Spending money to make money

By SIMON HENDERY

Tourism New Zealand chief executive George Hickton must have thought Christmas had come early this year.

Over the past three years, while at the helm of the Government's tourism marketing body, he has quietly but persistently reminded politicians of the economic importance of the sector.

This week those reminders paid off in the form of $15 million in new funding over three years to sell the tourism message in the United States.

The money is a sizeable lump on top of the Tourism Board's baseline $55 million annual funding, and the $3 million a year it had been spending on US marketing initiatives.

It looks less impressive when you think of it as an extra US$2.9 million a year to sell "100 per cent Pure New Zealand" into a huge, diverse, and media-saturated market.

But running finely focused marketing campaigns is something Tourism NZ has become good at.

As Tourism Minister Mark Burton pointed out when he announced the funding, New Zealand has received "extraordinary publicity" over the past year through The Lord of the Rings trilogy, the America's Cup, and good exposure on the popular Discovery channel.

This exposure "has been invaluable, and it is essential that we capitalise on it", Burton said.

The US market is important for the tourism sector. The 200,000 US travellers who visited last year spent $880 million out of total overseas visitor spending of just over $6 billion.

Importantly, Americans are the type of "high-yield" tourists the industry seeks to attract. Many also tend to fit the "ideal visitor" profile Tourism NZ has developed.

They travel regularly, actively take part in the natural environment, seek a wide range of authentic experiences, and are large consumers of Maori cultural products.

Burton said 34 million Americans took international holidays each year and the opportunity was there to lure more here.

On top of the $15 million in Budget funding, Tourism NZ is investing a further $2 million of "reprioritised" baseline funding into the North American campaign.

The three-year-old global Pure New Zealand catchline will be unchanged and one of the key features of the new spending, which begins in August, will be a stronger focus on internet marketing.

Hickton said that although the agency's internet presence through its purenz.com site was well established, money was needed to boost awareness of New Zealand through travel sites such as Expedia.com.

"The internet is an increasingly important distribution channel in the United States travel market, with US$23 billion of travel products purchased online each year.

"We see this as a key platform to significantly increase the economic returns to the tourism industry, by encouraging greater direct business and therefore profit margins."

While the agency has yet to decide how it will divide up the new money, a strong focus for its American marketing strategy will continue to be the Discovery Channel.

Over the past few years Tourism NZ has spent several million dollars on Discovery Channel advertising and has contributed to the cost of making Discovery documentaries about New Zealand.

It sees the channel as an ideal way to reach its well-travelled and nature-savvy "ideal visitor" market.

Burton said the planning for the new campaign was under way well before the Sars virus became an issue for the tourism industry.

"People who fit [the "ideal visitor" profile] come from many different places around the globe and it makes good sense to spread the risk, if you like, and certainly that is a conscious part to the strategy.

"The emphasis right now on the North American market is more than anything just good business sense. It is where we believe we can get a bigger share of the market to maximum value to New Zealand."

The strategy:

The USA 100 per cent Pure campaign will centre on:

* Discovery Channel programming and exposure.
*Outdoor campaigns in Los Angeles, San Francisco, and possibly New York.
* Promotional activities at targeted events such as food and wine festivals.
* Magazine campaigns
* Partnered internet marketing with key on-line travel providers and campaign media partners.
* Working with key partners to maximise impact in the marketplace.