Tourism New Zealand Three Year Marketing Strategy

FY2014 – FY2016

Kevin Bowler

June 2013

Timeline of process

Over the last three years, successful leverage of opportunities mitigated negative shocks

Rugby World Cup 2011

The Hobbit

Business events

China

On-going financial crisis

Earthquakes

Strong NZ dollar

Early indications for optimism in recovery of Western Markets

Markets YE April 2013 Holiday

Trend YE April 2013 Total

Trend

Australia 444,544 2.6% 1, 171,504 0.9%

China 158,080 34.5% 216,832 28.9%

USA 110,016 7.5% 188,016 2.4%

UK 72,848 -21.0% 189,040 -12.6%

Germany 44,176 3.4% 64,976 3.0%

Japan 50,432 15.7% 75,552 12.9%

Total 1,212,048 -0.9% 2,616,292 0.0%

For holiday arrivals, the first four months of 2013 v 2012 look much better

Total +45,296 +10%

Australia +10,800 +7%

China +17,664 +31%

US +10,928 +23%

UK +912 +2%

Germany +608 +3%

Japan +2,768 +16%

8.5% of international visitors said The Hobbit stimulated their interest in visiting New Zealand

46.8

8.5

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

% o

f In

tern

atio

nal

Vis

ito

rs

Source: IVS, Jan-Mar 2013

Impact of the Hobbit on interest in New Zealand

Greatest influencer of interest: landscapes/scenery

Factors that stimulated interest in New Zealand

Forecasts suggest return to growth

Commissioned by Tourism Industry Association, these forecasts present COVEC’s best estimate of future international visitor activity based on the latest visitor flows data, economic data, air capacity data and industry intelligence.

0.000

0.500

1.000

1.500

2.000

2.500

3.000

2013f 2014f 2015f 2016f 2017f 2018f

Holiday 1.199 1.235 1.277 1.318 1.355 1.390

Total 2.613 2.677 2.749 2.821 2.890 2.956

Arr

ival

s (m

)

Forecast arrivals

Strong foundation to accelerate growth

• An internationally awarded multi-channel campaign.

• Strong partnerships formed (+$20m in co-marketing funds).

• newzealand.com attracting 12.85 million visitors and driving 1.80m referrals a year.

• Major event leverage programme capitalising on major sporting and cultural events.

• International media programme generating a >70:1 value ratio.

• Successful business events programme with 10 bids won.

New Zealand’s ‘customers’

Active Considerers

96% of visitors likely to

recommend NZ 9/10 of all

visitors are highly

satisfied

Australia, USA & Hawaii,

Canada and UK are NZ’s competitors

Barriers are expense,

distance and time

Preference drivers:

landscapes, people, and

NZ’s safe reputation

Technology is affecting all aspects of

travel

Changing visitor

demographics

60m Active Considerers

across 6 markets

Thorough understanding of New Zealand’s customers

An additional $30m funding pa to enhance existing programmes and pursue new priorities

TNZ strategic priorities evolved

2014-16 Strategic Priorities

Grow a portfolio of markets that drives current

opportunities and creates future

market positions

Drive preference for visiting New

Zealand

Focus marketing activity on

clearly defined higher value

visitors

Partner widely to activate

conversion and extend

marketing reach

Optimise delivery

capability

Grow a portfolio of markets that drives current opportunities and creates future positions

• Short term opportunities balanced with creation of strong future positions.

• A portfolio that addresses global changes.

• New Zealand’s ‘Top 6’ remain highest priority.

• High value segments within markets prioritised.

• India, Indonesia and Latin America selected to accelerate quality visitor growth and secure stronger future positions.

Prioritisation of markets

Priority 1 core markets:

Australia, China and the USA

Priority 2 core markets:

UK, Germany and Japan

Priority 3 markets: South East Asia, France, Rest of Europe, Korea, Canada

Priority

emerging

markets:

India,

Indonesia,

Latin America

Drive preference for visiting New Zealand

Goal: More Active Considerers rank NZ 1st or 2nd choice

How? • Brand-led campaign activity (100% Middle Earth, 100% Pure

New Zealand and beyond).

