Theme: Prioritise insight to drive and track progress (2014)

Mark Twain famously said, "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so." The Tourism 2025 framework prompts us to collect and share relevant data and turn it into meaningful information so that we are more responsive to a fast-changing world.

 

Introduction

(This document was created for the launch of Tourism 2025 in March 2014. It is not updated. See Tourism 2025 - Two Years On for the latest information on the growth framework.)

 

Individually and collectively, we are achieving better outcomes by making better decisions based on quality data and informed insight.

How we're getting there

  • Sharing our experiences: learning from others how they prioritise insight to drive and track progress reminds us that this is the way to achieve better outcomes at lower risk.
  • Sharing our knowledge: a collaborative - 'team tourism' - approach to generating insight accelerates the growth of the whole industry.
  • Gathering the right information: we're identifying what new knowledge we need for clearer insight to an ever-changing market.
  • Individually and collectively, using available data and insight to inform and underpin key business decisions.

 

 

Executive summary

Insight is at the core of the Tourism 2025 growth framework, informing and mutually supporting the other four themes - growing sustainable air connectivity, targeting for value, driving value through outstanding visitor experience and productivity for profit.  A robust insight programme is critical if we are to successfully undertake Tourism 2025’s priority actions to grow the economic value of our industry.

Creation of a tourism industry insight programme is driven by the need to create information that is accurate, timely and accessible, and helps private and public sector participants in their strategic and operational decision making.

The insight programme will need to act as a catalyst for a culture change in our industry so that the sector values information and encourages it to be used intelligently.

Better collaboration between the industry’s private and public sectors to improve information and track and drive progress throughout the course of Tourism 2025 lies at the heart of this strategy.

The strategic goals of insight are:

  • strengthening relationships and partnerships between the public and private sectors and tertiary organisations to improve insight
  • driving a culture change in the tourism industry to accept and value insight and be prepared to embrace and use it actively to help key business decision making processes
  • fostering the creation of accurate, timely and accessible insight that is relevant and easily understood, and which meets the needs of the industry and government     

Tourism 2025 Insight Strategic Overview

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The importance of insight

Overview

Tourism is big business, crucial to the New Zealand economy. Worth almost $24 billion annually, it is the country’s second largest export earner, generating significant domestic expenditure and supporting over 170,000 jobs.

Tourism is complex. With its breadth and reach across the economy from large stock-exchange listed companies to small-to-medium enterprises, from major cities to the smallest towns and remote communities in the regions, it is challenging to capture and understand the true impact and opportunities our industry offers government, the industry, wider business sector and communities up and down the country.

In order to foster growth, improve performance and create greater value, the industry requires essential visitor, economic and financial insight that is easily accessible, relevant, accurate, timely and practical.

New Zealand is fortunate to have some well-established and innovative tourism insight, largely created by public sector agencies but valuably supplemented by private sector tourism research organisations and tertiary institutions.

However, there are still significant insight gaps. For example, there is a dearth of published industry analysis and interpretation of data produced by government. These significant gaps, coupled with a lack of insight cohesion, are inhibiting the industry from realising its potential. This is directly impacting on New Zealand’s ability to remain competitive as a visitor destination. It is also depriving the industry of the evidence it needs to make sound strategic and operational decisions.

So, while there is information available, the efforts that go into producing that information can be lost, either because the insight is not visible, not reliable or doesn’t reflect market realities.

For the tourism industry to prosper, these insight deficiencies need to be addressed in a comprehensive and collaborative industry effort.

Case study: The importance of information

Tim Cossar CEO Te Puia Photo The Rotorua Daily Post

By Tim Cossar, Chief Executive, Te Puia, Rotorua

In a world where change is constant, up to date and topical information is vital. I believe it is imperative that we have insight to support tourism businesses make better decisions. Market trend information in particular is useful in providing an early and comprehensive look at what is and what might change and what is driving that change.

As an industry we also get support from central and local government. It is essential that these agencies know how tourism is performing at a higher level, so it is important that national datasets are accurate and timely and are able to support government decision making and investments.

We will probably never have all the information, research, data and insights we need in a diverse sector such as tourism but the faster we have topical information the better it is for all of us who have to make large capital and operational expenditure decisions.

As such I implore those in charge to make sure we have a world leading market insights and research programme. If we do I am sure we will be able to retain New Zealand’s position as a world class destination.

