It’s survival of the fittest in the NZ tourism industry, where some regions struggle for visitors while our biggest hotspots can hardly cope – all while our government resolutely rejects a tourist tax to help fix the places worst affected by the visitor onslaught. Little wonder New Zealanders increasingly feel that tourism is getting out of control, writes Peter Newport.
Sometimes things come down to a good old-fashioned, gloves-off, bareknuckle fight. That’s what’s shaping up between tourism bosses and local councils in one corner and the government in the other. It’s a scrap that could influence not only this year’s election but the future of our economy, our sense of national identity and our international reputation.
The problem is that governments all over the world see tourism as a cash cow. In our case tourism is especially tempting for the government to use as a bank because our second biggest export industry, actual cows, is subject to all sorts of overseas uncertainties and new competition that we can’t control.
So what is it that has our local tourism bosses and councils so unusually and dangerously upset? It’s the fact that government keeps taking from the tourism pot without giving enough back. After all we’re talking over 200,000 jobs and almost $35 billion in income. This morning the government announced a new $102 million Tourism Infrastructure Fund; it’s an open question how much that will help.
In a series of interviews with The Spinoff the people who actually run our domestic and international tourism industry explain why the wheels might fall off and what can be done to stop that happening.
Here’s a really important fact. Domestic tourism – that’s Kiwis travelling in New Zealand – is worth more ($20 billion) than international tourism ($14.5 billion), so not only is it our country, but we spend more than overseas visitors. In some ways we’ve been tricked into thinking that tourism is an exclusively overseas issue that only the “trust us” industry experts and government can understand.
Tourism is really about us and the story we want to tell the rest of the world. What follows is a series of portraits of our tourist centres.
Tekapo: A little church, surrounded by chaos
Tekapo is a small town near Aoraki Mount Cook on the main drag from Christchurch to Queenstown. Around a gazillion people stop here every day to take pictures around the famous little church, use the toilets, get petrol and buy a pie. The government famously believes in markets, so the national tourism investment in Tekapo is pretty much non-existent and various commercial tourism players have been encouraged to have a go. The result is a mess: used toilet paper in the town centre, mass market hotels aimed at overseas tour groups, and some restaurants that would reduce any decent chef to tears, let alone a tourist looking for a reasonable meal at a reasonable price. It’s a total disgrace.
It’s worth going into some detail because the rest of this story all relates back to Tekapo and what it represents.
I stayed there recently because I wanted to see the stars. Tekapo does host at least one decent business and that’s called Earth and Sky. It’s a bus trip, at night, up to the Mount John observatory to look through some big telescopes and learn some interesting stuff about planets and the universe. It’s expensive at $148 per person but still good value.
Tekapo is in the centre of the world’s biggest Dark Sky Reserve, although from the top of Mount John the town’s lights burn bright like a cheap used car lot trying to attract attention. Someone should get that fixed.
But what they also need to fix is everything else about Tekapo. The famous little church is surrounded by an untidy throng of camper vans and swarms of people taking pictures of themselves, the church and each other, in that order. You can hardly see the church through the chaos.
There is literally used toilet paper in the main street, the pay toilets don’t work and the accommodation is a rip off. We stayed at Peppers Bluewater Resort – the only available room in town. I negotiated a Deluxe room down from $280 to $250 – no breakfast. No view either and certainly no hospitality. Many guests seem to hide in their rooms at night with some instant noodles and cheap booze from the local Four Square. I had asked for a room with a view, but was told that those rooms were mainly reserved for overseas bus tours because “they like to stick together.”
I can’t help being honest so when I was asked by the cheery staff member on check out if I had a good stay, I said “No”. Out came front office manager Rod Kentish and to my surprise he could identify with my view of Tekapo. “Other people have said to me it’s a dog’s breakfast,” said Kentish. He blames the local council and says all his staff have to live 40 kilometres away in Fairlie because you can’t get a house locally for under $500,000 due to new residents wanting to turn it into a New Wanaka, just without the good stuff that Wanaka has. I checked TripAdvisor and the views of Peppers in Tekapo were similar to my own. Too expensive for New Zealand travellers and a pretty underwhelming experience overall.
We left Peppers to the sound of screeching brakes and a cloud of tyre smoke as a camper van pulled out onto the main road without looking, almost killing us, a number of other drivers and two intrepid cyclists. I decided to call the council for a chat about Tekapo.
