Holiday Essentials

Autumn ‘What’s On’ campaign activity was launched in early February, with advertising on TV and other digital mediums such as screens in office buildings and the SunCorp stadium in Brisbane. The campaign kicked off with generic ‘Green and Gold’ television commercials (TVC), followed by regional commercials and then solo TV spots for both Wellington and Christchurch. A TVC targeting school holidays will also be included in the rotation. Partners featured in this campaign period include Christchurch/Canterbury, Wellington, Great New Zealand Touring Route and a group working under the Dunedin banner (including Waitaki and Southland/Fiordland).

In a new initiative, five ‘Green and Gold’ branded hybrid cars have been offering ‘Free Rides’ around Brisbane and Sydney. Consumers can ‘Get inside for a free ride’ and chat to hosts or watch a DVD about New Zealand.

‘Green and Gold’ training and product development famils are continuing with travel trade partners.

Airlines have already identified Tasman bottlenecks in 2008, with Meetings New Zealand and the Bledisloe Cup coinciding with returning traffic from World Youth Day in July. This may affect Australian attendance at both events.

Heavy discounting of long and medium haul routes continues as extra capacity is added to many Australia gateways; this is particularly the case for Asian carriers with Thai, Singapore and Cathay all increasing services.

South East Asian destinations are continuing to promote heavily off the back of the increased flights. Early Bird offers to Europe and North America are also being heavily promoted. Given the strength of the retiree travel sector, coach and cruise options are particularly prominent.

The second phase of Tourism New Zealand and industry partner advertising activity began in early January on TV, online and underground platforms. Weekly UK visitors to the newzealand.com website have doubled since advertising began.

New Zealand’s profile in the UK has been high in recent months, with the English cricket tour, David Beckham’s visit and Sir Edmund Hillary’s death all attracting media attention. Tourism New Zealand’s international media programme and other PR generated travel stories also appeared in prominent publications, including the Sunday Times Travel magazine, Tatler Travel Guide and Conde Nast Traveller. Some 30,000 Daily Telegraph readers voted New Zealand their favourite destination in the world, resulting in a huge increase in exposure.

Domestic travel is expected to be strong in 2008 due to the credit crunch. ‘Hot’ emerging destinations are predicted to be Colombia, Vietnam, Botswana and India. The US will continue to attract UK travellers, with the weak US dollar creating exceptional value for money. The 2008 Olympic Games in Beijing are also likely to boost UK visitors to China beyond 550,000.

Tourism New Zealand’s international media programme has been generating good results, including a Vox Wolkenlos TV programme about adrenalin activities in and around Queenstown, and a two and a half page article in Neue Zurcher Zeitung, Switzerland’s biggest national daily newspaper.

Air New Zealand reported a significant increase in traffic out of Germany off a small base.

The rising value of the Euro against the USD is resulting in increased visitors to the US, up by nine per cent from January to October 2007. Visitor arrivals to Australia increased by two per cent in the year ending November to 150,500 visitors.

The current slowdown in US visitor arrivals can be attributed to a number of economic and competitive factors. These include the relative weakness of the US dollar; fuel prices eating into household disposable incomes; a cooling housing market coupled with pressure on households to service increasing debt; a decline in consumer confidence; a volatile stock market and increasingly competitive air fares to other destinations, particularly to the UK/Europe with the looming open skies agreement starting in March 2008.

Despite these negative factors, cruise visitors from North America have reached record levels giving US arrivals a massive boost in January, up almost 15 per cent on the same period last year.

The International Marketing Alliance Roadshow in the US in November involved 12 regional representatives and included forums and training sessions with 18 wholesalers, online travel agents and over 70 travel retailers, and briefings from Tourism New Zealand’s media and PR agencies.

A coordinated campaign with airline, wholesale and on-line partners started in the US in January focusing on developing the shoulder season months of April and May.  Air New Zealand is offering a special net airfare to participating wholesale partners. The packages sold by wholesalers are marketed direct to consumers through retail travel partners and via newzealand.com. 

The US forecast points to a reasonably firm first quarter but weakening demand beyond that as a result of domestic economic conditions and declining consumer confidence. Summer results for Canada look positive, although there are signs of some softening as US conditions start to impact on that market.

While the exchange rate and fuel surcharges continue to make long haul travel out of Japan expensive, there was little reaction to lower pricing incentives from Air New Zealand. Agents are also reporting that higher yielding New Zealand holiday products are selling better than cheaper tours.

December arrivals were also affected by a scandal over Japan’s national pension scheme which is impacting on consumer confidence as more than 50 million people waited to see whether they will get paid.

Tourism New Zealand and trade partners joined forces with Air New Zealand Japan in a joint online promotion to improve sales for the April-June period.

New Zealand Paradise Week in November exceeded expectations, with 17,000 people attending the events in Tokyo and strong media coverage. This was the largest New Zealand event ever held in Japan.

New Zealand is not the only destination to be experiencing a decrease in Japanese visitors – Australia, Canada, Switzerland and Hawaii also experienced significantly fewer visitors last year. One notable exception was Macau, one of the star countries in the current Japanese outbound market, which recorded a 36 per cent increase in arrivals in 2007 over 2006.

Japanese outbound travel in 2008 is expected to be about the same as in 2007, due mainly to China which is expected to regain popularity thanks to the Beijing Olympics. Japan Association of Travel Agents unveiled its ‘Visit World Campaign’ for 2008, to help achieve its goal of 20 million Japanese outbound travellers by 2010 (up from 17.35 million). The campaign focuses on travel to East and Southeast Asia as well as traditionally popular destinations such as North America, Australia and Europe.

