Review of Government's Tourism Sector Agencies

Final Report

Review of Government’s Tourism Sector Agencies

31 May 2010

Commercial In Confidence

Preface

This report has been prepared for the Steering Group established for the review of the

Government’s tourism sector agencies. The report has been prepared by Doug Martin, Chris

Gould, Tom Gott and Emily L’Ami from MartinJenkins (Martin, Jenkins & Associates Limited).

MartinJenkins is a New Zealand-based consulting firm providing strategic management support

to clients in the public, private and not-for-profit sectors.

Our over-riding goal is to build the effectiveness of the organisations we work with. We do this

by providing strategic advice and practical support for implementation in the areas of:

• organisational strategy, design and change

• public policy and issues management

• evaluation and research

• financial and economic analysis, and

• human resource management.

MartinJenkins was established in 1993, and is privately owned and directed by Doug Martin,

Kevin Jenkins, Michael Mills and Nick Davis.

Restrictions

This Report has been prepared solely for the purposes stated herein and should not be relied

upon for any other purpose.

To the fullest extent permitted by law, we accept no duty of care to any third party in connection

with the provision of this Report. We accept no liability of any kind to any third party and

disclaim all responsibility for the consequences of any third party acting or refraining to act in

reliance on the Report.

We have not been required, or sought, to independently verify the accuracy of information

provided to us. Accordingly, we express no opinion on the reliability, accuracy, or completeness

of the information provided to us and upon which we have relied.

The statements and opinions expressed herein have been made in good faith, and on the basis

that all information relied upon is true and accurate in all material respects, and not misleading

by reason of omission or otherwise. We reserve the right, but will be under no obligation, to

review or amend this Report, if any additional information, which was in existence on the date of

this Report, was not brought to our attention, or subsequently comes to light.

This Report is issued pursuant to the terms and conditions set out in our contract dated 23

February 2010.


Contents

Executive Summary 1

1 Introduction 9

2 Approach 10

3 Overview of Roles and Responsibilities 15

4 The Role for Government 17

5 Clarity of Roles and Responsibilities 22

6 Value-for-Money 29

7 Economies of Scale and Scope 35

8 Co-ordination With Other Agencies 38

9 Organisational Form 40

10 Recommendations 41

Appendix 1: Interviewees 44

Tables

Table 1: TMT and TNZ Outputs .................................................................................................. 15

Table 2: List of Interviewees ....................................................................................................... 44


Final Report 1

Executive Summary

The objective of this review is to optimise the role government plays within the tourism sector in

order to support the Government’s goal of maximising the value tourism can add to growing a

highly productive New Zealand economy. To this end, the primary focus of the review is on

ensuring clarity between the roles and responsibilities (including functions and services) of the

key government tourism agencies, being the Ministry of Tourism (referred to in this report as

TMT) and the New Zealand Tourism Board (referred to by its trading name of Tourism New

Zealand or TNZ). The review also considers the alignment and synergies with other

government agencies involved in the tourism sector.

Three main questions form the terms of reference for this review:

1. what roles, functions or services should government play in support of the objectives noted

above?

2. are there any functions or services not being provided that should be, any functions that are

being duplicated, or any functions currently provided that should be stopped? and

3. how should the government tourism sector (TMT and TNZ) best organise themselves to

deliver on these roles, functions and services?

Based on our review of the roles and responsibilities of the two main agencies – TMT and TNZ

– we conclude that current arrangements are not fundamentally flawed or broken. There are

benefits from retaining the two agencies (although not necessarily in the current form) with TNZ

continuing to focus on its core business of marketing New Zealand to international visitors and

TMT continuing to be the provider of policy advice to Government on tourism matters.

We have considered the option of combining the two entities into one organisation either in

departmental, or Crown entity, form. This is not recommended. The departmental form is not

well suited to the effective development and execution of marketing strategy. There is a need

for strong commercial drive and acumen in relation to marketing strategy and we doubt that this

capability can be fostered in a department form. Equally, the Crown entity form does not work

well for policy. Policy relies on a having close relationship with Ministers and the core public

service. The arm’s-length nature of Crown entities does not easily provide this. Moreover,

because Crown entities are legally separate from the Crown, policy developed by a Crown

entity is owned by the entity; not the Minister.

Even though we recommend retaining two separate agencies, we consider that there is a

number of steps that should be taken to make current arrangements work more efficiently and

effectively and to enhance the contribution of the Government’s tourism sector agencies. The

opportunities for enhancement are discussed in relation to the second and third questions noted

above.


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Turning to the first of the questions above – the role for government, we have considered

whether there is a justification for each of the outputs that are produced by TMT and TNZ. For

the most part, we conclude that the answer to this question is yes. Our reasons for this include:

• policy advice is generally regarded as core business for government. There are strong

public good aspects associated with policy advice. The market, left to itself would lack the

means and incentives to fund independent policy advice. Similar arguments apply to the

research undertaken by TMT which delivers statistical information that is part of what is

referred to as the core tourism dataset, and

• marketing NZ to international visitors involves significant externality benefits; that is, the

marketing activity of one operator would tend to benefit others and, as a result, the level of

investment in marketing, if left to the market, would be below that which is optimal. Again,

there is a strong case for government involvement.

In short, as far as the core activities of TMT and TNZ are concerned, we conclude there are

good reasons for government involvement in these areas. The need for government

involvement is somewhat less clear, however, in some related areas of activity. In particular we

consider that the need for ongoing government involvement in the following areas could be

reviewed further:

• TNZ’s 60% ownership stake in, and ongoing financial support for, Qualmark. We consider

that there are benefits in having this scheme but we are not convinced that there needs to

be an ongoing ownership interest. TNZ is taking steps to render Qualmark financially

sustainable without the need for ongoing funding support from government. Once

sustainability is attained, consideration could be given to divesting TNZ’s ownership

interest, and

• TMT has responsibility for administering scholarship grants and the tourism facilities grants

programme (grants totalling $300,000). We are not convinced that these grants confer

significant value and consider that the case for their continuation should be assessed.

The second and third of the questions raised in the terms of reference for the review focus on

how the government’s agencies are organised and how they interact with one another. We

have identified several opportunities for enhancing current arrangements. The opportunities for

enhancement can be summarised under five main headings.

1 Improving clarity of roles and responsibilities

The two main agencies – TMT and TNZ – do not have a sufficiently common or agreed

understanding of the role of the other. As a result, each agency considers that to some extent

the role of other is encroaching on its responsibilities. In a small number of instances, this is

leading to duplication of roles which we discuss below under the heading of economies of scale

and scope. More generally, the current situation can be characterised as one where the two

agencies are unnecessarily shadowing one another across a range of issues.


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There would be benefits from TMT and TNZ entering into a Memorandum of Understanding

(MoU) to set out the roles and responsibilities of the agencies, the principles guiding the

interaction between them and to ensure advice from each agency is visible to the other. The

MoU could usefully incorporate the findings of this report in relation to policy, research and

evaluation and monitoring functions.

Policy

It is in the policy area where the lack of clarity of roles is most acute. We note that in situations

where there is a lack of clear regulatory reason for intervention in a sector (as is the case for

tourism), the role for policy can be less clear.

Advice on policy issues spans a continuum from the strategic to the operational. We consider

the focus for TMT needs to be firmly rooted at the strategic end of the spectrum with operational

policy matters being within TNZ’s ambit. For example, TMT might assess the economic

footprint of tourism compared to other sectors to inform government’s thinking on its investment

priorities, but it should be TNZ that undertakes analysis around market selection.

The demarcation of roles is not black and white in all situations. The relationship between the

agencies needs to develop to the point where each will engage with the other to determine,

where needed, which agency should take the lead on a particular issue without resorting to a

defensive “this is our patch” mindset.

By clarifying roles in relation to policy, we would expect the policy role of TMT to narrow and

concentrate on key strategic matters around the need for, and form of, government intervention.

As a consequence of this, we would also expect there to be a review of capability requirements

including an assessment of the potential for reducing the number of policy staff.

Research and Evaluation

The issue of role clarity has also arisen in the context of research and evaluation. We consider

that there is a role for TMT and TNZ to engage in research in order to support their core policy

and marketing roles.

With respect to TMT, it should have responsibility for statistics that have strong public good

characteristics. This includes, in particular, statistics that form part of the core tourism dataset

(CTD) most of which serve a wide range of purposes (e.g. visitor arrival numbers have

relevance to border control agencies as well as tourism interests).

TNZ needs to commission research in order to assist with evaluating and informing its

marketing strategy. Its research tends to have a strong consumer orientation.


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We note that TMT is involved in a number of industry surveys in partnership with industry bodies

where the focus is on particular segments of the tourism sector (e.g. the convention activity

survey). Compared to the CTD, sector-specific surveys do not have the same degree of public

good characteristics. Accordingly, while there can be a case for some government funding, the

cost of such surveys should, in part, be paid for by industry. There is a need to develop a

funding framework in this regard.

With respect to evaluation, both agencies need evaluation capability to inform policy

development and marketing strategy. Like policy, research and evaluation also spans a

continuum and, accordingly, there is the potential for the research and evaluation activities of

the two agencies to cross over. Our assessment is, however, that the level of duplication is

minimal. The more significant issue is whether there are opportunities for the two agencies to

better integrate their respective evaluation work so that the knowledge that is created is

complementary and collectively adds greater value.

2 Value-for-Money

We have identified several areas where the roles of the agencies could be modified to deliver

greater value for money.

With respect to marketing, there is a need for further work on the intervention logic that

underpins marketing strategy to optimise the mix and level of marketing initiatives and

marketing expenditure. This should also include work on a performance management

framework and supporting performance measures to assess the effectiveness of marketing.

There would be significant benefits from having engagement between TNZ and TMT at an early

stage of the process to ensure that there is shared and agreed understanding of the way in

which the effectiveness of marketing is to be assessed.