Garth Nixon is the community facilities manager for the Mackenzie District Council. He sounded as though he knew what he was doing but told me that there’s little money from their tiny ratepayer base to keep Tekapo clean and tidy, especially considering the onslaught of thousands of tourists every day. He talked about some new government infrastructure loans, but of course that is all more debt for the council. He talked about the famous little church and sounded sad that it didn’t look as good in real life “as it does on TV”. I asked if the council was thinking of keeping the camper vans and cars away from the church and Nixon said that was part of their plans, if they could find the money.
And so began my investigation into our booming tourism industry. Who plans? Who pays? Who gives and who takes? Big questions with some surprisingly honest and fascinating answers from people who might be expected to be fluent only in consultant-speak. But first, proof that good tourism can be a win for everybody involved.
Hobbiton: It can be done right
It’s worth acknowledging that it’s easy to attack a government. They must get sick of it. But just to prove that tourism can be done right there’s Hobbiton near Matamata. This re-creation of the Shire reflects everything that is good and decent in the Lord of the Rings and Hobbit movies, plus of course the original Tolkien books.
Hobbiton’s story provides clues on how the government could model the future of tourism in New Zealand. Russell Alexander is the founder of Hobbiton and is as authentic a Kiwi as you’ll ever come across. He does not use any consultant-speak and I doubt he’s ever even considered using a tourism industry consultant. He’s ploughed tens of millions of dollars into what used to be the family farm, and used his experience as an accountant to balance the books. Most of the money has come from re-investing income and profits back into the business. But most importantly he’s delivered an experience that is not overcrowded, that is authentic and that is supported by the local community of Matamata. In fact Hobbiton has been the making of Matamata.
Alexander and his marketing manager Shayne Forrest regularly visit over 30 countries each year to promote Hobbiton. It’s hard work. But they have decided to limit the annual ticket sales to around 550,000. They could sell more, but don’t. The reason? They don’t want visitors to have other visitors in the background of every photograph. They don’t want people to feel rushed or uncomfortable. They want their staff to have the time and space to build a proper relationship with the visitors.
Alexander started the business after a fact-finding trip to the theme parks of Florida. He came back unimpressed and pretty much did the opposite of what he’d seen. He was determined not to over-commercialise or cheapen his part of New Zealand. I asked him for his view of the future of New Zealand tourism.
“As we get bigger, the challenge gets bigger: how do we maintain what put us on the map in the first place – our landscapes and our people? Authenticity has become an overused word in tourism but we must be authentic and we must back it up with real experiences. We can’t destroy our landscapes and how can places like Queenstown be authentic if there are no New Zealanders there?”
Queenstown: A town crying out for a tourist tax
I’ve interviewed Graham Budd before. The organisation he heads, Destination Queenstown, gets around $3.5 million a year from the local council to promote Queenstown. Here, at the sharp end of the NZ tourism industry, things are not flash; the offices are not ostentatious. Here the algorithms and the data are in charge – one big set of numbers to rule them all.
It’s not easy to be popular when you are promoting a destination that some people think would be full even if you did nothing. Local media recently reported that Budd forbids us to say Queenstown is full, just busy. Today though Budd is on form and unusually passionate, even aggressive (in a nice way) about his mission.
“We’ve been caught short, nationally, on infrastructure,” say Budd, “very short”. He points to over 30 years of government under-investment in infrastructure, against a background of tourism numbers which have pretty much increased every year. We should have seen it coming.
I ask if Queenstown, like Hobbiton, could come up with a number that represented the optimum number of visitors. In other words, a number where Queenstown could cope and where all the visitors would have a good experience.
“We could do that, sure,” he says. “We could definitely come up with the right number.” It’s clear that number would be less than the current two million people, who collectively bring in $2 billion revenue, much of which ends up as GST in the Government Consolidated Fund – the bucket of Wellington cash that pays for everything. The same two million visitors are pushing Queenstown to breaking point in terms of clogged roads, overcrowded expensive rental housing and a lack of economic diversity in the local economy. The locals are leaving.
I ask if that magic, ideal number of tourists could be delivered. “I don’t think we could do that. I think that would be impossible,” says Budd.
I ask why. “The stakeholders would be the reason.”
And there you have it. The stakeholders are the government and the multiple tourism businesses who depend on sheer numbers to keep the dollars rolling in. We can’t turn the clock back. It’s too late.
There’s more to my conversation with Graham Budd. He’s optimistic about the future because he believes we will find a way to become more authentic, just like Hobbiton’s Russell Alexander says we must.
“Our identity needs to belong to the local people,” he says.
We talk about the need for single credible identity. We talk about the conundrum of Queenstown’s brand currently being somehow a reflection of the visitors. It’s a tourist town and that’s how it’s sold. It becomes a self-perpetuating situation anchored in its own myth. It delivers the cash but the multi-billion-dollar question is whether it will continue, or whether it can continue. Queenstown delegations have recently come back from overseas car-wreck resorts like Aspen and warned that social meltdown is just around the corner.
