Free-for-all in tourism has big downside

Rob Fyfe

Rob Fyfe is quite clear: The tourism industry is at risk of becoming complacent and needs to find a renewed focus after five years of success.

"If you take a view out to 2012 ... projecting a tourist growth rate of 6.9 per cent (the average annual growth between 1998 and 2005) and compare that with the projected annual growth of just 4 per cent, the difference by the time you get to 2012 is more than $2 billion in increased annual tourist expenditure ... That feels to me like a prize really worth chasing at a national level," says Fyfe, Air NZ's chief executive.

While there had been good growth in the past decade, it was largely off the back of a series of event-driven opportunities such as the America's Cup, the Lions rugby tour and The Lord of the Rings films.

"We're seeing tourism starting to slow gradually now. That reflects that while those events have been great, there hasn't been any underlying sustainability."

Tourism NZ's "100% Pure" campaign had been valuable but that had been in the market for some time now.

"I think we are seeing a lack of refreshing of our branding in our offshore markets," Fyfe said.

"And there has been a lack of focus in some of the growth markets as we've tended to focus more on the tried and tested markets - like the United States, United Kingdom and Australia."

Air NZ has staked a lot on developing new tourist markets. It is investing about $150 million a year on its new direct flights to Shanghai.

Fyfe said the pressure was on to ensure those tourists had a good experience.

"If we don't manage that well as a nation, we could bring a lot of Chinese tourists down to this part of the world and they could have a poor experience - because they are dumped in buses and tripped around various souvenir stores and go home and say, 'That wasn't that much fun, I prefer to go to Europe and do my shopping'. And you could destroy a market of huge potential."

The sector lacked the kind of organisation and focus applied to other export industries and more focus was needed at a Government level and right across the industry.

"To be honest, it's a free-for-all out there," Fyfe said.

"If this was dairy, or apples and pears or kiwifruit, we'd have strict quality criteria to control how our product was marketed offshore to ensure nothing was done to undermine the integrity and quality. Without that kind of quality control, New Zealand's reputation is vulnerable."

It was left to the individual boutique operators to determine the quality of experience that tourists received, he said.

"It makes me nervous that it is a totally unregulated environment with little quality control.

"There are some great operators out there. But there is no constraint on lower-quality operators coming into the market."