The current workplan for TMT’s policy team spans a wide range of issues and there is a higher

than normal proportion of time spent on what we would view as being relatively low-value policy

work. Greater value for money would come from developing a framework to more effectively

prioritise the use of resources and to direct a relatively greater proportion of policy resource

toward key questions around the need for, form of and extent of government intervention in the

tourism sector.

Although there are indications that the quality of TMT’s monitoring of TNZ has improved in

recent times, our assessment is that there is scope to reorient the monitoring focus to deliver

more value. In particular, there would be benefits from reorienting toward a more strategic, and

less operational, focus. Moreover there should be a risk based approach to determining the

level and nature of monitoring effort. The principles that underpin the monitoring relationship

and role could usefully be agreed as part of the proposed MoU between TMT and TNZ.


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TMT administers a scholarship programme and the Tourism Facilities Grants Programme. Both

programmes are small in size. We are not convinced that these grants deliver sufficient benefit

to warrant their ongoing provision. The case for these grants should be reviewed.

3 Economies of scale and scope

In the area of research and evaluation, there is a small element of duplication between the two

agencies. Both of the main agencies produce market profiles and the content of each is similar.

This duplication should be addressed.

There is also some overlap between the Visitor Experience Monitor (VEM) managed by TNZ

and the International Visitor Survey (IVS) managed by TMT. Both surveys include information

on visitor satisfaction but the IVS also has a much wider scope. Consideration could be given

to incorporating the detail of the VEM into the IVS but the issue is not straightforward because

of sample sizes, the uses to which the surveys are put and cost. A preferable option is to

explore options for better linking the two surveys.

4 Inter-agency co-ordination

Co-ordination between the Government’s tourism sector agencies is improving, but there is still

work to do. In particular:

• TNZ has interest in the quality of the “product” that is being marketed which, in turn, raises

issues around the need for, and scope of, government intervention regarding the capability

of businesses operating in the tourism sector. Support for business capability building fits

with the operational responsibility of New Zealand Trade and Enterprise (NZTE) but there is

a need to determine what roles NZTE will play in respect of building the capability of tourism

sector businesses.

• TMT and Te Puni Kokiri (TPK) have been collaborating to define the appropriate role for

government in fostering the development of Maori tourism. There is a need for TMT and

TPK to continue to work together to agree strategic priorities and the roles of the respective

agencies.

There are also issues involving the co-ordination between central government and regional

tourism organisations (RTOs) as well as between RTOs (but that is outside of the scope of this

review). The relationship between TNZ and the 29 RTOs has been improving but there are

challenges inherent in having to deal with a large number of organisations with differing

capabilities. We support continued use of the joint venture fund which is being used to leverage

relationship and co-ordination opportunities with, and across, RTOs.

5 Organisational form

TMT is a semi-autonomous body (SAB) within the Ministry of Economic Development (MED).

The SAB model does not sit comfortably with the accountabilities conferred on the CEO of MED


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by the State Sector Act. From a machinery-of-government perspective, we consider that

accountability would be better served by removing TMT’s SAB status and folding it into the

MED. This would also confer benefits in terms of:

• better aligning structure with the Government’s desire to have a closer linkage between

tourism and wider economic development, and

• more closely integrating policy, research and evaluation and monitoring roles, with the

capabilities that exist within the MED in each of these areas.

Recommendations

Based on the foregoing, we recommend that:

The Case for Change

a. the Steering Group note that arrangements governing the government’s core tourism sector

agencies (TMT and TNZ) are not fundamentally flawed or broken but notwithstanding this,

there is a case for change based around:

(i) clarifying roles and responsibilities (ii) reviewing government involvement in some areas (iii) enhancing value for money (iv) taking advantage of economies of scale and scope (v) improved inter-agency co-ordination, and (vi) changes to organisational form (for TMT)

Role Clarity

b. MED to ensure that TMT reorients its policy role to ensure it functions at a more strategic

level and focuses on the key issues of the need for, form of, and level of, government

intervention in the tourism sector

c. MED to assess the implications of recommendation (b) for its capability requirements and

staff numbers (our expectation is that the level of capability required will rise, but the

number of staff needed may reduce)

d. TNZ take the lead role on operational policy matters that pertain to its overarching

marketing responsibilities

e. TNZ’s statutory mandate be modified, at some stage, to better align the description of TNZ’s

functions with its marketing roles and responsibilities (this will need to involve TNZ and

TMT) and, pending statutory change, TNZ’s roles and responsibilities should be reflected in

its Statement of Intent

f. independent consultants assist TMT and TNZ to develop and agree a Memorandum of

Understanding (MoU) setting out roles and responsibilities with particular emphasis given to

policy, research and evaluation and monitoring and processes for ensuring advice from both

agencies is visible to one another


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g. TMT and TNZ jointly work toward fostering a relationship where both agencies engage

when issues arise to determine who should take the lead

Role for Government

h. TNZ and TMT develop a funding framework to determine the optimal balance of Crown and

other funding for research that has industry and private good characteristics

i. TNZ, in consultation with TMT, review the need for an ongoing ownership by TNZ in

Qualmark once Qualmark is assessed as being financially self sustaining

Value for Money

j. TMT and TNZ agree a framework and process to guide the evaluation of marketing

strategies, campaigns and initiatives and that this be undertaken in the context of an agreed

MoU

k. TMT develop a tool/framework to prioritise its policy work and that as the policy work

programme is developed, this be shared with TNZ so that TNZ has awareness of policy

issues that have relevance to its roles and responsibilities

l. TMT reorient its monitoring of TNZ so that it is more strategically, and less operationally,

focused and so that a risk-based approach is taken to determining the level of monitoring

effort

m. TNZ review its capacity and capability requirements in light of its new marketing strategy

n. TMT, in conjunction with TNZ, review TNZ’s funding arrangements with a view to enhancing

opportunities to leverage private sector funding for marketing

o. the Chair of TNZ and TMT/MED provide advice to the Minister of Tourism regarding the size

and composition of the TNZ Board (to ensure that there is a sufficient complement of strong

governance skills including experience of governance in a Crown entity context and to

reduce the number of members as appropriate for the size of the entity) and on how any

change might be achieved

p. TMT review the benefits and costs associated with grants in relation to the Tourism

Facilities Grants Programme and scholarships, with a view to assessing whether or not

these should continue

Economies of Scale and Scope

q. TMT cease the production of market and sector profiles and instead provide input, as

required, to the profiles prepared by TNZ

r. TMT and TNZ continue to maintain appropriate levels of research and evaluation capability

in order to support their respective roles relating to strategic policy and marketing and, in

order to realise opportunities for economies of scope, TMT and TNZ establish an inter-

agency forum (or process) for development of a sector-wide research programme


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s. TMT lead, with input from TNZ, a project aimed at establishing better web-based linkages

between the tourism data sets that are currently split between TMT (including the core

tourism dataset and other macro-oriented statistics) and TNZ (consumer focused statistics)

and, more generally, that TMT use the upgraded data management system (a project

already underway) to facilitate stakeholder use of the information resources available

t. TMT transfer its land management responsibilities to LINZ

Co-ordination With Other Agencies

u. TNZ continue to have a role in marketing Maori tourism, extending existing efforts through

developing closer relationships with Te Puni Kokiri and the Maori tourism sector

v. TMT and Te Puni Kokiri continue to collaborate on defining the appropriate role for

government in fostering the development of Maori tourism (consistent with a direction

received from the Ministers of Tourism and Maori Affairs) and that, in support of this

direction, TMT and TPK jointly work to agree strategic priorities and the roles of their

respective agencies

w. TMT and TNZ engage with NZTE as part of the process of developing the MoU (referred to

in recommendation (f) above) with a view to determining what roles NZTE will play (as the

central government agency with operational responsibility for business capability building)

in respect of building the capability of tourism sector businesses

x. TNZ continue to administer the joint venture fund, based on criteria agreed between TNZ

and TMT, as a lever for promoting greater collaboration with, and between, RTOs

Organisational Design

y. MED prepare a paper for the Minister of Tourism to take to Cabinet recommending that

TMT’s status as semi-autonomous body be terminated, and that TMT be integrated within

the MED.


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1 Introduction

Objective

1 Tourism makes a significant contribution to the New Zealand economy. The objective

of this review is to optimise the role government plays within the tourism sector in

order to support the Government’s goal of maximising the value tourism can add to

growing a high productivity New Zealand economy. To this end, the

recommendations stemming from the review should:

• improve role clarity

• ensure value-for-money (and remove any unnecessary duplication, gaps and

overlaps)

• achieve, where possible, economies of scale and scope

• be consistent with good public sector management and organisational design

principles, and

• include mechanisms to improve collaboration.

Purpose

2 The primary focus of the review is on ensuring clarity between the roles and

responsibilities (including functions and services) of the key government tourism

agencies, being the Ministry of Tourism (referred to in this report as TMT) and the

New Zealand Tourism Board (referred to by its trading name of Tourism New Zealand

or TNZ). The review is also to consider the alignment and synergies between TMT,

TNZ and other government agencies; for example, Te Puni Kokiri (TPK), New Zealand

Trade and Enterprise (NZTE) and the Department of Conservation (DoC).

3 The specific questions to be addressed as part of the review are:

• what roles, functions or services should government play in support of the

objectives noted above?

• are there any functions or services not being provided that should be, any

functions that are being duplicated, or any functions currently provided that should

be stopped? and

• how should the government tourism sector (TMT and TNZ) best organise

themselves to deliver on these roles, functions and services?


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2 Approach

Process

4 The approach to the review has progressed in four main phases as follows.

Information gathering phase

5 The objective of this phase was to obtain a comprehensive understanding of current

roles and responsibilities. This phase drew on a review of relevant documentation

provided to us by MED, TMT and TNZ. It also involved interviews with personnel from

these three agencies plus several other government and non-government

organisations. A full list of interviewees is included as Appendix 1.