I ask if there’s a country or place that has got it wrong, badly wrong. “The Unites States scrapped their national tourism agency for quite a few years and the tourists stopped coming.” We both find this funny because it seems sort of obvious. But it is worth understanding that overseas tourists really do stop travelling if we don’t market ourselves to them.
And is there somewhere that gets it right? “Switzerland. They know exactly who they are and that’s what they promote.” We talk about Zermatt, near the Swiss alpine border with Italy, which bans cars and only has horses in the middle of the town. It’s a tourists’ dream come true. “And they have this bloody great car park right out of town,” says Budd, “where everyone has to leave their car. Then the hotel sends free electric powered shuttles to pick them up.” It’s a misty-eyed vision of what Queenstown could have been. “They’ve also got bloody good roads and bloody good trains,” he adds. “If I had a vision for Queenstown it would be exactly that.” The phrase ‘reassuringly expensive’ pops into my head.
I ask about the government and their approach to the tourism industry. “There’s been quite a lot of rhetoric but only a small amount of money.” A visitor tax, is that the answer? Deputy PM and tourism minister Paula Bennett and finance minister Stephen Joyce have both soundly rejected the idea.
“There so much evidence from around the world, it’s not funny, visitor taxes don’t stop tourists. Visitor taxes have never put anybody off going to a place – ever. The taxes are easy to collect and don’t put pressure on taxpayers or ratepayers. It’s the perfect political solution” says Graham Budd. Southern tourism mayors have just written to Prime Minister Bill English saying exactly the same thing.
Budd adds that a $5 visitor tax in Tekapo could produce $5 million a year from the bed nights it currently sells. That should be enough to start fixing the place up.
Rotorua: Telling new stories
After Queenstown, Rotorua is our next most iconic tourist destination. Tourists spend $772 million and over two million bed nights each year in amongst the boiling mud and steaming, alien geothermal reserves. Michelle Templer is the town’s new tourism boss, fresh from roles as NZ Trade Commissioner in London and sector manager with NZ Trade and Enterprise. She’s clearly proud of Rotorua but I have to ask if the huge tourist numbers have damaged the cultural integrity of the place. “That’s an interesting question, but I think the answer is no. The reason I think is that tourists have been coming here for over 100 years, so there’s been time to get things properly organised, to get the balance right.”
Is there room for even more tourists? “Yes,” says Templer. “But the growth will be in new journeys. Not physical journeys but stories about where we have come from, experiences and history. There are new entrepreneurs who are experimenting with ways to tell these stories, to take people on new journeys.”
It sounds a bit like tourism industry jargon but I do understand exactly what she means. It sounds authentic. It sounds like Rotorua knows its own identity and will build on that foundation.
Templer admits that housing costs and infrastructure pressure are a problem in Rotorua, but says they are manageable. She stresses that Rotorua wants premium visitors. People who want to listen and experience the real Rotorua story. People who will spend time and money in order to understand what Rotorua is – not just now but in the context of New Zealand history and Māori culture. She won’t be turning away the busloads of overseas tourists that turn up every day, but she will be encouraging them to stay longer and listen more carefully.
There’s another question I want to ask Templer. Tourism New Zealand has a new boss, Stephen England-Hall. What does she expect from him? She laughs, somewhat nervously, as she’s reluctant to put any unseemly pressure on our new tourism supremo. “I guess we want to be challenged, to be pushed. We are keen to explore the need to manage tourism, to go beyond marketing.”
I also ask what she thinks of Hobbiton and Russell Alexander. “He’s the real deal,” she says.
Maybe there’s a role for him in terms of managing all of our tourism?
Tourism NZ’s Stephen England-Hall: the cautious marketing man
Stephen England-Hall has only been Tourism NZ CEO for a month and this is one of his first media interviews in the new job. He comes across as young, smart and sensitive. No surprise given that his background is in digital marketing and social media. For the past three years he’s been the boss at Fly Buys but he’s also worked in London, Toronto and New York managing teams in the online marketing space. He’s in charge of a $117 million government budget to sell New Zealand to overseas tourists, so logically he can’t be seen to be biting the hand that feeds him.
England-Hall has a bit of the prime minister in training about him, admitting there are problems and hinting that something will be done, but by someone else. Take the visitor tax for instance. He bats the question away saying that tax policy is not his job.
He’s interesting on the subject of our 100% Pure advertising and branding. He says it does not mean that New Zealand is pure in the environmental sense, but that people will have a 100% pure experience by coming here, in the sense that those experiences can’t be had anywhere else. I ask if overseas tourism agencies are aware of domestic media coverage of dirty rivers, overcrowded national parks, tourist road accidents and used toilet paper littering the landscape.