Te Puia carver RotoruaNZ.com2

Photo: Te Puia carver/RotoruaNZ.com

Tourism Data Domain Plan

In recognition of the existence of significant insight gaps, the Ministry of Economic Development (now MBIE) produced a Tourism Data Domain Plan in November 2011, with the goal of producing and providing better information at industry level. The plan seeks to provide a road-map to fill insight gaps by ensuring the tourism information produced is relevant and timely as well as being developed in consultation with tourism business and other stakeholders.

Nine key work streams are being progressively implemented through to 2017, including:

  • redevelopment of the IVS and developing an education and cruise series
  • developing Regional Tourism Indicators (RTIs) and Regional Tourism Estimates (RTEs)
  • introducing scenario planning as a forecasting method to bolster the forecasting process
  • providing more information on tourism businesses to gain an understanding of their growth, innovation, productivity and efficiency
  • improving the range of short term indicators available for industry
  • creating a new research programme to make sure niche, subsector and specialist topic areas are covered by MBIE’s research
  • improving the distribution of the dataset to ensure all interested stakeholders have ready and easy access to the latest information
  • taking advantage of developing technologies to access new data sources for research
  • working on smaller parts of the tourism dataset that don’t fit into major categories

Progress on some of these initiatives to date has led to promising improvements and developments in key tourism data outputs, such as the introduction of the RTIs and RTEs, and the redevelopment of the IVS and Tourism Forecasts prepared by NZIER. Continuing review and implementation of the Tourism Data Domain Plan is vital.

 

Existing Insight

Public sector insights

A significant quantity of tourism data is produced by the public sector.

The tourism information produced by New Zealand’s public sector is largely disseminated by three agencies:

  • Ministry of Business, Innovation and Employment (MBIE)
  • Statistics New Zealand (SNZ)
  • Tourism New Zealand (TNZ)

The core data covered collectively by these three agencies includes domestic and international visitor expenditure, arrivals and satisfaction levels, sector performance and regional statistics.

 

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Industry access to this data and insight is significantly hampered by the absence of a single comprehensive and user-friendly tourism intelligence or insight portal.

Public sector insight snapshot

Statistics New Zealand

What

When

Details

International Visitor Arrivals (IVA) and International Travel and Migration (ITM)

Monthly

The IVA provides the industry with the latest arrivals and departures of international visitors and New Zealand resident travellers. The ITM includes migrants and New Zealand resident departures.

Provisional International Travel Statistics

Weekly

The provisional arrivals and departures statistics are released to enable the tourism industry to monitor arrivals and departures on a regular and timely basis. These provide insight into arrival and departure patterns ahead of the regular monthly IVA release.

Tourism Satellite Account (TSA)

Annually

The TSA provides a picture of the role tourism plays in the New Zealand economy, with information on the changing levels and impact of tourism activity. It presents information on tourism's contribution to the New Zealand economy in terms of expenditure and employment.

Accommodation Survey

Monthly

The Accommodation Survey monitors trends in New Zealand's commercial accommodation sector and provides regional data on supply and demand. It includes statistics on guest nights, international/domestic guests.

 

Ministry of Business, Innovation & Employment (MBIE) 

What

When

Details

International Visitor Survey (IVS)

Quarterly

The IVS measures the travel patterns and expenditure of international visitors to New Zealand. The redeveloped IVS was released in November 2013 and includes a module on visitor satisfaction measures.

Regional Tourism Indicators (RTIs)

Monthly

The RTIs provide measures of the changes in level of expenditure of both international and domestic travellers in New Zealand by region. The data is based on electronic card transactions.

Regional Tourism Estimates (RTEs)

Annually

The RTEs provide absolute dollar estimates of tourism expenditure at a detailed regional level (i.e. by regional council, territorial authority, visitors’ country of origin and tourism sector).

Tourism Forecasts

Annually

The forecasts establish expectations of tourism demand at the national level. The current forecasts are to 2019.

China Market Information Programme (CMIP)

 

Ad Hoc

The CMIP offers dollar-for-dollar support for businesses undertaking research on the needs and preferences of the China visitor market. The focus is on research that will inform product and service development.

Tourism New Zealand

What

When

Details

Visitor Experience Monitor (VEM) (now integrated into IVS)

Annually

The VEM measures how satisfied or dissatisfied international visitors are with various aspects of their New Zealand holiday. It is used to assess behavioural patterns pre, post and during travel within New Zealand.

Country and Market Research

Ad hoc

A range of research projects across target visitor markets is available, to gain greater understanding of the markets, and the thinking and behaviour of potential travellers.

Target Market – Active Considerers

Ad hoc

This research looks at the demographics, emotional needs and travel preferences of travellers from TNZ’s target market, known as 'Active Considerers'.