Issues identification phase

6 During this phase, we identified issues arising with current arrangements based, in

part, on information obtained through the interviews and, in part, on our own

assessment of current arrangements compared to good public sector management

and organisational design principles (these are described below). This phase

culminated in the preparation of a “Current State” report that was discussed with the

Steering Group formed for the purposes of this review and with TMT and TNZ. Key

findings from the Current State report are included in this report.

7 Although a number of issues with current arrangements were identified, overall our

assessment was that current arrangements are not fundamentally broken or flawed.

The nature of the issues does not, in our view, give rise to the need for radical reform

of either of the core agencies that have been the focus for this review. Rather, the

issues pointed to a need to:

• clarify roles and responsibilities

• review the need for ongoing government involvement in some areas

• enhance value for money

• take advantage of economies of scale and scope

• improve inter-agency co-ordination, and

• consider a change to TMT’s organisational form.

Options development phase

8 The purpose of this phase was to identify and explore options for addressing the

issues identified with current arrangements and address each of the points in the


Final Report 11

preceding paragraph. An Options paper was prepared and discussed with the

Steering Group. The paper was also discussed at workshops involving TMT and TNZ

personnel. The workshops were intended to share perspectives on the range of

options as part of the process of working toward conclusions and recommendations

for enhancing the contribution of the Government’s tourism sector agencies.

Reporting phase

9 This phase draws together the information and analysis from the previous phases. A

draft report was prepared for review by the Steering Group and personnel from TMT

and TNZ. Feedback from these groups was incorporated, as appropriate, into this

report.

Principles

10 In determining the optimal arrangements for roles and responsibilities of the

government’s tourism agencies, consideration needs to be given to a range of

machinery of government and organisational design principles. The principles we

have had regard to are outlined below.

11 At the time of preparing this report, the Government had recently announced its

intention to amalgamate various government agencies as follows:

• amalgamating the Foundation for Research, Science and Technology (FRST) and

the Ministry of Research, Science and Technology (MoRST)

• amalgamating Archives NZ and National Library into the Department of Internal

Affairs, and

• amalgamating the New Zealand Food Safety Authority with the Ministry of

Agriculture and Forestry.

12 The changes are part of the Government’s desire to improve state sector performance

and, in this respect, there are three main objectives that apply to any machinery of

government change:

a) Improved service (within existing baselines):

i. improving the quality of services to citizens and stakeholders,

(e.g. more seamless service delivery where appropriate); or

ii. improving responsiveness to Ministers- more coherent, timely

advice and action; or

iii. better alignment of functions to achieve government priorities

AND/ OR


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b) Reduced cost in the short to medium term (especially in core government)

through

i. eliminating the need for unnecessary duplication of functions

or low-value coordination activities across agencies

particularly if their activities rely on similar skills, processes

and technologies; or

ii. achieving economies of scale (e.g. delivering basic ‘backroom’

functions off a larger corporate platform) or economies of

scope (e.g. grouping similar activities together); or

iii. disestablishing functions that have a lower priority in light of

Government’s objectives and the tight fiscal outlook.

AND/ OR

c) Future-proofing the long-term delivery of government services through, for

example:

i. ensuring that small to medium-sized agencies, with relatively

high fixed costs, can operate through a long period of fiscal

constraint off more sustainable, lower cost corporate

platforms;

ii. ensuring that investment decisions in closely related

technologies or systems are strongly integrated, where

needed, to reduce the costs of the Government’s investment

programme and to accelerate the realisation of the benefits of

investment across government.

13 The principles that support achievement of these objectives are set out below.

Alignment with Statutory Frameworks

14 There are aspects of the statutory framework governing the work of TMT and TNZ that

need to be considered.

15 With respect to TMT, although it operates as a semi-autonomous body (SAB) within

MED with a direct line of reporting to the Minister of Tourism, under the State Sector

Act 1988, the Chief Executive of MED is accountable for the performance of Ministry

of Tourism. The SAB model presents some inherent challenges for effective

accountability and, accordingly, there is a need to consider whether TMT should

continue as a SAB within MED.

16 The objects and functions of TNZ are set out in the New Zealand Tourism Board Act

1991. The framework for the governance, operation and accountability of TNZ is

prescribed in the Crown Entities Act 2004, which categorises TNZ as a Crown Agent.


Final Report 13

As such, TNZ is required to give effect to government policy. There is a need to

expressly consider the scope of the objects and functions of TNZ, together with its

status as a Crown Agent, in assessing its roles and responsibilities.

Effective Decision-making

17 The allocation of roles and responsibilities between the tourism agencies should

support effective decision making within Government, thereby enabling the

achievement of the Government’s desired outcomes for the tourism industry. As part

of this, arrangements should promote coherent and timely advice to Ministers. The

analysis will include consideration of roles and responsibilities for engaging across

government on issues that are exogenous to tourism but could potentially impact on

the sector’s performance.

Effective Delivery of Core Government Functions

18 The allocation of roles and responsibilities between the tourism agencies should

support the effective delivery of core government functions for the tourism industry,

and enable a sharper focus on the industry’s contribution to the Government’s key

priority of economic development.

Efficient Use of Resources

19 The allocation of roles and responsibilities should support the efficient use of

resources. There are multiple dimensions to this including:

• minimising the scope for overlaps, duplications and gaps

• supporting the flexible use of resources

• maximising opportunities to benefit from economies of scale and scope

• disestablishing functions that have a lower priority in light of the Government’s

objectives and tight fiscal outlook, and

• ensuring that smaller organisations including TMT and TNZ are able to operate

through a long period of fiscal constraint because they are working off more

sustainable and lower cost corporate platforms.

Effective Communications

20 The allocation of roles and responsibilities should promote effective communications

and engagement between the tourism agencies, other government agencies and the

tourism industry.


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Appropriate Capability and Capacity

21 To work effectively, roles and responsibilities should be supported by appropriate

levels of capability and capacity (people, systems, processes). Consideration needs

to be given to the relative skills, knowledge and other capabilities necessary to

undertake the required range of functions within each agency. This involves an

assessment of the level and mix of resources of the main agencies and consideration

as to whether their size is appropriate to their roles.


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3 Overview of Roles and Responsibilities

Current Roles and Responsibilities

22 The table below provides a summary of the outputs delivered by TMT and TNZ. In

both cases, the output headings are based on those contained in 2009/10

accountability documentation.

Table 1: TMT and TNZ Outputs

TMT TNZ

Policy

• Why and how the Government needs to intervene in

the tourism sector

• Focal point for providing tourism policy perspective

to policy issues affecting the tourism sector

• Tourism marketing, management of tourism on the

conservation estate etc.

Marketing (operational policy)

• Market research

• Marketing strategy

• Advertising, Branding

• International PR activities

Research and Statistics

• Data management

− Industry good research and forecasts

− Industry collections

• Analysis

• Dissemination

− Web-based

− Publications

Information for Visitors:

• Consumer website

• Support for i-sites

Monitoring

• TNZ

• Maori Arts and Crafts Institute

Quality Assurance

• Qualmark

• Approved Destination Status (ADS)

Ministerial servicing

• Briefings/speeches

• Ministerials, OIAs, PQs

Ministerial servicing

• Briefings

• Ministerials, OIAs, PQs, Complaints

• Ministerial Travel

Administration & management

• Crown Land

• Grants & scholarship administration

• Cycleway

Working with overseas travel trade and airline carriers

• Training

• Trade events (hosting/participating)

• Familiarisations (for overseas sellers)

• Information provision to overseas sellers (incl

traveltrade website)


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TMT TNZ

• Engaging with international air carriers

Informing and engaging with the NZ tourism industry

• Seminars

• Conferences

Informing and engaging with the NZ tourism industry:

• Publications

• Industry website

• Engagements (e.g. road shows)

• Advice to regions and RTOs

23 As indicated in the table above, there is a number of functions that are common to

both organisations (i.e. research and statistics, policy-related, and ministerial

servicing) In section 5, we assess whether current arrangements are leading to

duplication of roles and responsibilities and, hence, inefficiency. Following sections

identify opportunities for enhancing current arrangements under the headings of

value-for-money, economies of scale and scope, inter-agency co-ordination and

organisational form. Before this, however, we consider the issue of the role for

government and whether there are any outputs/functions included in the table above

where the case for government intervention can be questioned.


Final Report 17

4 The Role for Government

24 The first of the questions posed as part of the review is what roles, functions or

services the government should play in support of its tourism objectives. Accordingly,

there is a need to understand why government needs to be involved in providing and

funding the activities that are undertaken by its agencies.

25 In summary, we conclude that there are sound reasons supporting the need for

government intervention with respect to TNZ’s core marketing roles and TMT’s core

policy and research and evaluation roles. Our reasons for this are set out below.

Marketing

26 Marketing is, by far, the largest of TNZ’s outputs ($39.5 million in 2009/101 and 59

FTE staff out of 128.6 FTEs as at April 20102) and lies at the heart of TNZ’s statutory

mandate. The issue of whether there is a role for Government in relation to marketing

New Zealand to international visitors has previously been considered in the context of

the 2005 Baseline Review of TNZ. That review concluded that there are elements of

market failure which warrant government involvement, through TNZ, in marketing NZ.

In brief, the two main reasons included in the baseline review were as follows.

• Marketing tends to involve significant externality benefits. Individual tourism

operators who invest in offshore marketing are unlikely to capture the full benefits

of that investment because the benefits spill over to others in the sector (and NZ

more generally). As a result, the level of investment is likely to be below that

which is optimal.

• The fragmented nature of the industry means that the minimum investment in

marketing that is necessary is unlikely to emerge without partnership with

Government. This was referred to in the 2005 review as a problem of indivisibility.

27 We concur with these points and consider that they still have relevance. In relation to

the second of the points above, we would add that the fragmented nature of the

industry also means that there would be high transactions costs if individual tourism

operators attempted to club together to invest in marketing. Government intervention

is a way of minimising transactions costs.

