Tourism welcomes $30m top-up

Down under: <i>America's Top Model</i> host Tyra Banks during filming here. Photo / Supplied

Extra funding still has to be used cleverly to be effective, warns expert

The tourism industry has welcomed the Government's $30 million funding boost but a marketing expert warns it is not big money and it will need to be spent cleverly.

Prime Minister John Key, who holds the tourism portfolio, announced the new funding yesterday at the New Zealand Hotel Industry Conference in Auckland.

Tourism New Zealand will get $25 million to market the country as a tourist destination overseas in key places such as Australia, China and the United States, with another $5 million allocated for joint ventures initiatives with regional tourism organisations.

"It will bring our total investment to just under $100 million this year," Key said.

"The fact that we're boosting investment in tourism reflects my confidence in the industry to substantially increase the value of tourism to our economy."

The extra funding would be for one year at this stage, he said.

Martin Gillman, partner at media consultants MGCOM, said $30 million would be a big advertising account in New Zealand, a reasonable size in Australia but tiny in a market the size of America.

"What they've got to do is to be very focused on doing a few things well rather than trying to spread it too thinly," Gillman said.

Tourism New Zealand chief executive Kevin Bowler said the organisation had a marketing alliance with Air New Zealand in the US.

"The most recent thing we did is brought America's Next Top Model down to New Zealand and shot three episodes," Bowler said.

The first two episodes each got about 3.5 million viewers in the US, with the final episode due to air last night, he said.

"It's a relatively cost-effective way of reaching a lot of people and getting a lot of depth about the country," Bowler said.

"The operating belief that we have is that if we can continue to demonstrate that the additional investment is returning favourably to New Zealand then we're in a strong position to continue to grow what's put into tourism."

Tourism Holdings chief executive Grant Webster said the new funding was fantastic.

"As an operator, the Prime Minister has given us the tools. We now need to prove, and Tourism New Zealand need to assist in proving, that we can actually deliver a really good return on that for all New Zealanders."

Inbound Tour Operators Council chief executive Paul Yeo said the council met Bowler this week and discussed opportunities and partnering.

"That's where many in the private sector are really pleased with not only the new money but the direction and the marketing plan of Tourism New Zealand to embrace possible partnerships offshore because the private sector is keen to spend some money in tandem."

Tour operators were happy with the extra funding but were anticipating a bit of pain in next week's Budget, with the possibility of an increase in GST, Yeo said.

"If that happens next week then that's going to be a real challenge for our industry," he said.

Tourism Auckland chief executive Graeme Osborne said the funding offered an opportunity to continue work started in China and the US.

China had dipped a little in the last couple of years but would come back, and in a rush, Osborne said.

"We really need to be putting New Zealand in front of Chinese people as a visitor option," he said. "We've never really hit the sweet spot out of the US and there's a really big commitment in there at the moment between Air New Zealand and Tourism New Zealand and so the extra vote [of funding] that can be applied to the US we think is extremely timely."

MONEY SPINNER
Year ending March 2009

* $9.3 billion economic contribution from international tourism expenditure.

* 16.4 per cent of total export earnings from international tourism expenditure.

* 9.6 per cent of the workforce is supported by tourism.