Chief executive Kevin Bowler said Tourism NZ had identified “significant” savings from its IT spending and was looking to sub-let part of its Wellington headquarters, but that this alone would not cover the loss of funds.
“Over the next month we’ll sit down and say `there’s some things we’d like to do that we just can’t do in the year ahead of us,”‘ Mr Bowler said at the Trenz tourism conference in Queenstown.
He played down the possibility of job losses, saying there was “limited” scope to reduce staff without reducing services.
Even before the funding cut Tourism NZ had concluded that plans to increase spending in Eastern Europe and South America were not feasible.
Mr Bowler said it was likely spending in Britain, the United States, China, German-speaking Europe and Australia was likely to be most protected from cuts.
Tourism Industry Association chief executive Tim Cossar said the industry wanted bigger, more established markets protected.