28 The arguments above support the need for government funding for offshore

marketing. It does not necessarily follow, however, that marketing should be funded

solely by government and/or undertaken only by TNZ. We note from the 2005

baseline review a comment made to the effect that while the 100% Pure campaign

had been a success in branding the nation (and, hence, raising awareness of NZ as a

1 TNZ Statement of Intent 2009/10 p37 2 Source: TNZ


18 Final Report

travel destination), there was a need for greater focus on the conversion to actual

travel in key markets. The 2005 review indicated that this could argue for greater

industry contribution to marketing. TNZ already actively pursues joint marketing

initiatives with major organisations involved in the tourism sector (e.g. Air New

Zealand). Opportunities in this regard should continue to be developed.

Policy Advice

29 TMT’s budget for policy and research outputs in 2009/10 amounts to $8.485 million

which accounts for over 80% of TMT’s budget (including the cycleway project).

30 Policy advice is generally regarded as being a core activity of government. There are

strong public good aspects associated with policy advice in that the impacts of advice

are widely felt and it is generally not feasible, or desirable, to try to exclude people

from benefiting from the provision of policy advice.3 Where strong public good

characteristics are present, there is a case for government funding of the good or

service; the market left to itself would lack the means and incentives to fund the good

or service.

31 Generally, it is accepted that lead responsibility for policy advice rests with ministries

reflecting the following considerations:

• the need for a close relationship with the Minister

• ministers are more easily able to direct ministries than they can Crown entities

• ministries are part of legal Crown which implies a range of obligations and

practices in policy making

• the Crown entity governance structure does not lend itself to facilitate the often

fluid nature of policy development, and

• the need to minimise the potential for policy advice to be biased by sector or other

interests.

Research and Statistics

32 TMT’s expenditure on research and statistics is budgeted to be $4.602 million in

2009/10. This includes the core tourism dataset (CTD). The CTD is integrated into

New Zealand’s Official Statistics System (OSS) that is overseen by Statistics New

Zealand (SNZ). As such, these statistics have strong public good characteristics and,

3 In contrast to public goods, private goods have the characteristics that the consumption of a good or service by one

person cannot be simultaneously consumed by somebody else and that it is possible (and economically desirable) to exclude people from consuming the good or service unless they pay for it.


Final Report 19

accordingly, there are strong grounds for government funding to support their

provision.

33 TMT is also involved in several surveys in partnership with other bodies. These are

the:

• Regional visitor monitor - TMT contributes $125,000 (or 50%) of the project cost

• NZ Hotel Council survey – TMT contributes $10,000 p.a. for managing data to

place on TMT’s website

• Convention activity survey – TMT contributes approximately $31,000 (or 26%) of

the project cost, and

• Tourism industry monitor – this is wholly funded by TMT.

34 The data collected through these surveys do not seek to represent the “whole

population” but instead are focused on the respondent groups. This group of statistics

begins, therefore, to move away from the strong public good characteristics that are

associated with the CTD. For this group of statistics, and any others that are

produced for a specific part of the tourism industry, the case for government funding

(and provision by TMT) is less compelling.

35 We note that there is no framework to guide decision making in terms of whether there

should be some form of industry funding contribution toward the cost of these types of

statistic. Furthermore, there is no guidance as to determination of relative funding

contributions from government and industry. As a result, there is a risk that

government funding is not being optimised and a risk of creating a perception that

government funding is not being applied equitably across jointly funded statistics.

Accordingly, there is a need to develop a funding framework and guidelines.

Other Functions

36 There are two areas of activity where the case for government intervention is less

clear-cut; the first of these is Qualmark and the other is support for i-sites.

Qualmark

37 TNZ has a 60% ownership stake in Qualmark NZ Limited (the other 40% is owned by

the Automobile Association). TNZ undertakes activities to retain and build

membership of the Qualmark scheme. The activities include providing financial

support for Qualmark, appointing directors to the Qualmark Board and providing some

marketing support.

38 Information obtained through the Visitor Experience Monitor (VEM), which is

commissioned by TNZ, indicates that Qualmark provides visitors with consistently

assured levels of service delivery which in turn results in higher levels of satisfaction.


20 Final Report

There is also some evidence that Qualmark helps to raise standards among

businesses operating in the tourism sector and this contributes to increased visitor

spending. Furthermore, several stakeholders interviewed as part of the review made

the point that the scheme is highly regarded and industry representatives have

indicated that they would not want to see the scheme terminated.

39 The benefits of the Qualmark scheme are widely felt in that they affect most, if not all,

users of Qualmark assessed businesses. In addition, it can be argued that TNZ, as

marketer, benefits from receiving assurance regarding the quality of the “product” that

is being marketed so that the “promise” that is portrayed through marketing matches

the experience when international visitors come to New Zealand. Of themselves,

however, we are not convinced that these considerations present an unequivocal case

for government intervention and, even if some role for government is warranted, we

are not convinced that this should take the form of funding and part-owning Qualmark

Ltd. In particular:

• if Qualmark is helpful in raising standards, and if this then results in higher levels

of spending by tourists, we would expect the benefits of that to be captured largely

by those businesses that lift their standards. They should be willing to pay for

Qualmark. On this basis, the case for ongoing government funding of Qualmark is

questionable, and

• if consistency of standard is an objective, then this is essentially a regulatory

matter. The issue then is whether the government needs to regulate or whether

the industry could do it for itself. Our understanding is that TNZ does not currently

play a role in determining the standards that are set by Qualmark Ltd and,

accordingly, we are not convinced that Government needs to have a role in setting

the standards.

40 From a marketing perspective, we concur that TNZ should have an interest in

understanding the quality of the “product” that is being marketed. However, it does

not follow from this that TNZ needs to (partly) own Qualmark. Market research can

inform TNZ about the quality of the tourism product.

41 For these reasons the need for government intervention, through TNZ, is not as clear

cut as it is for the core marketing functions of TNZ. We note that ownership carries

with it ownership risks. In this regard, the Qualmark scheme has not been performing

to the level desired by TNZ and this has resulted in the need for financial support to

enable Qualmark to sustain its operations and meet cashflow requirements. TNZ is

currently working with Qualmark Ltd to review the way it operates, re-size its operating

costs and to develop a 2-3 year plan for achieving financial sustainability that does not

involve an ongoing need for government financial support.4 We support that approach

4 The amount of financial support totaled approximately $1.1 million in each of the years ending June 2008 and 2009.

Source: TNZ 2008/09 Annual Report p46


Final Report 21

and consider that as progress is made with the goal of achieving financial

sustainability, consideration should be given to divesting TNZ’s interest in Qualmark

either to the private sector or to an industry body such as the TIA.

I-sites

42 The “i-site” network is NZ’s official visitor information network with 90 sites nationwide.

Each i-site provides local/regional information relating to activities, attractions,

accommodation, transport and so on. Most i-sites are owned by RTOs although some

are in part, or full, private ownership and some operate at a profit.

43 We have considered the case for central government intervention in relation to i-sites.

In general, we do not see a need for central government to have any ownership or

funding interest in i-sites. The benefits from having i-sites accrue, for the most part, to

businesses and other organisations operating in the region/area to which the i-site

relates. RTO and or private ownership and funding is, therefore, appropriate. The

question arises, therefore, whether or not there should continue to be a role for TNZ in

relation to i-sites.

44 The nature of the functions undertaken by TNZ in respect of the i-site network is

essentially one of business support. As part of its “Information for Visitors” output,

TNZ provides staff, support services, business systems, training and marketing for the

i-site network. TNZ provides a national branding umbrella and has provided limited

financial support in 2008 and 2009 (approximately $0.5 million in each year).5 The

resource commitment amounts to approximately 3 FTE staff plus some marketing

costs.

45 Part of the role of the i-site network is to participate in the delivery of TNZ campaigns.

Research evidence indicates that the i-sites have a positive impact on levels of visitor

spend and, accordingly, TNZ views its work in relation to the i-site network as a useful

lever for influencing international visitor value. For these reasons, there is a linkage

with TNZ’s core marketing function and, on this basis, we consider that this limited

form of continued central government intervention is justified.

5 Source: TNZ 2008/09 Annual Report p46


22 Final Report

5 Clarity of Roles and Responsibilities

46 This section focuses on functions undertaken by TMT and TNZ where, based on

discussions with the two agencies, it is apparent to us that there is not a shared or

clear understanding between the organisations regarding respective roles and

responsibilities.

Policy

47 Policy can be described as the analysis and planning that guides decisions and

achieves rationale outcomes. It can be applied to situations of government, private

sector organisations and groups and individuals. Across these groups policy is often

operating on a continuum from so-called big ‘P’ to little ‘p’ – that is from high level

government (strategic) Policy through to organisational and operational policy.

Operational policy is sometimes referred to as organisational strategy.

48 In regards to tourism, Policy relates to high-level issues such as:

• whether or not the government needs to intervene in the tourism sector

• determining the appropriate form of intervention (where the need for intervention

has been established), and

• determining the extent of the intervention.

49 Policy in this context should be distinguished from operational policy which is focused

on giving effect to agreed Policy frameworks, such as marketing strategies for tourism

or strategies to ensure continuous improvement of the management of tourism on the

conservation estate.

50 In TMT and TNZ the government has two agencies which have the opportunity to

develop ‘policy’ at both ends of the continuum. The current division of roles broadly

assigns Policy responsibilities to TMT with operational policy matters (in respect of

marketing) being the responsibility of TNZ.

51 This is as it should be. TMT should have the role of developing high-level Policy

around questions of the need for, form of and extent of government intervention and

TNZ should focus on its operational policy role of tourism marketing.

TMT Focus

52 Government is looking to TMT to take the lead in providing pro-active and

independent advice on strategic Policy issues relevant to the government’s objectives

for the tourism sector. This advice will derive from TMT’s Policy foundation work on


Final Report 23

government priorities for tourism as well as being informed by TMT’s understanding of

the wider policy picture within government and in respect of economic growth and

development.