“There’s no such thing as domestic media anymore,” he says. “All media is global. So we as citizens, the tourism industry and the media we have to be careful about that. It’s a national responsibility. What we say about where we live lands in the world.” Hmm. That sounds a lot like he’s suggesting real problems need to be kept behind closed doors.
I ask if we should have the courage to back ourselves by charging more, become a bit more Swiss, a bit more expensive so we can look after what we’ve got. “That’s a very complex discussion we have to have. In my first three to four weeks in the job it’s a subject that everyone at work is talking about. It’s also a discussion that’s happening in the media, in government, in the industry. It’s probably happening at every single barbecue in the country. So it’s probably about time that conversation saw some light.”
OK. But being more expensive goes directly against the position of tourism minister Paula Bennett, who refused the widely supported idea of a visitor tax, saying that we’d become too expensive.
I ask England-Hall if he thinks, personally, we should become more expensive, and charge the overseas tourists more. “That’s a tricky one because having a single expensive, exclusive policy could be detrimental to the long term sustainability of our tourism industry. I love the fact that high net worth individuals can come here and pay through the nose and have a premium experience but that backpackers can also come here and enjoy what is arguably a more real experience.”
Tourism minister Paula Bennett: the woman in charge
When Paula Bennett started the job as Tourism Minister, she was given a briefing document dated December 20th, 2016. written by the Ministry of Business, Innovation and Employment. The document states as fact, not as a point for discussion, that our tourist numbers will increase to 4.5 million a year by 2022, up from 3.1 million in 2015. That’s another 1.4 million tourists being invited when our current infrastructure is not coping, but the document points out to the new minister that the visitor spending increase equates to 65.5% more cash in 2022 than in 2015.
The document states “government’s role in relation to the [tourism] sector is not straightforward.” The document is heavily weighted towards the big tourism companies and even reveals a plan for all agencies linked to tourism to give each other a heads up when a big media enquiry comes across anyone’s desk. Large parts of the briefing document have been redacted from public view under the Official Information Act, including Section 57 ‘Tourism Infrastructure Reports’. The whole document reads like a licence to print money, with huge areas left blank to protect us, the public, from tourism’s dark secrets. What can be so secret about tourism that it has to be officially hidden from view?
I had asked Stephen England-Hall about Tekapo. Who fixes that small, tourist distressed town under the shadow of Aoraki Mount Cook? “The situation in Tekapo is not good for anybody, but it has to be a multi-agency solution. It’s a fascinating and complex problem. Problems like this are right at the top of our agenda.” Here he’s referring to conversations being held by a combined Chief Executives Group that includes MBIE, DOC, NZTA, The Department of Internal Affairs, Ministry of Culture and Heritage, The Ministry of Transport and Tourism NZ, as well as a representative of the Department of the Prime Minister and Cabinet. The group meets once every two months. Good luck Tekapo.
It’s worth saying though that there is mention in both the briefing document and Tourism NZ’s current four-year strategy of what’s called a social licence. That means that we Kiwis must (preferably) be OK with all of these extra visitors. We have to like and support tourism.
Well, that could be tricky given the way things are going. I asked for an interview with tourism minister Paula Bennett and sent her office some of the questions that The Spinoff wanted to ask. We got the following statement in reply:
Tourism New Zealand recently released their updated strategy which will focus on quality over quantity: attracting more high-value visitors to see more of New Zealand during the shoulder seasons.
We can take more – countries of a similar size like Ireland get 10 million visitors a year – but we do recognise there are areas around New Zealand, especially smaller councils, that need some help accommodating strong tourism growth.
I do see a role for Government to support those councils, especially ones with a low ratepayer base and high visitor numbers. We’ve established the $12 million Mid-sized Facilities Grant Fund and the first $3 million round co-funded 14 infrastructure projects for councils around New Zealand. An additional $5.5 million round has just closed and we’re looking to fund another twenty or so projects from the strong response.
I’ve previously said we aren’t looking at introducing a tourism levy or at tagging GST for redistribution, but we are currently looking at how else Government can support tourism infrastructure for those councils that are financially constrained.
100% Pure New Zealand promotes New Zealand’s tourism – the combination of landscapes, people and activities that are unique to New Zealand, they 100% Pure New Zealand [sic]. It’s an award-winning campaign that is working brilliantly for New Zealand with record growth in visitor numbers. It’s not, and never has been, an environmental measure.
