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Nelson leads the regions in value growth again – here’s why

24 Feb 2017  By Bridget O'Connell

Nelson, New Zealand, as seen from the Centre of New Zealand. Credit: Markus Koljonen

In the latest monthly regional spending estimates published by the Ministry of Business, Innovation and Employment on Thursday, Nelson showed the greatest growth of any region with a 14% annual uplift to $344m in the year to January. It’s a position the region held consistently throughout the past year. The Ticker spoke to Nelson Regional Development Agency chief executive, Mark Rawson, on the secret behind the region’s success.
Q. What does this result actually show from the region?

Mark Rawson

A. Firstly, what is really important is that this shows the value growth that we’ve been targeting, not necessarily volume growth.
Secondly, only around 40% of that spend is going to the attractions, activities and accommodation. The other circa 60% is going into retail, hospitality, transport – all those other factors that help make up the visitor experience. The spread is really important for the whole destination and not just being captured in a small way.
Q. Were you surprised that Nelson came out on top again? Does it reflect what you are seeing on the ground?
A. I wasn’t entirely surprised because in seven or eight of the last 12 months Nelson has been topping the value growth so there is a fairly consistent trend. And from what we’ve been seeing on the ground it’s not much of a surprise right now. The place is doing very well. There’s still a little bit of accommodation left but it’s fairly well occupied and you notice on the streets a bit of vibe and in the city which is great.
I think one of the things that is interesting to note is that the value growth we are getting is from the high-value market and not from China. China is still the biggest driver of New Zealand value growth so it does surprise me a little that we have managed to maintain that value growth month-on-month because we are seeing a very, very, very small part of the China market. In Nelson, it’s so driven by the higher-value European, US market in particular, and Australia is starting to come back.
Q. How will you continue to drive this growth and how will you ensure investment keeps pace?
A. Our big challenge is to even out the seasonality. In the last year we started to do that but it will be our challenge for the next couple of years. We need to make sure that the product offer is as good and utilised throughout the shoulder seasons in particular. That is what the private sector needs to be able to have the confidence to make the investments that are required. We’re starting to see some infrastructure investment and some core visitor product investment is starting to flow.
Our airport has been doing a wonderful job. It has made significant strides in both attracting and retaining both Jetstar and Air NZ and we have got quite serious connections all around NZ, particularly to Auckland, Wellington and Christchurch, which is where the international connections come into play.
Nelson Airport is just starting a $30-40m upgrade of the terminal to cater for the more than a million passengers we have today. That’s another important part of the puzzle to stimulate private sector investment and that’s the game we are on about.
Q. Is there any other significant investment or is it at the airport mainly?
A. Primarily the airport, but we are also starting to see fairly developed plans around roading and connections and that sort of stuff. And in terms of the private sector elements, a number of the bigger operators, in particular, are reinvesting in upping the ante in their product range and the quality of their product. It’s not necessarily massively visible right now but the confidence is starting to come that the investments are being made.
Q. Are you doing some specific work around investment or do you have a programme already in action?
A. At the moment we are concentrating on making sure we have got a good, robust, seasonal, targeted marketing programme, so that is the number one priority. The second thing is to work on pulling together a programme that supports investment decision making as much as possible. Do we have a fundamental programme for that right now? No, but within the next six months we absolutely will.


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