53 Based on comments made during interviews, there is some concern that TMT’s policy

advice has become too weighted toward immediate, but less strategically important,

issues. There is a challenge to balance demands and manage resources so that the

strategic needs of government are met.

54 As evidenced by the policy work programme of TMT, there is a significant number of

broader policy issues and initiatives that have a tourism dimension (mining is a topical

example). Many of these issues will be led by ministries other than TMT. Accordingly,

there is a role for TMT to maintain currency with wider government Policy and

initiatives that might have relevance for tourism. This includes maintaining effective

engagement with stakeholders as a means of ensuring that policy advice is able to

draw on informed analysis of what is happening in the tourism industry. In this regard,

there is also a role for TMT in informing TNZ of any issues that would have relevance

for the marketing of tourism. Similarly, TMT has a role in fostering and maintaining

cross-agency linkages so that when input from other agencies to tourism issues is

needed, this is readily available.

55 If the focus of Policy advice from TMT is to be re-oriented and become more strategic

in nature, consideration will need to be given to the implications for capability and

capacity. This should include an assessment of the need to invest in capability given

the change to a more strategic focus and of the potential for reducing the number of

policy staff in light of a reduced focus on lower level policy issues.

TNZ Focus

56 Under its governing legislation, TNZ does not have a Policy role. Nevertheless, it

does provide input to Policy issues where relevant and is involved in a range of joint

strategic policy-related initiatives with TMT.

57 TNZ’s principal focus, in a policy context, is on operational policy issues relating to its

core marketing functions to give effect to government’s objectives in relation to tourism

(including tourism’s contribution to wider economic development objectives). In

general this translates into the development and implementation of international

marketing strategies aimed at building awareness of New Zealand and the ultimate

conversion of this into tourism sales and economic activity. TNZ commissions

research to test the effectiveness of its marketing initiatives in these markets and to

inform the development of specific marketing strategies and tactics in markets.


24 Final Report

58 TNZ does not have a policy team or strategic policy capability (other than to the extent

that some of its employees have previously worked in a policy environment), however

information obtained through its international connections form an important input to

strategic policy development. These connections (and the information they generate)

should continue to be exploited as much as possible as part of the strategic policy

development process.

The Policy Continuum

59 Policy operates on a continuum from that which is strategic in nature through to much

more operational in focus. For the reasons noted above, we would normally expect

TMT to focus its policy advice and analysis toward the strategic end of the continuum

and TNZ to focus its policy advice and analysis more at the operational end. For

example:

• TMT should be advising on what role government could play in increasing

tourism’s contribution to NZ’s economic growth. That advice might well draw on

information held by TNZ, but the need for policy advice to be independent of

sector or provider interests means that it would not be appropriate for TNZ to take

the lead on this

• TMT might assess the economic footprint of tourism compared to other sectors to

inform government thinking on its investment priorities. TMT would not be

expected to conduct analysis around product mix, or market selection. This would

sit with TNZ as the marketing arm with the knowledge of the consumer markets

and the consumer preferences

• related to the previous point, TMT would also have a role in advising government

on the extent to which it is getting value for money from its investment in the

tourism sector. TNZ has a primary responsibility for assessing and then advising

government on the value obtained from marketing activities undertaken by TNZ

(and which form a significant part of the overall investment that government

makes in the sector) and TMT, as monitor has second opinion role in relation to

the assessment carried out by TNZ, and

• TMT would be the appropriate agency to advise government on how it might

integrate sustainable tourism strategies and policies with national and regional

sustainable development strategies but TNZ might well need to provide advice on

what this means for marketing strategy.

60 The division of roles and responsibilities in relation is not always going to be clear cut.

There will be instances where it may be appropriate for TNZ to engage in the policy

development process rather than look to TMT (e.g. because of the nature of the issue

or because TNZ has better information concerning, and understanding of, the issues).

Similarly, there will be issues with major implications for marketing (e.g. tourism

cooperation agreement between New Zealand and China) that nonetheless require


Final Report 25

direct involvement of the TMT (e.g. because of the need for ministry to ministry

interaction).

61 To ensure clarity of roles and avoid unnecessary overlaps (or gaps), there is a need

for understanding across both agencies of the types of policy issue that TNZ might

take a lead on (as opposed to providing input or second opinion). One option, that is

not uncommon across many departmental/Crown entity relationships, is to have a

Memorandum of Understanding (MoU). While the MoU itself can assist in setting out

understandings and expectations, the process of developing the MoU is, as much as

anything, the mechanism for building shared understanding of roles and

responsibilities around policy. The MoU can also document processes for ensuring

that advice from each agency is visible to the other. The MoU could usefully extend

beyond just policy roles to also include research and evaluation and monitoring.

62 The MoU and process for its development should be used as one mechanism for

fostering a relationship between TMT and TNZ that enables both organisations to

meet, when issues arise, and agree which agency should take the lead on a particular

issue.

TNZ Statutory Mandate

63 The objects and functions of TNZ are set out in the New Zealand Tourism Board Act

1991 (the Act). Under the Act, TNZ is charged with developing and implementing a

marketing strategy which will ‘ensure that New Zealand is marketed as a visitor

destination so as to maximise long-term benefits to New Zealand’6.

64 While the core focus of TNZ is clearly on international marketing (as articulated in its

current 3 Year Marketing Strategy 2010 – 2013), the Act does not provide sufficiently

clear guidance regarding TNZ’s functions in this respect. Under the Act, functions are

defined broadly; ‘to develop, implement, and promote strategies for tourism; and to

advise the Government and the New Zealand tourism industry on matters relating to

the development, implementation, and promotion of those strategies’. This wording,

especially if read independently of TNZ’s object, could be interpreted as providing for

a wide brief that extends well beyond marketing NZ as a visitor destination.

65 The function of marketing is capable of wider, or narrower, interpretation. The classic

definition of marketing is broader than promotion and advertising and centres on the

notion of the ‘marketing mix’, which addresses questions of promotion (including brand

management, advertising, communications), product (including product quality,

innovation, differentiation), place (including direct and indirect sales channels, e-

commerce) and price.

6 New Zealand Tourism Board Act 1991 s6 – Object of the NZ Tourism Board


26 Final Report

66 As alluded to in the summary of TNZ’s roles provided in section 3, TNZ adopts this

broader approach to marketing through its activities for developing digital approaches,

training and partnering with onshore and offshore tourism sellers, its engagement with

airlines, its involvement with product quality through Qualmark, its association with i-

Sites and its promotional campaigns and branding. We consider that, at some stage,

the wording of the functions described in the Act should be refreshed to more

accurately reflect the marketing roles actually undertaken by TNZ. Recognising that

opportunities to amend the legislation may take some time to eventuate, in the more

immediate future the Statement of Intent (SoI) and, within this, the Statement of

Service Performance, can be used as the mechanism to give interpretation to the

statutory mandate.

Ministerial Servicing

67 Both TMT and TNZ have a role to pay in supporting the Minister in relation to the day-

to-day tasks of dealing with ministerials, parliamentary questions, Official Information

Act requests and so on. Comments made to us during interviews suggest that in the

past, there has been some lack of clarity surrounding respective roles and

responsibilities. We also understand, however, that progress has been made in

addressing this.

68 The assignment of roles and responsibilities should not be a major issue. Generally,

we would expect there to be relatively straightforward protocols agreed with Ministers’

offices (though which much of the work in this area is channelled) which determine

which agency takes the lead on any particular issue. For the most part, we would also

expect much of the day-to-day ministerial servicing tasks to fall to TMT to manage with

TMT seeking input from TNZ as appropriate.

69 In addition to the tasks described above, ministerial servicing also includes providing

the Minister (or his Associate) with briefings and/or speeches for the purposes of

forthcoming meetings and events. When Ministers are new to their portfolio, there can

be a need for briefings to be relatively comprehensive. We sense from various

interviews that such a need no longer exists and shorter form briefings only are

required.

70 International travel occurs relatively frequently for the Minister. While both agencies

can have a role to play in assisting with the extensive planning that is needed for

international trips, we consider there are opportunities to streamline the involvement of

both agencies.


Final Report 27

Governance and Accountability

71 Under the Crown Entities Act, the Board is accountable to the Minister. The Minister

has responsibilities for monitoring the performance of TNZ and, as a matter of normal

practice, the Minister looks to officials in TMT to assist the Minister with these

responsibilities.

72 The need and arrangements for monitoring of Crown entities are different to those

which operate in the private sector. While the principles that underpin good

governance including effective accountability that apply in the private sector also apply

with respect to Crown entities, being part of the wider state sector imposes different

obligations and arrangements that do not exist in the private sector.

73 It is important that the Board of TNZ include members who not only have strong

governance skills but who also have sound understanding of the governance

framework that operates under the Crown Entities Act. In the past, the TNZ Board has

comprised individuals who were appointed because of the role they play in the tourism

sector. While understanding of the sector is one skill set that is needed for the TNZ

Board, it is not, in our view, the dominant skill requirement.

74 We note that the Board currently comprises nine members which is the maximum

allowed under TNZ’s governing legislation. The size of the Board is at the upper end

of the numbers for several major and high risk Crown entities. Although this is more of

a value-for-money issue rather than an issue of role clarity, there is scope to reduce

the number of members on the Board.

75 The functions undertaken by TMT to support the Minister in discharging his monitoring

responsibilities are an important part of ensuring effective accountability. Monitoring

should not be viewed solely, or even predominantly, as an exercise in compliance.

The monitoring function of itself should assist with the achievement of government’s

objectives and should, accordingly, add value. This is discussed further in section six.