• Digital marketing (newzealand.com will remain the central platform), with selected use of traditional media.

• More resource in international media programme.

• New partnerships with opinion leaders like Yao Chen.

• More broadcast opportunities like Amazing Race/Biggest Loser leveraged to raise New Zealand’s profile.

• Greater use of Maori culture visually in campaign work.

Focus marketing activity on clearly defined higher value visitors

• A high dollar has put negative pressure on visitor spending.

• Value needs to be defined broadly e.g. spend, regional visitation, seasonality.

• How? – Focus on the premium travel segment to grow explicitly.

– New Zealand to be positioned more strongly as a business events/incentive destination.

– Special interests including cycling, ski, hiking/walking, golf and fishing to be prioritised.

– Value outcomes from China to be improved through expansion of PKP and continued use of ‘celebrity endorsement’.

Partner widely to activate conversion and extend marketing reach

• Partnerships remain essential to the plan.

• $20-$25m pa of cash and in-kind contributions being achieved.

• How?

– On-going collaboration with RTOs in Australia.

– Continued partnerships with aviation sector to maintain & grow new direct air capacity.

– Tailored and customer focused trade partnerships.

Optimise delivery capability

• China – ADS & PKP to tackle quality issues.

• i-SITE and Qualmark to support visitor satisfaction and quality outcomes.

• Tight coordination with NZ Inc.

• Shared insights to assist industry.

• Close alignment to TIA-led national tourism plan.

• Christchurch plan to support recovery.

Optimise Delivery Capability: Christchurch Plan

Distribution of key recovery messages & images to

international media and trade through TNZ assets.

Commitment to on-going South Island focussed

regional campaign JVs in Australia leveraging ‘100% Pure New Zealand’ assets.

Attend at least two CTP meetings pa to keep across the recovery programme.

Appropriate marketing partnership support for all additional international air

services won by CIAL.

IMP to focus on wider Canterbury demonstrating

the region is largely unaffected by events in the

city CBD.

Connect CCT with international trade and

media contacts to facilitate briefings on the recovery

process as major milestones are reached.

New funding to expand activity and drive value outcomes

• Funding targets opportunities in:

1. Emerging markets

2. International business events

3. Premium travel

4. Lifting yield and performance from core markets

Y1 FY14 Y2 FY15 Y3 FY16 Y4 FY17

$29.5m $29.5m $32.0m $32.0m

Emerging growth markets strategy

• Investment in India, Indonesia and Latin America

• Strong economies leading to growth in personal spending power, and consequently outbound travel is growing exponentially.

• Investing ahead of the curve:

– Build demand.

– Accelerate the development of quality visitor arrivals.

– Assist de-risk entry for New Zealand industry.

So what are we thinking?

$44.5m over four years

Strategic direction – India

Trade/Industry

• Trade activity to focus on Delhi, Mumbai, Bangalore, Hyderabad, Chennai, Kolkata.

• Market development programmes to launch with 10 key partners across India including premium agents.

• Increase India buyer presence at TRENZ. • Introduce 100% Pure New Zealand

Specialist Programme. • Expand airline partnerships. • Increase focus on incentive market. • ‘India ready’ workshops for New Zealand

industry.

Consumer • Active Considerer research. • Launch 100% Pure New Zealand

campaign activity in Delhi and Mumbai to drive preference.

• Leverage CWC2015. • Extend India edition of

newzealand.com. • Increase PR agency outputs including

more targeted media famil trips. • Identify and secure a Bollywood/TV

production. • Identify and secure opinion leader.

Organisation & Structure • Increase investment from <$1.0 million p.a. to $3.5 million for FY14. • Increase people resource in Mumbai office.

Strategic direction – Indonesia

Trade/Industry • Establish JV campaigns with main air

services providers. • Launch co-op marketing with Indonesian

trade and increase buyer presence at TRENZ.

• Introduce 100% Pure New Zealand Specialist Programme.