Factors contributing to the strong growth in Chinese visitor arrivals included the continuing strengthening of the local currency (the RMB) and strong consumer confidence

Tourism New Zealand will launch its first ever brand advertising campaign in Shanghai in late April that will be targeted at experienced high value FIT travellers.

Air New Zealand increased its Shanghai to Auckland service from three to five flights per week to meet the growing demand for travel to the southern hemisphere over summer. Air New Zealand also announced that two of these extra services would operate to Beijing instead of Shanghai from mid July 2007.

Australia was the main long haul destination for the outbound market in December and January. Mono-Australian package tour numbers increased by 30 per cent compared with mono-New Zealand package tours which increased by only 10 per cent.

Chinese Travel Agencies now face penalties under Chinese travel laws for forcing tourists to shop; if found in breach they may even have their business licenses revoked. Tourism New Zealand is enforcing a more stringent “Code of Conduct” applying to New Zealand based inbound operators handling ADS group tours.

A shortage of available air seats is the main factor affecting Hong Kong visitor arrivals. Load factors for flights between Hong Kong and Auckland regularly exceeded 90 per cent in November and December making it difficult for airlines to give enough seats to local travel agents for groups. Demand for Free Independent Travel is also being negatively impacted due to higher package prices at higher class airfares.

Local economic conditions and the cost of New Zealand package rates – 30-40 per cent higher than the same time last year - have affected the overall visitor arrivals out of Taiwan

Market trends include more Taiwanese passengers (90 per cent) travelling to New Zealand as the only destination, with just 10 per cent travelling to New Zealand and Australia. As this market matures, more people are looking for quality travel, as reflected in the South Island-only product gaining popularity

Arrivals were affected in part by group tour prices to New Zealand increasing sharply in October 2007. This was due to Korean Inbound Tour Operators dramatically increasing land fees to compensate for a sharp fall in income from shopping commissions.

Tourism New Zealand has completed FIT promotions with specialist agents wannatour.com, IOS and Segero and has facilitated blogs of holiday experiences on key travel and lifestyle websites (Naver,Daum, Empas and Paran).

Singer and actress Min Sun recently visited New Zealand with resulting profile on Food Channel, Olive Network and Ceci Magazine.

Major travel agents and budget agents both report forward bookings at slightly lower levels than last year. Positively, Korean Air’s mono-Australia strategy of putting a surcharge on Australia/New Zealand packages is likely to be waived completely by April. It has not been successful and the airline is concerned about slow business projections through to June.

Korean Air has announced commission cuts of two per cent effective from 1 April with huge losses expected for travel agents. The industry is asking for a one year delay to the introduction of this initiative.

Strong demand for travel to New Zealand was thwarted by a lack of seats, with consumers having plenty of options for competing destinations.

Tourism New Zealand has just completed a major broadcast media project called ‘New Zealand on Wheels’ with Channel 5 which has resulted in four 30 minute programmes on key tourism regions of New Zealand. The aim of this project has been to grow self-drive interest.

Singapore Airlines has introduced increased frequency of services on the Singapore to Auckland route, with 18 per cent more flights now scheduled in 2008.  The Singapore to Auckland route will now have double daily services on a year round basis.

Budget carriers from Singapore and Malaysia are operating increased services to Australia, including Tiger Airways, which has increased their services to Darwin from four times a week to daily.

Continuing good performance out of the incentive market and the independent and self-drive markets contributed to the good growth in arrivals in 2007. The national elections, a slowdown in outbound travel after the October school holidays and a decrease in consumer confidence due to rising fuel prices impacted negatively on visitor arrivals in the last two months of the year.

Tourism New Zealand, Malaysia Airlines, 16 Kiwi Specialist agents and Krungthai Card launched an ‘Autumn Promotional Campaign’ in early February to promote travel to New Zealand during April-June. The campaign includes advertisements in magazines and newspapers, media releases and Tourism New Zealand tour shells.

Singapore Airlines reported very tight air capacity to New Zealand during December to February, despite increased frequency on the Auckland route. Local wholesalers confirmed several bookings (on all airlines) had to be cancelled as they couldn’t get seats.

The Indian market has struggled to maintain its growth momentum across the full year because of higher airfares and a severe shortage of air seats over both South East Asia and Hong Kong routes to New Zealand in November and December.

There is some nervousness about a US slowdown affecting the Indian economy. Local stock exchanges went into a tailspin in January over fears of a recession in the US economy, but bounced back after the US Federal Reserve made cuts in interest rates. The property market has started to ease and business confidence has become more subdued.

Tourism New Zealand held presentations at several tour operators annual training events, with 282 agents attending.

There is some positive movement on the airline front. Malaysia Airlines released a special airfare to Auckland for travel in April to June while Singapore Airlines offered a special fare to Christchurch for Thomas Cook and CIAL promotions. A new air service agreement between Hong Kong and India was signed in December which will improve access to a key gateway point for New Zealand. As a result Cathay Pacific announced a huge increase in their flights to Mumbai, Delhi and Chennai. Air India will join the Start Alliance network next year.

Niche is the latest buzzword in the Indian market and the dominant traveller profile is FIT. Mere trips to Singapore, Thailand or even Paris and London are no longer sufficient, instead specialised tours like music cruises, adventure trails, spiritual getaways and health tours are a major pull.