Prime Minister Christopher Luxon was given an insight into the world of tourism at Trip.com headquarters in Shanghai, China. Photo / Thomas Coughlan
Prime Minister Christopher Luxon was ushered into a dark corner of travel company Trip.com’s Shanghai headquarters.
It was day one of Luxon’s mission to the country and, accompanied by airline and airport chief executives, Luxon was visiting Trip.com, China’s largest travel company. He was hosted by CEO Jane Sun.
Like a naughty schoolchild, Luxon found himself ushered into a dark corner on the ground floor of the company’s offices and told to stare at the wall.
As soon as Luxon was in place, the wall... and the floor... and the ceiling burst into life, grandly telling the history of travel in psychedelic animation, from the time the first humans left the African savannah to now, via a pitstop in Ancient Greece, where the philosophers were apparently keen holidaymakers. What to do when you’re set free from a lifetime in Plato’s allegorical cave? Book a holiday of course!
The animation ended and the wall displayed an interactive dashboard giving live (or near-live) information from Trip.com about China’s top tourism markets.
The dashboard told Luxon everything from the average stay of a Chinese visitor in New Zealand (nine days) to Chinese tourists’ favourite attractions (in order: Skyline Queenstown, Hobbiton Movie Set, Waitomo Glowworm Caves), to their “must-visit” restaurants (no prizes for No 1, it’s Queenstown’s Fergburger, followed by Auckland’s Depot and Wellington’s Flight Coffee).
All is not well, however.
Chinese arrivals are still about 60% of pre-Covid levels. Luxon wants that number to be higher and wants to use this trip to try to make that happen.
Sun pointed to the top left corner of the wall. It showed the average time between a Chinese tourist booking their trip and when they arrived in New Zealand. A large number of visitors are confirming plans just eight to 14 days before travelling. Gone are the days when Chinese tourists would spend months preparing for a trip.
“For the younger generation, the booking window is getting short,” she said.
The company’s vice-president Edison Chen was even more blunt. He said recent visa changes would be positive “if the Prime Minister allowed totally visa-free for Chinese travellers, that would be beautiful, beautiful”.
Luxon laughed.
“I appreciate the pitch,” he said.
Sun suggested a compromise, a 10-year visa for “premium” tourists, allowing those tourists to come and go multiple times over 10 years. Current visitor visas are valid for five years.
The visa settings may not be attractive to younger travelers.
These visitors want to log on to Trip.com, see the destination with the best price and offering, and then get on a plane and go there, all within a matter of days. The current visa regime makes this difficult. Visas are processed quickly but they don’t allow the ease of travel that going visa-free would allow.
Each time Luxon or a minister is asked about a waiver regime, they push back on to officials. On Wednesday, Tourism Minister Louise Upston said a “considered approach” was needed.
The reality is that officials are concerned a full visa waiver regime would lead to a rise in overstayers and asylum claims. A wave of overstayers and asylum seekers won’t just be costly for New Zealand, they might put the Government in an awkward position with our largest trading partner.
The Government is making visas easier to get, easing translation requirements, and introducing a waiver pilot for Chinese tourists with an Australian visa. On Wednesday, they announced a waiver for transit passengers, meaning Chinese tourists will no longer need an expensive visa to transit through Auckland airport on their way to somewhere else.
That’ll be great news for Best Ugly Bagels and whoever runs the bar in the international terminal, but it won’t do much to spread the wealth to the rest of the country unless it translates into far more flights into Auckland, boosting competition and lowering prices for the travelers who aren’t transiting through (of slightly greater interest is the fact the first obvious flight to take advantage of this, a China Eastern route to Santiago, Chile, via Auckland, is being discussed by the airline and China’s ambassador to New Zealand as project under President Xi’s Belt and Road initiative).
Later, speaking to media, Luxon said the Government had “not discussed or talked through” the idea of a 10-year visa for premium travelers.
He continued to say the issue was “a marketing challenge” rather than a regulatory one.
But others are not so sure and note that the Government erected a wall of its own – hiking taxes on tourists and other people needing visas when it came into office to offset the cost of its tax plan. Previously, the taxpayer had subsidised visa costs, which effectively operated as a loss leader for the country – low enough to get people on a plane, but not so heavily subsidised that they couldn’t be recouped by the positive impacts of tourists when they arrived.
The politics of this changed over the past decade as Queenstown traffic jams and environmental desecration of tourism sites caused some to ponder whether the environment and local councils, as well as the Government, were subsidising the low-cost model of the tourism industry.
Responding to this, the Labour Government introduced the international visitor levy, which is meant to pay for the wider costs of mass tourism. The coalition, on taking office, trebled the levy to $100.
The changes have hiked the cost of a visa to visit New Zealand to $441, including the visitor levy. Ministry of Business, Innovation and Employment officials did not think the hikes would have a big impact on demand, but the travel sector isn’t so sure. Chinese tourists are famously price sensitive and may opt not to pay the high visa fee and instead travel elsewhere.
Tourism operators note the fee for an equivalent Australian visa is AU$195, (NZ$210), making travel to that country more appealing, although perhaps the new visa waiver scheme will see Chinese visitors use the Australian visa as a backdoor?
A regulatory impact statement on the changes warned they were “inconsistent” with the Government’s goals of increasing export revenue.
The message Luxon received in China is that those officials may have been right.
Luxon’s first trip wasn’t all regulatory tussling. He celebrated grass-fed dairy at an event hosted by Fonterra.
Grass-fed dairy is highly sought after in China, according to Fonterra, fetching higher prices.
The dairy giant might have a slightly inflated sense of just how desirable grass-fed milk is in China. Waiters handed out champagne flutes of the white stuff, but many – perhaps most – were politely placed on to hotel tables, undisturbed.
Luxon celebrated a big regulatory win for New Zealand cosmetics. The Government has developed a new accreditation process for skincare products manufactured in New Zealand.
The accreditation is recognised in China, allowing New Zealand skincare companies to sell through Chinese retailers, rather than simply online. The regulatory change is a work-around of a regulatory impasse stemming from the fact New Zealand bans testing cosmetics on animals, while in China it is nearly impossible to sell cosmetics that have not been tested on animals first.
Luxon celebrated by trying some Antipodes eye cream himself, before asking veteran journalist Richard Harman, who writes the Politik website, whether he would like some as well.
Harman, a good sport, complied.
“He’s got beautiful eyes – they just pop now,” Luxon said, as he daintily dabbed some cream around Harman’s eyes.
“I’d never get away with that at home,” Luxon said.
“Well, you may not get away with it here,” Harman replied.
Brendan Attrill, Peter Newbold, Chris Russell, Hamish McKay, and Rowena Duncum.