Support for Business

76 The bulk of TNZ activity is focused on the core process of marketing. There is some

reach into aspects of product, sales and delivery which is reflective of the marketer’s

interest in the ‘marketing mix’, particularly to ensure that ‘the promise matches the

experience’ and the need to ensure ‘conversion of marketing into sales’. To ensure

that the “experience” and the “promise” are closely aligned, TNZ has interest in the

capability of domestic tourism operators to deliver on the promise. Of itself, however,

TNZ does not have the levers to influence, other than at the margin, the capabilities

that are needed by operators to deliver against the promise.


28 Final Report

77 New Zealand Trade and Enterprise (NZTE) is the central government agency with

operational responsibility for business capability building (not limited, of course, to

businesses operating in the tourism sector) as well as supporting New Zealand

businesses internationally. While it is not the role of NZTE to be the deliverer of

business capability services, as we understand it, NZTE does have responsibility for

ensuring the availability of business capability services.

78 Various stakeholders interviewed as part of this review commented that they perceive

little connection between NZTE and the two core government tourism agencies. In

our view, there is a need for greater clarity around the role of NZTE generally in terms

of what role it should be playing in supporting the government’s objectives in relation

to tourism. In this regard, there would be benefits in TMT and TNZ engaging with

NZTE as part of the process of developing a MoU with a view to determining what

roles NZTE will play in relation to the tourism sector.


Final Report 29

6 Value-for-Money

79 Value-for-money (VFM) has a number of dimensions including being effective (i.e.

selecting the mix of outputs that will maximise contribution to desired outcomes),

being efficient (i.e. combining inputs in such a way as to produce the quality and

quantity of outputs at lowest cost) and being economical (i.e. selecting inputs that that

give the best quality/cost mix given the purpose to which they are being used).

80 Within the scope of this review, it has not been our role to assess efficiency or

economy (other than in the context of identifying opportunities to achieve economies

of scale and scope). In assessing roles and responsibilities, however, we have gained

some insights regarding effectiveness, at a relatively high level, in relation to the core

activities of the two main agencies.

Marketing

81 Maximising the contribution of tourism to government’s growth objectives depends on

targeting the right tourism markets. It has not been within the remit of this review to

assess the choices that are made by TNZ is this respect. We note, however, that to

date, the primary focus of TNZ’s international visitor marketing has been on the

holiday and “visiting friends and relatives” (VFR) markets. TNZ believes that its ability

to influence these markets is stronger than is the case for other segments of the visitor

market including in particular, the business visitor market (including business-related

incentive travel) and the education sector (international student market).

82 Notwithstanding this, TNZ has indicated an intention to broaden its focus, as part of its

latest strategy, into the business and education markets and has also indicated that

some work is already being undertaken in this regard. We consider that this should be

encouraged. There are, however, more complex dynamics and policy issues to work

through, particularly in the education sector including broad issues around the ability

of government to influence international student flows, and policy settings in relation to

international students from both an education sector and immigration perspective.

83 VFM also depends on selecting the right mix of outputs (or interventions) to maximise

the contribution to desired outcomes. Good information is required to inform these

decisions. In this regard, measures of the effectiveness of marketing initiatives and

campaigns are an important input, but a challenging task. There are many factors

influencing the decisions of tourists whether or not to visit New Zealand and decisions

regarding how long to stay, and how much to spend, once in New Zealand.

Establishing the strength of causal link between interventions (marketing campaigns

and initiatives) and these decisions is inherently difficult. By implication, there are

some difficult challenges in designing a performance framework and performance

measures that help to assist in assessing the effectiveness of marketing and that


30 Final Report

provide useful feedback into the design of marketing strategies and campaigns. Two

requirements stems from this:

• the need for a robust intervention logic that links TNZ’s outputs with outcomes,

and

• the need for a sound performance management framework and performance

measures to support the assessment of effectiveness.

84 There is a need for ongoing development in these respects. The shift to digital

strategy further emphasises this need to ensure robust intervention logic and

measurement frameworks. The work that is needed on the intervention logic, and the

development of the new digital strategy, will have implications for the nature and

scope of TNZ’s marketing activities. Given this, it would also be sensible to review the

future capability and capacity requirements of TNZ.

85 The ongoing development that needs to occur around the intervention logic and

performance management framework should, in our view involve both TNZ and TMT.

There should be shared understanding between the agencies of the objectives and

outcomes to which TNZ’s marketing strategy is to contribute and joint approach to

developing the performance management framework and supporting performance

measures. From a VFM perspective, this will assist in two respects; firstly in terms of

providing government with assurance that marketing strategy and supporting

marketing initiatives will add value and, secondly, in terms of providing a common

basis from which TNZ and the monitors within TMT assess progress against TNZ’s

marketing strategy. Currently, there is not a shared view between the agencies as to

the information and measures that TMT needs for effective monitoring. We comment

further on this below.

86 Finally, we note that TNZ currently undertakes marketing that involves funding

provided by third parties. We view this as desirable as it leverages the funding that is

provided by Government. There would be benefits from reviewing TNZ’s funding

arrangements with the objective of increasing marketing opportunities that are jointly

funded with the private sector

Policy

87 The 2009/10 workplan for TMT’s policy team indicates that:

• around 25% of the policy team’s time is spent on general policy advice including

preparing speeches, briefings and ministerials

• 20% - 25% of resource is allocated to providing demand-driven second opinion

advice to other government agencies on issues that have a tourism dimension

(e.g. border policy and immigration matters)


Final Report 31

• a further 25% (approximately) of policy team resource is involved on three high

priority areas of work being:

– policy foundation work (which includes reviewing the 2015 tourism strategy to

ensure it is aligned with new priorities and changed world economic

conditions)

– improving performance measures for tourism – this includes developing a set

of international competitor benchmarks as well as work on trying to develop

better measures of marketing effectiveness, and

– advice on marketing policy (including input to TNZ in the context of developing

the three year marketing strategy).

• the balance of resource is spread across 11 other areas of work, a significant

element of which is on cross-agency (central and local government) initiatives

such as:

– safety and risk management in the adventure tourism sector

– improving environmental outcomes for tourism

– identifying business and sector level interventions to improve tourism business

performance

– improving management of tourism on the conservation estate

– Maori tourism development

– aviation tourism policy, and

– tourism-related infrastructure needs.

88 The work programme of TMT’s policy team covers a very broad span of issues (which

is not surprising given the significance of tourism to the overall economy). There are

more policy issues that the TMT policy team could get involved with than there is

capacity to provide effective input. Given the breadth of issues, there is a need for

TMT to be disciplined in terms of prioritising between competing demands and

ensuring that policy resource is directed to those areas that rank highest in terms of

importance and urgency. This need becomes even more important in a fiscally

constrained environment.

89 There is scope, in our view, to more rigorously prioritise between policy initiatives and

focus resources on the relatively few strategic/big picture policy issues of greatest

significance (e.g. the appropriate role of government in tourism). Consistent with this,

there are opportunities to devolve policy that is more operational in nature to other

agencies including TNZ. To assist with focusing TMT resource on the large and

strategically important policy issues, we consider that TMT should develop a tool or

framework to assist in determining its work priorities. The tool or framework should be


32 Final Report

used by TMT as part of its discussions with Ministers to determine policy advice

priorities and agree the Output Plan.

90 Around a quarter of the policy team’s time is given to general policy advice (i.e.

preparing speeches, briefing etc). Based on our general observation of other

ministries, we would assess this proportion as being at the upper end of the range.

This also raises the issue as to whether the balance of resources is appropriately

weighted toward strategic policy matters.

Monitoring

91 Formally, the monitoring relationship is between the Minister and the Board. Under the

Crown Entities Act (CEA), the Minister has certain monitoring roles and responsibilities

(section 27 of the CEA in particular refers).

92 As a matter of normal practice, Ministers will usually look to their ministry/department

to assist them in undertaking their monitoring role and this is the case in relation to

tourism.

93 The monitoring role comprises several dimensions including:

• purchase monitoring

• ownership monitoring

• vote administration

• issues management

• assistance with Board appointments.

94 TMT has one FTE staff involved in monitoring and part of the time of one of the senior

analysts in the policy team also provides input to monitoring.

95 Based on our review of the quarterly monitoring reports prepared by TMT in relation to

the 2008/09 financial year, our assessment is that they do not add as much value as

they could. They were relatively descriptive in nature, guarded in terms of

commentary on TNZ’s performance and tended to repeat information that was

included in the performance reports provided by TNZ. The context within which these

reports were prepared needs to be taken into account however:

• TNZ’s past reticence in supplying relevant information is likely to have impacted

on the quality of monitoring

• the monitoring relationship at that time was not functioning as well as it should

and, accordingly, as part of a strategy for improving the relationship, monitoring

advice was more muted than it might otherwise have been, and


Final Report 33

• the way in which performance information was reported by TNZ was not as

meaningful as that which is currently provided.

96 The situation is changing and for the better. The April 2010 monitoring report has

been reviewed by the SSC and Treasury and in the view of these agencies, the

monitoring report is of good standard and clearly identifies issues, provides frank and

succinct analysis and clearly identifies areas for improvement and areas of potential

risk. These are all elements that we would expect to see as part of good quality

monitoring advice.

97 Notwithstanding the improvement in the quality of monitoring, there is still room for

ongoing enhancement in several respects.

• As noted earlier, the new strategy recently developed by TNZ provides an

opportunity for the monitors and TNZ to agree objectives and to agree the

framework and measures that will be used to measure progress against the

strategy. There is an opportunity to remove some existing measures that do not

cut to the core of being able to meaningfully assess performance.

• There is a need to ensure that monitoring maintains a strategic rather than

operational focus as well as undertaking a core role of providing assurance to the

Minister that TNZ is delivering against the expectations set out in the statement of

service performance. From a strategic perspective, the primary objective should

be to advise on progress against the achievement of objectives and whether the

objectives still have currency, rather than providing opinion on the means by which

TNZ seeks to achieve those objectives.

