Lake Taupo. Photo / Marian Robertson
Destination Great Lake Taupō is concerned about the future of the local tourism sector after losing 20% of its annual funding from Taupō District Council in the latest long-term plan.
In its draft Long Term Plan, Taupō District Council proposed to cut funding to $1.7 million over the next financial year, having contributed $2.1m in the past financial year.
At the council’s LTP Hearings and Deliberations last month, acting general manager of DGLT, Amanda West, said tourism contributed “substantially” to Taupō’s economy with an annual impact of between $730m and $1 billion.
“That’s a return of $800 for every $1 spent on attracting visitors here. Our website lovetaupo[.com] ranks third in views among New Zealand’s major tourism destinations - and that’s effectively down to our marketing efforts.”
DGLT board member Tom Loughlin told the meeting that Taupō had an “exceptional performance” in capturing visitor expenditure, even surpassing regions like Rotorua.
“So [Taupō is] punching way above its weight ... It’s something that needs to be supported.”
West said DGLT understood “everyone” was in a hard situation, so the organisation would support and be able to manage the funding reduction for the first year of the Long-Term Plan thanks to “financial stewardship and well-managed reserves”.
“However, that prolonged reduction will impact our ability to deliver some key services such as major marketing campaigns ... and international trade partnerships, so losing that momentum that we’ve built,” West said.
“We’re also at risk of losing our market share with international markets and business events that we steadily built upon post-Covid.
“To sustain the momentum, we request that council restore funding to our current levels from year two and three of the LTP.”
Ahead of the council’s LTP Hearings and Deliberations, DGLT released its Statement of Intent 2024-2027.
In that report, DGLT said while the recovery of New Zealand tourism following the Covid-19 pandemic had been “remarkable” and demand had proven to be “resilient”, the sector would now face a new set of challenges.
“Like businesses in many other industries, New Zealand tourism operators are navigating challenging economic conditions while adapting to new and evolving consumer travel trends and behaviours post-pandemic,” the report said.
“A backdrop of slowing economic growth, tighter financial conditions and global uncertainty is expected to weigh on the tourism sector.”
DGLT said domestic visitors were the “backbone” of the Taupō visitor sector, however, domestic visitation had started to slow and recent figures indicated a “declining visitor spend” due to cost-of-living pressures.
“Although domestic spend is still up 19% on pre-Covid levels, it has now started to decline with spending down 9%, compared to the same period last year.
“Much like many parts of the country, our tourism operators are [also] experiencing significant pressure from increasing operational costs [and] a lack of residential housing for working holiday staff.”
Despite this, tourism continued to deliver “strong benefits” to the Taupō region and remained the number one employment sector locally making up 32% of all filled jobs - ahead of forestry and agriculture.
“International spend is up 192% to $159 million, reaching approximately 75% of pre-Covid expenditure,” it said in the report.
“The region is welcoming [back] visitors from across the globe with Australia and the USA [being] our two most important international source markets.”
Technology, including its website lovetaupo.com, had played an important role in DGLT’s marketing strategy post-Covid and positioned the organisation as a leader in attracting domestic visitors.
“Guest nights [are] sitting significantly higher than our neighbouring Central North Island competitors.
“With domestic visitation starting to slow our focus is to now leverage the gains we have made.”
However, in the Statement of Intent, DGLT said the reduced budget would “significantly” impact its activities.
“DGLT will not have the budget to undertake major domestic marketing campaigns ... This will result in a decline in visitation to lovetaupo.com and a subsequent drop in referrals to operators.”
Lovetaupo.com delivered over 280,000 referrals to operators’ websites, however, the website was now five years old and in desperate need of an upgrade, DGLT said.
“Over the past two to three years we actually set aside [some money]. Having the additional stat funding from central government, we’ve been a bit prudent with our council funding and set some of that aside to allow us to do that website [re-]build,” West said at the council’s hearing.
“So ... we’re saying that the 20% reduction [in funding] in year one - we have got enough. Well, there will be a few little things shaved off, but we’ve got enough that ... we can do the website rebuilt ... and keep most of the other projects ticking along.
“We acknowledge that everyone is in a hard situation and we need to get through that. But ... in year two and three [of the LTP], we won’t have that [funding reserve] anymore.”
Key focus areas for DGLT - aside from the website - would include targeting domestic visitors who travel for a passion, biking, hiking, golfing or fishing, as well as families, couples, and friends.
Its international marketing activity would be focused on North America, Europe, and Australia with South East Asia and India becoming a secondary consideration.
DGLT said it would continue to attract tourism investment into the region, including the development of a 4-5 star hotel, as well as supporting tourism businesses, including hospitality and accommodation sectors, to enhance their capability to deliver experiences.
For this, DGLT would continue to provide workshops and training opportunities, together with Amplify, Town Centre Taupō and the Taupō Business Chamber, however, the number of workshops will be reduced for the 2024/25 financial year due to budget constraints.
“With an increasing responsibility around the management of the destination, it will be necessary to review current resourcing to ensure the organisation is fit for purpose and ... able to deliver on our stated intentions.”
The news comes after several Waikato councils also reduced their contributions to their local tourism organisation Hamilton and Waikato Tourism (HWT).
HWT is funded by Hamilton City Council, as well as the Waipā, Waikato, Waitomo, Ōtorohanga and Matamata-Piako district councils.
Five councils have confirmed reductions to HWT’s budget - ranging from 17% to 60%.
Danielle Zollickhofer is a multimedia journalist and assistant news director at the Waikato Herald. She joined NZME in 2021 and is based in Hamilton.
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