Special Interest

Ad hoc

This delves into activities or travel styles that potential visitors have high personal interest or passion for such as golf and cycling, that drive their travel decisions and have the potential to deliver greater economic returns for New Zealand.

 

Private sector insight

A range of tourism information is produced by the private sector, particularly tourism focused- research organisations such as Angus and Associates, the Fresh Information Company and Tourism Resource Consultants. Numerous international organisations also produce useful insight for the New Zealand industry.

Snapshot of private sector initiatives

Who

What

Angus & Associates

Angus & Associates offers a range of insight services to the tourism industry. This includes the Visitor Insights Programme (VIP) looking at domestic and international visitor perceptions or behaviour. Angus & Associates also caters for the needs of businesses across the industry including Regional Tourism Organisations (RTOs) and individual operators. A good example is the Holiday Parks Association of New Zealand (HAPNZ) Business Confidence Monitor, which regularly measures HAPNZ members’ confidence levels.

Hospitality NZ 

In 2008 Hospitality NZ completed research which confirmed that the hospitality industry had very few productivity and profitability assessment monitors available, and few that were used in a formal way. Instead, many operators relied on informal communication to assess outcomes. As a result Hospitality NZ developed Hospro, a tool designed to help small and medium-sized businesses review their business performance and then seek assistance to ensure they are operating as productively as possible.

The Fresh Information Company

The Fresh Information Company helps businesses source the information and knowledge they need to measure, influence and make important decisions. The Fresh Information Company provides a mix of research, analysis, forecasting and technology.

Tourism Industry Aotearoa

TIA produces regular reports that inform the industry about relevant domestic and international trends and market information. A regular State of the Tourism Industry report is produced by TIA in association with Lincoln University and Statistics NZ. TIA has also produced cultural briefs to help tourism businesses understand and meet the expectations of visitors from China and India.

TRC

TRC is primarily involved with conservation, eco-tourism and local government projects in New Zealand and overseas. Key areas of expertise involve product development and feasibility studies, tourism planning and destination planning, tourism development, workforce development and marketing research and monitoring.

New Zealand Institute of Economic Research (NZIER)

NZIER produces a range of economic insights for the industry, including the annual New Zealand tourism sector forecasts for the eight top international visitor markets.

 

Tertiary sector insight

Tertiary institutions also focus on niche areas of tourism research, notably the Auckland University of Technology (AUT), the University of Waikato, Victoria University of Wellington, Lincoln University and the University of Otago. Many international tertiary organisations also produce useful insight. There is an opportunity to promote better dissemination of this research, but also to feed industry priorities into the tertiary sector to promote better allocation of resources.

Snapshot of tertiary sector initiatives

Who

What

Lincoln University

For more than 25 years, Lincoln University researchers have developed expertise in the areas of tourism policy and planning, environmental management, and parks and protected natural areas. Expertise includes research on climate change, wine and heritage tourism, and tourism in emerging destinations.

New Zealand Tourism Research Institute (NZTRI), Auckland University of Technology (AUT)

NZTRI, based at AUT, brings together experts from around the world to deliver innovative research solutions for the industry and those who depend on it. The research enables business, community and government to develop profitable and sustainable industry outcomes.

University of Otago

University of Otago undertakes contract research for government and industry and produces a large number of books, articles, working papers and industry reports. The University hosts the Centre for Recreation Research.

Victoria University

Victoria University of Wellington’s current research is centered on major research clusters: tourist behaviour; tourism management, strategy and economics; destination management, planning and development; and tourism futures.

University of Waikato

To better inform the industry about the changes in the Chinese outbound market place, the University of Waikato has established the China-New Zealand Tourism Research Centre. This builds on over a decade of research, including partnering on research projects with the Beijing Tourism Administration, the China National Tourism Administration and Shaanxi Province.

 

International insight

The United Nations World Tourism Organisation (UNWTO) and a number of New Zealand’s market competitors are well placed when it comes to insight, especially those in traditional markets including Australia, the UK and Canada.

Snapshot of international initiatives

Who

What

United Nations World Tourism Organisation (UNWTO)

The UNWTO produces useful tourism insight, for example on global visitor arrivals and expenditure, for national governments and the wider industry.

Pacific Asia Travel Association (PATA)

PATA focuses on the development of tourism to, from and within the Asia Pacific region. It disseminates a range of insight with particular strength in the aviation sector.

Tourism Research Australia (TRA)

TRA provides the latest statistics on both international and domestic tourism within Australia. This is collected through two main surveys – the International Visitor Survey and the National Visitor Survey. This data assists the tourism industry and other Australian businesses to make informed planning, marketing and investment decisions.

