27 Mar 2018 By Contributor
Destination Rotorua’s chief executive, Michelle Templer, on the crucial shift from destination marketing to destination management, the challenges in driving value over volume, and unlocking further investment into the tourism sector.
Rotorua Economic Development, which trades as Destination Rotorua, is a council controlled organisation that was formed in July 2016 when the former economic development agency and marketing agency were rolled together.
Given the major role that tourism plays in the Rotorua economy it makes sense to join an EDA and RTO together here – that is one of the things that attracted me to the role that I started in November 2016.
The CCO receives annual funding of around £4.235m from the council, as well as revenue from our partnerships with industry, our i-sites and other strategic partnerships.
We are mindful that we receive quite significant funding from ratepayers, but are extremely fortunate that tourism is a part of the DNA of the region. There is a strong understanding of tourism’s role in the economy – it directly contributes 28% to Rotorua’s GDP.
This is unusually high and demonstrates the vital role tourism plays in Destination Rotorua’s overarching goal to improve the local economy, and its ability to create wellbeing, employment and wealth for the region.
A big part of driving economic contributions from the tourism sector involves a strategic shift to value over volume. We have a real focus on people coming to stay longer and do more, and believe higher value visitors have a lower impact on our environment and are more sustainable for businesses operators.
Achieving this shift has involved the council taking a really forward-looking destination management approach to change the perception of Rotorua.
This strategy, which forms part of the council’s Vision 2030, is starting to pay off with year-on-year growth in spend coming in at a steady 7.1%.
One of the most pleasing things about this growth – which was off quite a high base – is the ongoing rapid uplift in domestic. In the year to January domestic spend was $465m, compared with $360m international, so we have quite a balanced portfolio which delivers us more than $825m annually.
Internationally, Australia is still incredibly strong and remains our largest market accounting for $69m of the $360m annual international spend.
After that, China, the US and the UK are fairly close with our Chinese visitor market transitioning from bus tours to FITs. As I said, we are shifting our measurements and targets towards value and we are equally focused on getting seasonal spread. This seems to be working well – to the point that March is looking even busier in some areas than January this year, although it is boosted by a couple of big events including the Rotorua walking festival, NZO Moodride and Crankworx Rotorua Mountain Bike World Series.
Looking forward, we have set ourselves a stretch target to nearly double annual tourism spend to $1.5bn by 2030, which means we also need to double visits to attractions and activities to nearly 6.3m per year. We are also looking to double business events to 2,700 annually.
The market is responding to the strong growth in visitor numbers and spend by developing new product and investing in existing product and we are keen to see this continue.
We are forecasting 3,500 international visitors to Rotorua per day by 2030 so we want to make sure there is a suite of quality offerings for these visitors.
We are keen to work in partnership with existing operators, and with Iwi to help bring opportunities forward including investment attraction.
It is fantastic to see the $30+m spa and wellness centre, Wai Ariki Hot Springs and Spa, that is going to be developed by Pukeroa Oruawhata Group on the lakefront.
Alongside that is an expectation of a hotel development coming forward, which will sit against a number of other big commercial developments set to transform the city into an ongoing international and domestic visitor destination. These include a council-led proposal for a major redevelopment of the lakefront, Whakarewarewa forest, and Kuirau Park, a central city geothermal park, as well as aspirations around ongoing partnered investment into public spaces.
While it is great to see increasing public and private sector investment into the tourism industry and local economy, I believe more could be done to attract further investment.
One way I believe this could be achieved is by an improvement to the quality of the data available in the sector. There has been a shift in both our local strategy, and at a national level led by Tourism New Zealand, to focus on visitor value over volume. It is a key component of the sector’s Tourism 2025 guiding strategy. However it is actually really difficult to get an accurate picture – and particularly a real-time picture – of spend, which in turn makes it very difficult to confidently make strategic business decisions around that.
An area we are focusing on also, is understanding the customer journey and the change in tourism purchasing habits. We are seeing ongoing movement away from traditional group tours, which involved rigid planning, to independent touring or flexi-tours that deliver a high degree of flexibility and agility to visitors in terms of their itinerary. And despite all the information available to visitors, it would appear that they are still making last minute decisions about what they experiences they are going to do.
This creates some challenges for businesses. How can they plan their rosters in the short term or reinvestment in product in the longer term, when there is no certainty around spend. It is a real challenge for businesses to keep up with this desire for flexibility. Creating platforms that support optimising the opportunity in terms reaching out to the people who are in town is a focus.
The third related issue we are facing locally – and perhaps nationally – is ensuring we have differentiated and competitive product that meets international expectations.
The bar is definitely going up across the globe, tourism is becoming incredibly competitive and everyone is fighting for their share of the tourist dollar that is allocated to experiences.
How do you find and maintain your voice within an increasingly competitive decision-making environment? This again comes back to encouraging people around reinvestment, or reinvention to some extent. What I love about Rotorua is that we have amazing authentic New Zealand experiences where it is easy to go from dreaming to doing!
Article Tags: From the Regions
20 Mar 2018 From the Regions: Hawke’s Bay’s Neil Barber
13 Mar 2018 From the Regions: Wanaka’s James Helmore
27 Feb 2018 From the Regions: NRDA’s Mark Rawson
20 Feb 2018 From the Regions: Stewart Island’s Jon Spraggon
13 Feb 2018 From the Regions: Coromandel’s Hadley Dryden
14 Nov 2017 From the Regions: Kaikoura’s Glenn Ormsby
22 May 2018 Hobbiton-themed Magic match dress unveiled