• Providing ministers with assurance regarding organisational efficiency is also a

part of the monitoring role. The approach to this should be one of assessing the

methods and processes by which TNZ seeks to assure itself that the way it is

going about its roles is efficient rather than an alternative approach of requesting

detailed operational and financial information from TNZ. Based on interviews, we

sense that there is a tendency to resort to the alternative approach ahead of the

preferred approach.

98 Regarding the second of the points above, we note that the information disadvantage

that monitors have relative to the entities that they are monitoring means that as part

of the normal cycle of monitoring, they will not have the information necessary to

credibly second-guess the entity regarding the relative efficiency of its operations

(more in-depth analyses are required for this purpose). Moreover, there are risks in

concentrating monitoring effort on the economy with which resources are used and the

efficiency with which inputs are combined to generate outputs in part because of the

information asymmetry and in part because this gets close to seeking to direct and

manage the entity rather than leaving these roles to the entity’s board and

management. This runs the risk of undermining the ability to hold the Board to

account. As a practical implication of this, we would not expect to see monitors asking


34 Final Report

the entity for detailed management accounting information. It also runs the risk of

signalling a lack of trust in the entity and this of itself does not lend itself to an effective

monitoring relationship – something that is required in order for the monitors to do

their job well.

99 A further area for improvement is to adopt a risk-based approach to determining the

extent and nature of monitoring effort that is required. If the risk of failing to achieve

desired outcomes is assessed as being low, the level and nature of monitoring effort

should be much less intensive than a situation where the risk is being assessed as

moderate or high.

100 Given the changes proposed to enhance the monitoring function, and given the issues

that have arisen in the past between TNZ and TMT in relation to monitoring, we

consider that there is merit in utilising the MoU referred to earlier to incorporate a

section on monitoring so that there is clarity of roles and responsibilities.

Grants Administration

101 TMT is involved with a small number of grants including:

• the Tourism Demand Subsidy Scheme (TDSS) which provided funding over three

years (2004- 07) to assist small communities with high tourism flows to invest in

water and sewerage infrastructure. This scheme is effectively closed and in the

process of winding up. There is minimal administrative work involved (and that is

undertaken by MED’s Grants Team)

• the Tourism Facilities Grants Programme (TFGP) which provides funding for

physical facilities that could not otherwise be provided on a commercial basis

($300,000 in 2009/10). Administration of this is undertaken by MED’s Grants

Team, and

• five education scholarships for masters students (total $75,000).

102 The amounts of money involved in the two ongoing schemes are relatively small but

require resource to administer. Because of the small sums involved, the ratio of

administration costs to level of grant funding is relatively high. Given this,

consideration could be given to re-assessing the business case for continuation of

these grants.


Final Report 35

7 Economies of Scale and Scope

Research and Evaluation

103 TMT and TNZ both undertake research and evaluation functions. TMT is responsible

for the overarching tourism information system with key functions including data

management, analysis and dissemination. TMT delivers public-good research, data

and forecasts which provide a macro view of the sector (e.g. number of international

arrivals and tourism contribution to GDP). The information system consists of the

following three parts:

1. core tourism data components that represent the whole tourism ‘population’ and

are Tier 1 statistics7; these comprise International Visitor Arrivals (IVA),

International Visitor Survey (IVS), Domestic Travel Survey (DTS), Tourism

Satellite Account (TSA) and Commercial Accommodation Monitor (CAM)

2. annual forecasting programme that produces the ‘official’ NZ tourism forecasts,

and

3. industry collections that have been established in partnership with industry groups

and reflect the respondent groups. This includes the Regional Visitor Monitor

(RVM), the NZ Hotel Council survey, the Convention Activity Survey (CAS) and

the Tourism Industry Monitor (TIM).

104 TMT’s research programme is delivered by its internal research team (consisting of 8

FTE staff and one manager) complemented with external providers. The departmental

appropriation is $4.6m for 2009/20108.

105 TNZ’s research programme aims to generate the information required to inform and

evaluate its marketing strategy (e.g. understanding key inbound markets to NZ).

TNZ’s key research activities consist of:

• campaign tracking and evaluation research that tracks the impact of a campaign

on potential visitors

• Visitor Evaluation Monitor (VEM), which surveys actual visitor attitudes and

experiences, and

• one-off research projects that provide a better understanding of markets to assist

in improving campaign targeting.

106 The majority of TNZ’s research programme is outsourced and is managed by an

internal research team consisting of two FTE staff and one manager. TNZ’s annual

7 Tier 1 statistics are a defined set of key official statistics that are performance measures of New Zealand and must

meet principles and protocols. 8 Vote Tourism – Departmental Budgets


36 Final Report

research spend is roughly $1m per annum9. TNZ is currently reviewing its research

activities to ensure they align with, and support the delivery of, its new marketing

strategy.

107 For the most part, the work undertaken by the two agencies does not involve

duplication. There are, however, two areas where there is a degree of duplication

and, hence, scope to combine activities and achieve some economies.

108 The first of these is market and sector profiles. Both agencies produce market profiles

by country (e.g. Australia, United Kingdom, United States etc) and the profiles contain

similar information (e.g. visitor numbers, how long visitors stay, how much they spend

etc). According to TMT, updating its profiles requires less than 5% of a FTE staff to

maintain and, accordingly, is a very minor cost. Notwithstanding this, there is

duplication that could be avoided.

109 The second area of overlap is between the VEM undertaken by TNZ and the IVS

undertaken by TMT. The VEM surveys visitors from seven markets about their

holiday experiences and their levels of satisfaction. The IVS also has a “satisfaction”

component although its focus is wider, information is gathered at a different point in

time compared to the VEM and it also includes information in relation to levels of

spending, activities undertaken and visitor itinerary. A possible option could be to

incorporate the VEM into the IVS but there are issues that would need to be

addressed in order to implement this. In particular, the sample size of the VEM is not

large enough to enable weighting to the whole traveller population (which is possible

with the IVS even though the IVS of itself has quite a small sample size – 5000

people). A preferable option is to explore options for better linking the two surveys.

110 Both agencies also undertake evaluation of tourism related data and statistics. As

with the research, we consider that in general there is no duplication of role because

evaluation is being undertaken for different purposes. For this reason, we would not

support an option (which was raised during discussions by one of the agencies) to

combine evaluation resources. The risk is that by combining resources, evaluation

would end up concentrating on the evaluation needs of one organisation at the

expense of the other. In the case of TMT, most of the evaluation is undertaken by

policy personnel reflecting the strong linkages that are required between evaluation

and policy development. We do not consider it would be efficient to separate this any

more than it would be to decouple the evaluation that TNZ commissions in order to

inform marketing strategy, campaigns and so on.

111 Notwithstanding our conclusion that TMT and TNZ should continue to have research

and evaluation roles, there are potential benefits in creating a more formalised

arrangement to link the work of the agencies and foster a sense of collective

9 Contribution on the Tourism Information System, TMT, March 2010


Final Report 37

ownership of a research agenda. The option of establishing a forum (which could

include TIA and other sector-body representation) was raised during interviews

conducted As part of the review. We are aware that forums have been tried in the

past without necessarily delivering the benefits sought. The option could, however, be

considered further.

112 Tourism data sets are not currently located in one place (they are split between TNZ

and TMT). From a user’s perspective, there is a degree of inefficiency in this

arrangement. There is a need to put in place more effective linkages so that from a

user’s perspective, it is as if the datasets were in one repository.

113 We also note that SNZ has responsibility for some tourism related statistics while TMT

has responsibility for the IVS and the DTS. We understand that the separation of

responsibilities reflects underlying funding arrangements. While consideration could

be given to amalgamating all CTD statistics under the direct responsibility of SNZ,

there has been a move in recent years for responsibilities to be devolved from SNZ to

other ministries (including TMT and MED). We do not consider there are strong

reasons, on efficiency grounds, to change this arrangement.

Land Management

114 TMT manages around 500 hectares of residual tourism land at Wairakei under a MoU

with the Commissioner of Lands. The land was originally acquired for tourism use.

TMT’s responsibilities in relation to the land include securing new tourism activities,

managing the relationship with Contact Energy (the land is part of the Wairakei

thermal park) and managing a number of leases, licences and permits relating to use

of the land. TMT also has responsibility for land used for forestry purposes although

management of this land has been transferred to MAF.

115 There is no synergy between land management functions and the policy and research

activities that are core business for TMT. TMT currently employs a consultant to

undertake its land management responsibilities. We doubt that this is the most

efficient arrangement.

116 The Government has a specialist land management agency in the form of Land

Information New Zealand (LINZ). We consider that it would make more sense, from

an economy of scale perspective, for TMT’s land management responsibilities to

transfer to LINZ. We understand that some discussions have been held with LINZ in

this regard already.


38 Final Report

8 Co-ordination With Other Agencies

117 Various other government agencies have some involvement in tourism. In the context

of this review, our attention has turned primarily to Te Puni Kokiri (TPK) in the context

of Maori tourism and NZTE in the context of building the capacity and capability of the

domestic tourism industry.

Maori Tourism

118 TMT meets regularly with TPK to discuss issues around the strategic and operational

direction for Maori Tourism. When the 2015 NZ Tourism Strategy was released in

late- 2007, TMT identified a need for strategic direction and leadership in the Maori

tourism sector. The place of Maori tourism within wider tourism was, and to an extent

is, unclear. TMT led a multi-agency group, including TPK and non-government

organisations, to develop strategic priorities aimed at contributing to the achievement

of the goals for Maori tourism set out in the 2015 strategy.

119 Since late-2007, the main focus for TMT and TPK in relation to Maori tourism has

been on capability building through a Maori tourism mentoring programme (NZTE

provided assistance in setting up the programme). In late-2009, the Minister of Maori

Affairs and the Prime Minister directed TPK and TMT to work more collaboratively on

supporting the growth and development of Maori tourism. In support of this direction,

there is a need for TMT and TPK to agree strategic priorities and the roles of the two

agencies.

