Hon Damien O’Connor
Minister of Corrections
Minister of Tourism
Minister for Rural Affairs
Associate Minister of Health

Embargoed 6pm 9 May 2007 Media Statement

Budget 07: New tourism funding for Chinese market

Tourism Minister Damien O’Connor has announced significant funding for Tourism New Zealand to manage and increase marketing activities in China, and for improvements to the administration of the China Approved Destination Status (ADS).

“The Government recognises that China is a critical emerging market for New Zealand, and we need to tighten the net on those operators who are offering sub-standard products in order to improve the overall experience of Chinese visitors,” Mr O’Connor said.

New Zealand’s profile with Chinese consumers in key markets for tourism is low.

“We risk either failing to realise the potential economic benefits or exposing New Zealand to price-based, low quality growth and associated negative impacts,” Mr O’Connor said.

"The funding of $7 million over two years will allow Tourism New Zealand to raise our profile and attract more high-yielding visitors and to make improvements to the ADS.

"This investment backs the Government's pledge to be sustainable while improving productivity by maximising the value from our target markets."

China is New Zealand’s fastest-growing inbound tourism market, and visitor arrivals are forecast to double to 226,000 by 2012. It is the world’s most populous country and fastest growing outbound tourism market.

Since ADS was granted to New Zealand in 1999, total outbound travel from China has increased by an average of 22 per cent per year. Holiday arrivals to New Zealand over the same period have increased by an average of 33 per cent. China is New Zealand’s fifth most significant market by tourism arrivals and is now a market worth $450 million to the New Zealand economy.

An independent review of the China market confirmed that major investment was needed to address current quality inbound tourism issues and to attract the right type of visitor from this market.

While the New Zealand tourism industry has welcomed rapid growth from the Chinese market, there have been issues arising from low consumer awareness of New Zealand as a destination resulting in decisions to travel based primarily on price and misrepresentation of New Zealand in visitor travel itineraries.

“Complacency and a do-nothing approach risks a gradual diminution in satisfaction levels of those Chinese travellers visiting New Zealand, especially as these travellers gain travel experience and compare New Zealand against other destinations, ” Mr O’Connor said.

Tourism New Zealand will invest in a consumer marketing campaign to raise awareness of New Zealand. The campaign will run in cities that have the highest concentration of targeted travellers and highest propensity for offshore, long haul travel. An annual integrated media campaign will include local television, print, Internet, events, and research.

ENDS

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