• Promotion of relevant NZ product to the market, with emphasis on the provision of Halal products in itineraries.

• ‘Indonesia/Halal ready’ workshops for NZ industry.

• Work with INZ to streamline visa processing.

Consumer • Active Considerer research. • Launch 100% Pure New Zealand

campaign in Jakarta. • Appoint a PR agent and upscale PR

outputs such as famils and use of opinion leaders.

• Develop and launch a Bahasa Indonesian edition of newzealand.com.

• Investigate leveraging social media -Indonesians are heavy social media users.

Organisation & Structure • Increase investment from <$0.5 million p.a. to $3.5 million in FY14. • Introduction of in-market people resources.

Strategic direction – Latin America

Trade/Industry • Engage with key trade partners

throughout region focussing on Brazil, Chile, Mexico and Argentina.

• Extend Virtuoso relationship from North America and consider other premium consortia (to reach premium traveller).

• Introduce 100% Pure New Zealand specialist programme.

• Collaborate with INZ and ENZ to grow education and WHV opportunities.

Consumer • Active Considerer research, which

will assist to confirm key target segments (suspect luxury and youth will feature).

• Launch 100% Pure New Zealand campaign.

• Commence PR programme, including leverage of: • FIFA under 20s (2015) • Four Nations Rugby Tournament

• Launch Brazil, Mexican and Chile newzealand.com editions.

Organisation & Structure • Increase investment from <$0.1 million p.a. to $2.0 million in FY14. • Best short term and long term resourcing approach being determined.

International business events

• Business event visitors generate high spend per day and help New Zealand businesses create international connections.

• Asset base to grow substantially (Auckland – just confirmed, Christchurch and Queenstown), a step-change in New Zealand’s ability to attract larger scale IBE’s.

• Long lead in times require promotion of New Zealand as a compelling IBE destination.

• TNZ already generating strong results from current activity.

So what are we thinking?

$34m over four years

– Promotion of New Zealand as a compelling destination for IBE in Australia, USA, China and South East Asia (particularly India, Indonesia, Singapore).

– Development of in-market networks and securing leads for conversion by the NZ industry (including in-market business development, expansion of bid support and digital partnerships in offshore IBE sector).

– Partnerships with NZ industry to leverage private funding (including joint marketing, offshore road shows, deployment of an ambassador programme).

– Target IBEs in industries/sectors relevant to wider Government growth agenda.

Strategic direction: Business events

Premium travel sector

• Very high end travel is a niche globally that New Zealand is well positioned to further capitalise on.

• These visitors spend far in excess of the average visitor on a range of services.

• They have the potential to contribute to the wider economy through inward investment, education and immigration.

So what are we thinking?

$20m over four years

• Geographically dispersed target • Europe, incl. Russia, North America, Middle East, Latin America,

China.

• Activity focus on B2B trade development and relationship building, famils, events, IMP, selected high-end media outlets.

• Expand and up-weight consortia partnerships; i.e. Virtuoso.

• Leverage existing strengths - yachting, equine, special interest areas, education.

• Align with NZTE sector priorities, education, & business events.

• Highly coordinated approach with New Zealand industry.

Strategic direction: Premium travel

Lifting yield from core markets

• Specific areas identified where additional marketing efforts can lift the performance of current core source markets.

$24.5m over four years

Japan Leverage market recovery Further grow promising youth market

China Expansion of PKP Leverage of additional capacity in Hong Kong

Australia Target Western Australia Partnerships to extract greater value from cruise Promote cycling proposition

USA Leverage Hobbit premiere FY2014

UK Leverage Cricket World Cup 2015 Leverage Hobbit premiere FY2015

Summing up

• After some tough years, international visitors to NZ are now growing from most markets and forecasts are much improved.

• China and emerging markets will continue to become more important, but western markets also have growth potential.

• TNZ has a well thought through plan and the best-ever level of funding to tackle new marketing opportunities.

• There will be more investment for premium leisure travel, IBE, and emerging markets - and more for targeted projects in core markets.

• Working together, we can realise superior visitor outcomes over the plan period.

Nga Mihi