Tourism Australia (TA)

TA provides research services to the industry through consumer and market insights, plus tourism, aviation and economic analysis. It is responsible for identifying and understanding the needs and drivers for consumer segments that give the greatest return on investment.

TA also produces relevant and timely analytical research on inbound and domestic tourism markets, including analysing and communicating trends in global and domestic tourism, and identifying new and high-yield markets.

Tourism and Transport Forum (TTF)

TTF is the Australian equivalent of TIA. It informs politicians, business leaders, decision makers and the community on issues affecting the tourism industry. It offers a range of research including the MasterCard Tourism Sentiment Survey, a quarterly, independent measure of key industry themes and trends. TTF also produces the National Tourism Business Count and Employment Atlas that shows the importance of tourism to Australia’s visitor economy

Canadian Tourism Commission (CTC)

CTC regularly publishes a wide range of tourism research and insight. These include tourism monthly snapshot updates, market insight and product knowledge reports.

Office of Travel and Tourism Industries, USA

The Office of Travel and Tourism Industries provides a range of market research. This includes regular statistics on arrivals, spend and economic data.  Access is also available to users on a number of topical areas such as the Survey of International Air Travellers. This includes information on passenger trip planning, travel patterns, demographics and spending for two separate populations – non-US residents travelling to the US and US residents travelling abroad.

Japan Tourism Marketing Co.

The Japan Tourism Marketing Co provides tourism insights including up to date tourism statistics and tourism/economic trend information. Regular reports are also produced, including the Japan Tourist Bureau reports which cover spending and other trends in overseas visitor markets.

VisitBritain

VisitBritain offers a wide range of market insights, including the latest inbound visitor statistics, tourism trends, forecasts, analysis and commentary. This includes tips on how to get the most out of the market insight reports available through the VisitBritain website.

 

 

 

Insight Gaps

The following are some examples of current New Zealand tourism insight gaps, including commentary on some steps being taken to address this issue.

Visitor expenditure

Measures of visitor expenditure are the most easily understood measure on the impact and value of tourism to New Zealand.

At a national level, the annual Tourism Satellite Account (TSA) provides crucial domestic and international tourism expenditure estimates. These are published seven months after the 31 March year-end reference period. This is excellent insight but the  lag in the release of the information means the industry is using dated information, e.g. in September 2013, the industry was still using year-end March 2012 data. To realise the full potential of the TSA data the government, with industry support, needs to find solutions which enable such expenditure to be tracked more frequently.

Further, given the TSA estimates are produced in nominal (current prices) terms, there is a need to develop an official measure of this expenditure to show the effects following the removal of inflation. This would provide a true picture and understanding of the underlying growth trends and performance of tourism.

On a regional basis, MBIE’s RTI and RTE series (using electronic transaction data) has been a very positive development to meet industry’s needs. At both an international and domestic level, dating back to 2008, tourism expenditure can be measured by a monthly index (RTIs) and, more recently, on an annual basis, in actual dollar estimates (RTEs) by market, territorial authority, regional council and regional tourism organisation which are then aligned to national tourism estimates.

Despite these positive steps, there remains a considerable gap in the timely measuring and monitoring of our multi-billion dollar industry. The lack of in-depth monthly or quarterly expenditure data (in actual dollars) is a glaring omission, without which we are unable to  measure the true financial performance of the industry in a timely manner.

It is critical the industry and government collaborate to develop timely expenditure measures to complement the domestic and international volume data.

Other insight areas that could be developed to gauge regional impacts include annual Regional Tourism Satellite Accounts on the back of recent improvements in the regional gross domestic product (GDP) estimates. These could be developed on both a nominal and real basis and would be aligned to the TSA. This tool would allow territorial authorities to gauge the importance of tourism and in turn make informed decisions on investment in promotional campaigns and infrastructure developments.

Global benchmarking

The industry habitually tracks ongoing performance against past performance. While this is important, it is also vital in the fast-changing global tourism environment that New Zealand regularly and robustly benchmarks us using a range of key performance indicators. Our survival in such a volatile environment depends not only on our industry remaining internationally competitive but being focused on and determined to be better than our competitors.

One key global benchmarking indicator is share of outbound markets. At the highest level, the industry and Tourism NZ place strong focus on international arrivals numbers to New Zealand, but little or no focus on New Zealand’s comparative performance in maintaining or growing our share of outbound numbers from our key target markets.

