Air New Zealand targets the premium Chinese traveller.
Air New Zealand is playing its part in attracting an increasing number of higher-value Chinese tourists to this country and lifting the visitor spend.
"We are continuing to look at ways to bring more premium travellers [to New Zealand] — and create more value over volume," says Nick Judd, Air New Zealand's chief strategy, networks and alliances officer.
"We will never be the cheapest carrier in the market and we will never win the volume game against our Chinese competitors.
We can attract the premium traveller with more product and services and by extending our marketing reach.
"It doesn't have to be just the business class traveller — the economy traveller is prepared to spend more on value-added services," Judd says.
Over the past five years the market for Chinese visitors has changed completely. Judd says the large chunk of the market used to be low-value group shopping tours operated by "fairly poorly-run operations. They'd be chaperoned to a warehouse in South Auckland to buy wool and manuka honey products.
"Some shopping tours are still coming through but there are more free independent travellers — couples and family groups — who provide a reasonable yield. Some dual destination travellers who come through Australia wish they had more time in New Zealand," says Judd.
The Chinese visitor today is savvy. "They do more research and know a lot about the destination — even more than some New Zealanders do," says Judd. "For example, they visit waterfalls outside Kaikoura where the seals go to play."
Free independent travellers stay an average five to seven days compared with the group tours of one to three days. "That's the success area — free independent travellers stay here longer and spend more than the Australian visitors."
For the year ending October 2018 there were 451,000 Chinese visitors, up 10 per cent, still way below the 1.48 million Australian visitors. But the Australians spent a total of $2.55 billion, down 1 per cent, compared with the Chinese spend of $1.63b, up 14 per cent.
China is New Zealand's second biggest visitor market, ahead of United States with 344,000 visitors and Britain with 234,000. The Ministry of Business, Innovation and Employment is predicting 800,000 Chinese visitors by 2024, spending a total of $3.06b. Australian visitors would reach 1.8m, spending $3.02b.
Air New Zealand, which has a 13-strong sales and marketing team based in Shanghai, is working more closely with online travel agencies such as Ctrip to attract the premium Chinese traveller.
"You definitely have to have online travel agents at the forefront of your strategy and utilise their marketing skills, reach and data," says Judd. "They know all about the spending and purchasing power of their customers."
Air New Zealand last year formed a partnership with iQiyi, China's leading online video platform, and became the first airline to introduce an inflight entertainment system specifically for the Chinese traveller. It won a best marketing partnership award in China.
"Whatever is current and a hit in China we get it onboard and serve it up," says Judd. "A reality travel show involving pop stars was filmed in New Zealand and had 52 million social media followers. This is an example of the marketing reach we can achieve — it's far greater than what we can generate ourselves."
After the Christchurch shootings, Air New Zealand directed its sales team in China to talk with local travel agencies and seek feedback about whether bookings will drop off. Based on that feedback the airline will decide if it needs to increase its marketing.
"Hopefully the bookings will hold up," says Judd. "We want to get out and be proactive and mitigate the risk. We will work with Tourism New Zealand and the Government to get reassuring messages out that New Zealand is still a secure and safe place to travel in and it welcomes visitors.
"If we sit back and let it become a big issue, then it might have a detrimental impact. One effect is that the (Christchurch) incident has forced a conversation about being more welcoming and more open to different cultures.
"Maybe people here will be more welcoming to tourists and that's great for the industry. We've seen peaks and troughs from other incidents (such as the Christchurch earthquakes) and the market has recovered. We just need to manage it confidently," says Judd.
Air New Zealand has developed a strong network between China and Auckland — forming alliances with Air China through Beijing and Cathay Pacific through Hong Kong as well running its own daily flights to Shanghai. "We have more than enough capacity to bring the Chinese visitors to New Zealand," Judd says.
Air New Zealand wants to extend those services by making Auckland a hub for Chinese travellers heading to South America. It would be a shorter, more comfortable journey for the Chinese and strengthen Air New Zealand's presence in China.
"We can be part of the One Belt One Road economic strategy that provides trade and air links between China and South America through New Zealand," says Judd.
But first Air New Zealand must negotiate consistent departure times from Shanghai. "We've been flying there for 12 years and never had the same departure time for the seven days in the week. Five days are the same but Wednesday and Friday are different," Judd says.
"We've made a little bit of progress but Shanghai has phenomenal requests for constrained resources and it becomes a balancing act."
Air New Zealand has an opportunity to push its case and seek a second landing slot when a satellite terminal opens at the Shanghai airport in September. It wants a mid-afternoon departure time seven days a week, arriving in Auckland early morning.
This will enable Chinese travellers and freight to connect with Air Argentina to Buenos Aires.
"There is a lot of demand between China and South America and we can see good outcomes," says Judd.
"It will help us supplement our South American services during the winter season and build a more sustainable base.
"When the Shanghai satellite terminal opens there will be a gold rush for airlines to get better (landing) slots. If I was a betting man, I think our chances are 50/50," says Judd.