120 We note that funding for capability building has been drawn from a strategic

implementation fund within Vote: Tourism (and administered by TMT). This funding

terminates at the end of June 2010. The availability of ongoing funding is dependent

on the outcome of funding bids submitted by TPK as part of the 2010 Budget.

121 TNZ also plays a role in terms of marketing Maori tourism. This should continue and

be enhanced by extending existing efforts through developing closer relationships with

TPK and the Maori tourism sector. We note a view, expressed by some stakeholders

interviewed during the review, that Maori culture should be a more prominent part of

the brand that is portrayed to international visitors.

NZTE

122 As discussed in section five, there is a role for NZTE in relation to business capability

building including businesses operating in the tourism sector. There is a need for

greater clarity around how NZTE’s role integrates with TNZ and TMT and, to this end,

it would make sense for the proposed MoU between TNZ and TMT to include a

section dealing with the interface with NZTE.


Final Report 39


123 There are opportunities to improve the co-ordination between Regional Tourism

Organisations (RTOs – of which there are 29) and central government tourism

agencies. This is important to ensure consistency of strategy and messaging (or at

least avoid inconsistency). It is also important to ensure that the roles of central

government agencies do not crowd-out the role that RTOs can play.

124 The relationship between TNZ and RTOs has been improving but there are inherent

challenges in having to deal with 29 RTOs that are of varying sizes and capabilities.

We note that a $5 million joint venture fund that is jointly administered by TMT and

TNZ has been used as a mechanism for driving greater alignment and co-ordination

across RTOs. As a result of this, a couple of the larger RTOs have taken on a

leadership role and there has been some natural convergence between some of the

RTOs. We consider that the fund should continue to be used as a lever for fostering

greater co-ordination with and among RTOs.

125 With respect to Maori tourism, we note that there does not appear to be effective co-

ordination between Maori RTOs and other RTOs or between the Maori Tourism

Council and government’s tourism sector agencies in relation to, for example,

capability development and promotion. This is an issue that may need to be

considered further once roles and responsibilities at central government level have

been addressed.


40 Final Report

9 Organisational Form

126 TMT is a semi-autonomous body located within the MED. Under this arrangement,

the General Manager of TMT has a direct line of advice to the Minister of Tourism and

a measure of independence from the MED.

127 Under the State Sector Act, the Chief Executive of MED has responsibility for the

performance of TMT and carrying out the functions and duties of the MED including

TMT. While the Chief Executive can delegate the performance of roles and duties to

the General Manager, he cannot delegate the responsibility that derives from the State

Sector Act. Similarly, under the Public Finance Act, the Chief Executive is

accountable for the financial management and performance of MED including TMT

and the administration of Vote: Tourism.

128 The SAB model does not sit comfortably with the framework of the State Sector Act. It

is an arrangement that has the potential to muddy, rather than clarify, lines of

accountability and to create a situation where the responsibilities and accountabilities

of the Chief Executive of MED are compromised.

129 We are not convinced that there are benefits that would justify retaining TMT as a SAB

with “independence” from the MED. Rather, we consider that there would be benefits

from integrating TMT within MED. In particular, integration would:

• address the complexity in accountability arrangements inherent in the SAB model

• be consistent with the Government’s objective of strengthening the linkages

between tourism and wider economic development objectives

• enable greater integration and cross-fertilisation of functions and expertise

common to TMT and MED including policy, research and evaluation and

monitoring, and

• align better with the objectives of machinery of government change including for

example, improving responsiveness to Ministers, better aligning functions to

achieve government priorities and achieving economies of scale and scope.

130 For these reasons, we recommend that TMT be integrated into MED. The way in

which this is to be achieved should be the responsibility of the CEO of MED to

determine.


Final Report 41

10 Recommendations

Based on the foregoing, we recommend that:

The Case for Change

a. the Steering Group note that arrangements governing the government’s core tourism sector

agencies (TMT and TNZ) are not fundamentally flawed or broken but notwithstanding this,

there is a case for change based around:

i. clarifying roles and responsibilities ii. reviewing government involvement in some areas iii. enhancing value for money iv. taking advantage of economies of scale and scope v. improved inter-agency co-ordination, and vi. changes to organisational form (for TMT)

Role Clarity

b. MED to ensure that TMT reorients its policy role to ensure it functions at a more strategic

level and focuses on the key issues of the need for, form of, and level of, government

intervention in the tourism sector

c. MED to assess the implications of recommendation (b) for its capability requirements and

staff numbers (our expectation is that the level of capability required will rise, but the

number of staff needed may reduce)

d. TNZ take the lead role on operational policy matters that pertain to its overarching

marketing responsibilities

e. TNZ’s statutory mandate be modified, at some stage, to better align the description of TNZ’s

functions with its marketing roles and responsibilities (this will need to involve TNZ and

TMT) and, pending statutory change, TNZ’s roles and responsibilities should be reflected in

its Statement of Intent

f. independent consultants assist TMT and TNZ to develop and agree a Memorandum of

Understanding (MoU) setting out roles and responsibilities with particular emphasis given to

policy, research and evaluation and monitoring and processes for ensuring advice from both

agencies is visible to one another

g. TMT and TNZ jointly work toward fostering a relationship where both agencies engage

when issues arise to determine who should take the lead

Role for Government

h. TNZ and TMT develop a funding framework to determine the optimal balance of Crown and

other funding for research that has industry and private good characteristics

i. TNZ, in consultation with TMT, review the need for an ongoing ownership by TNZ in

Qualmark once Qualmark is assessed as being financially self sustaining


42 Final Report

Value for Money

j. TMT and TNZ agree a framework and process to guide the evaluation of marketing

strategies, campaigns and initiatives and that this be undertaken in the context of an agreed

MoU

k. TMT develop a tool/framework to prioritise its policy work and that as the policy work

programme is developed, this be shared with TNZ so that TNZ has awareness of policy

issues that have relevance to its roles and responsibilities

l. TMT reorient its monitoring of TNZ so that it is more strategically, and less operationally,

focused and so that a risk-based approach is taken to determining the level of monitoring

effort

m. TNZ review its capacity and capability requirements in light of its new marketing strategy

n. TMT, in conjunction with TNZ, review TNZ’s funding arrangements with a view to enhancing

opportunities to leverage private sector funding for marketing

o. the Chair of TNZ and TMT/MED provide advice to the Minister of Tourism regarding the size

and composition of the TNZ Board (to ensure that there is a sufficient complement of strong

governance skills including experience of governance in a Crown entity context and to

reduce the number of members as appropriate for the size of the entity) and on how any

change might be achieved

p. TMT review the benefits and costs associated with grants in relation to the Tourism

Facilities Grants Programme and scholarships, with a view to assessing whether or not

these should continue

Economies of Scale and Scope

q. TMT cease the production of market and sector profiles and instead provide input, as

required, to the profiles prepared by TNZ

r. TMT and TNZ continue to maintain appropriate levels of research and evaluation capability

in order to support their respective roles relating to strategic policy and marketing and, in

order to realise opportunities for economies of scope, TMT and TNZ establish an inter-

agency forum (or process) for development of a sector-wide research programme

s. TMT lead, with input from TNZ, a project aimed at establishing better web-based linkages

between the tourism data sets that are currently split between TMT (including the core

tourism dataset and other macro-oriented statistics) and TNZ (consumer focused statistics)

and, more generally, that TMT use the upgraded data management system (a project

already underway) to facilitate stakeholder use of the information resources available

t. TMT transfer its land management responsibilities to LINZ


Final Report 43


u. TNZ continue to have a role in marketing Maori tourism, extending existing efforts through

developing closer relationships with Te Puni Kokiri and the Maori tourism sector

v. TMT and Te Puni Kokiri continue to collaborate on defining the appropriate role for

government in fostering the development of Maori tourism (consistent with a direction

received from the Ministers of Tourism and Maori Affairs) and that, in support of this

direction, TMT and TPK jointly work to agree strategic priorities and the roles of their

respective agencies

w. TMT and TNZ engage with NZTE as part of the process of developing the MoU (referred to

in recommendation (f) above) with a view to determining what roles NZTE will play (as the

central government agency with operational responsibility for business capability building)

in respect of building the capability of tourism sector businesses

x. TNZ continue to administer the joint venture fund, based on criteria agreed between TNZ

and TMT, as a lever for promoting greater collaboration with, and between, RTOs

Organisational Design

y. MED prepare a paper for the Minister of Tourism to take to Cabinet recommending that

TMT’s status as semi-autonomous body be terminated, and that TMT be integrated within

the MED.


44 Final Report

Appendix 1: Interviewees

The following people and organisations were interviewed as part of the review. The purposes of

the interviews were to gather information relating to the functions performed by government’s

tourism sector agencies and to obtain perspectives on issues relating to, and options for, roles

and responsibilities. The interviews were conducted on a no-attribution basis so as to enable

the free and frank expression of views and perspectives.

Table 2: List of Interviewees

MED & TMT TNZ Other Organisations

• Ray Salter

• Robyn Henderson

• Liz Macpherson

• Ross Clapcott

• Bruce Bassett

• David Smol

• Turei Reedy

• Simon Hughes

• Mary McLean

• Kevin Bowler

• Simon Douglas

• Greg Muir

• Cas Carter

• Catherine Bates

• Tim Hunter

• Malcolm Johns

• Paul Richardson

• Kara Bonnevie (PM’s Office)

• Phil de Joux (PM’s Office)

• Shane Vuletich (COVEC)

• Susie Johnstone (ex-TNZ Board)

• Cathy Connelly (Stats NZ)

• Tim Cossar (TIA)

• Cheryll Sotheran (NZTE)

• Ed Sims & Norm Thompson (Air

NZ)

• Leith Comer (TPK)

• Nigel Morrison (Sky City)

• Minister Coleman

• Andy Coster (TNS Conversa)

Documents

Review of Government's Tourism Sector Agencies