As demonstrated in Tourism 2025’s New Zealand tourism within the global environment, even though New Zealand’s arrival numbers are growing overall, we are losing share of outbound markets from not only some of our traditional target markets but also newer markets.

Tourism Economics (a division of Oxford Economics) has a tool that provides a single source of consistent travel and economic data and forecasts. This tool is already being utilised by Tourism Australia to better inform global market conditions. It can save time-consuming analysis with a single query, enabling government agencies and the tourism industry to answer a variety of important strategic questions. This database could fill a critical information gap which currently inhibits the industry’s ability to assess performance, including allowing market share to be meaningfully tracked and adapted to suit the competitive insight required.

The industry (private and public) needs to commit to the adoption and use of important global benchmarking tools, like Tourism Economics.

Meeting the needs of our new visitors

The cultural mix of inbound tourism to New Zealand is fundamentally changing. More than ever we will need to research and understand the preferences of visitors from new markets in Asia and the Pacific Rim. In particular, we need to better understand the types of products they are looking for and what their expectations are. This includes what activities they like to engage in, what food they like to eat and what type of accommodation they prefer.  

Domestic

Good progress has been made to improve domestic tourism insight, in particular the RTIs and RTEs. However, regular monthly expenditure data is still missing. MBIE is looking at options to develop a domestic travel survey with indicators that are not captured in the RTI and RTE datasets.

Private research providers also offer a range of insight. A good example is Angus & Associates’ Visitor Insights Programme (VIP) which includes intelligence on domestic visitor behaviour and perceptions.

However, there is a lack of a coordinated and cohesive effort to draw together the current domestic visitor market insight into an easily accessible, user-friendly format. This differs from international visitor market research which has a central agency (Tourism NZ) to create and produce market insight reports.

Cruise

The cruise sector has firmly established itself as an important component of the New Zealand tourism industry and an increasing contributor of economic value. This is reflected in Cruise New Zealand’s regular economic impact reports. As this niche market continues to grow, consideration should be given to appropriately recognising cruise’s contribution to the industry through enhanced insight.

The cruise sector itself has identified a number of areas requiring attention, such as improved estimates relating to:

  • the value of providores (suppliers of goods such as food and beverages to ships)
  • non-excursion passenger spend, e.g. retail, cafes, restaurants
  • pre and post cruise activity, e.g. organised excursions and activities
  • crew expenditure and exchange estimates

It should be noted that around 68,000 of the approximately 211,000 cruise visitors to New Zealand (2012-13) flew in and/or out of New Zealand and are collected in official visitor data. The remaining 143,000 passengers (about 5.5% of total international visitor arrivals) are cruise-only passengers and are not currently recorded in the official visitor data. Engagement with Statistics NZ and other agencies should be undertaken to recognise, measure and include the total cruise market in government datasets.

Air connectivity

The importance of air connectivity to New Zealand cannot be underestimated. It is a fundamental driver of tourism demand and provides the critical link for the flow of inbound and outbound travellers. Despite this, it is not reflected in any comprehensive aviation data monitoring, collation or analysis to inform the industry.

Historically there have been calls for a more formalised data collection process but this has not materialised. As a consequence, critical trends such as the growth in New Zealand airline capacity compared to competitors has often gone unreported. Key industry players are forced to ‘make-do’ using paid content from international databases and Statistics NZ data.

Tourism 2025’s Grow sustainable air connectivity identifies proposed changes to data collection to support greater tourism insight. Together with the airline industry and government agency support, the industry could establish a rich and comprehensive source of market insight on each flight and passenger. This could enable the industry to develop and tailor products and services and in turn target the various market segments far more effectively.

Visitor experience

A wealth of information is collected on visitor satisfaction by public sector agencies and individual tourism businesses.

At a national level, Tourism NZ’s Visitor Experience Monitor (VEM), now integrated into the IVS, is a rich source of how satisfied international visitors from key markets are with different aspects of their New Zealand holiday. International visitors are also likely to encounter a number of other surveys to gauge their experience and satisfaction relating to the products and services they may have used. With each survey encounter, valuable insight is gathered but remains largely undisclosed and restricted to the businesses that have collected it.

A significant opportunity is being lost through the industry's failure to realise the power and benefits of such rich insight. To maximise efficiencies and value and to address this insight gap the industry needs to identify a pragmatic and affordable mechanism which enables such insight to be collected and common findings shared.

Productivity

Productivity is the best long-term indicator of sustained returns to the sector but there is a distinct gap in measurement and insight for the industry. Currently Statistics NZ has a total economy productivity series that could form the basis of investigations into the development of a comprehensive tourism industry measure.