Back home to Queenstown
I decided to finish this story in Queenstown, where I live. Graham Budd had said so much that had triggered questions about tourism, who we are and where we are going.
He told me that the Regional Tourism Organisations, of which Destination Queenstown is just one (there are 30), actually compete with each other for tourist visits and dollars. These RTOs are partly funded by local councils and they do most of the grunt work at the coal face of tourism. Budd’s point is that it’s hard to have an actual national tourism policy, and to actively manage tourism, if the Regional Tourism Organisations are scrapping over visitor numbers in a free market fight.
What he’s hinting at is the “i” word – Intervention. Government intervention. There’s a strong argument to be made that the free market model of allowing RTOs and the powerful tourism operators to compete for tourists is producing an unhealthy, unbalanced tourism landscape. The visitors basically go to the places which shout loudest. Having an international airport is also useful. And of course that puts huge pressure on a small number of hot spots and leaves other places, with small regional airports, virtually deserted. There’s little practical, strategic leadership. Scant evidence of real management.
The strategic documents produced by Government agencies recognise that this lack of balance, or as they put it “dispersal”, between “gateway” and “non-gateway” regions needs to be fixed – but it’s going to take management, not marketing, to produce a clear result.
In the early days of tourism the government did everything, including building and running hotels as the Tourist Hotel Corporation. Waitomo, Te Anau, Ruapehu, Milford Sound – all had their THC Tudor-fronted, chateau-style (or 1960s chrome and glass) hotels complete with silver service dinners and uniformed staff. Then came the free market model that pitches region against region and encourages a survival of the fittest, dog-eat-dog mentality. The same model makes it really hard for the small, authentic tourist operators to survive in a market driven by bureaucracy, compliance, marketing contributions and the sheer cost of being in business. There’s now even overseas ownership of our tour bus companies and souvenir shops. It feels like tourism is getting away from us, out of control, while the government is dazzled by the GST and the sheer volume of people coming here from overseas. The government seems addicted to the massive tourism income with little attendant investment or management.
But in chatting with Queenstown’s Graham Budd, Russell Alexander at Hobbiton and Michelle Templer in Rotorua, the same theme keeps emerging. We need to manage tourism. Marketing is just one aspect of the industry, but that’s almost all we do as a nation. It brings to mind the image of a garden which is having plenty of seeds and water thrown at it but there’s no gardener in charge to make sure everything grows coherently.
Overseas there are agencies that look after national assets – places like The Church of the Good Shepherd in Tekapo. There would be car parks, a nice café with scones, controlled ticket sales, educational tours, a free high quality brochure and some tasteful souvenirs. Here we have a meeting of government agency chief executives once every eight weeks to have a conversation about it.
Graham Budd’s comments further reinforced the view that while our government might be good at shipping tourists into New Zealand, the difficult work is carried out and paid for at a local level, in effect by ratepayers. But the resulting benefits, most of the cash, ends up in Wellington.
Visitor tax or no visitor tax, the question of local tourism benefits seems like the big ticking time bomb that government needs to address pretty soon. The social licence won’t be fulfilled if real New Zealanders don’t see direct, local payback from the tourism industry that we pay for. The social licence won’t be fulfilled if New Zealanders can no longer afford to actually live in the tourism hot spots. The tourists will stop coming if we are not an authentic destination.
100% Authentic might be a better future campaign slogan to aspire to.
For the final word it made sense to talk with some real tourists. I found a group of four Australians standing on the corner of Camp and Church Streets in Queenstown on a stunning clear, frosty morning. Queenstown looked like a High Definition 4K live tourism video feed jointly produced by Sir Peter Jackson and James Cameron.
The Aussies were in their late fifties or early sixties, and were from Melbourne. They seemed well groomed, well educated and were dressed in expensive merino clothes. Perfect tourists, fitting Tourism NZ’s various well-crafted digital marketing strategies and conversations. It was their first time to New Zealand, which seemed surprising, but there are clearly better places in the world for these people to have travelled to so far.
How long are you here for?
“Three to four weeks, arrived eight days ago”
What do you think of New Zealand so far?
“Great love it. We’ve been touring the South Island. Beautiful, safe, reasonable value for money. Friendly people.”
“No. Not at all” (The group then has a communal think).
“But where are all the Māori people?”
Then the Aussies start to list some other things that puzzle them, a bit like the famous ‘What Have the Romans Ever Done for Us?’ Monty Python sketch.
“We can’t find a museum in Queenstown. We don’t know anything about the history of this place. Why is it here? Where did the people come from? Did the Māori people get driven out? Was there a battle or a fight that drove them away?”
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I found these questions hard to answer and asked instead where their next stop was. The answer came in unison:
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