Visitor Economy. Marlborough is a highly desirable destination and the heart of New Zealand.
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- Darrell Lloyd
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1 Visitor Economy Strategic influences highlighted: 1. Focus on visitors. The Visitor Economy Strategy should focus on all forms of visitor to our businesses and attractions local, national and international rather than focusing on the Tourism Industry s narrow definition of a tourist. 2. Focus on destination, quality of experience. The focus of the Visitor Economy Strategy should be on enhancing as a quality and diverse destination, and communicating that in a way that attracts engagement. 3. Focus on long-term relationships. The Visitor Economy Strategy should target a high quality and long term relational engagement for all visitors that is likely to support the decision to make a permanent destination. Vision Five Years is a highly desirable destination and the heart of. We are proactive and innovative, and we create experiences that welcome and engage people. With pride in our stunningly diverse and beautiful region, we work to ensure that the wellbeing of people and environment is expressed through the quality of our intent, and the beauty of our built and natural environments. We express the freedom that is and our willingness to share that. Vision Fifty Years 1 is recognised internationally as desirable destination, offering an experience that is authentically. With an enviable lifestyle, fabulous visitor experiences, and a community renowned for its hospitality, innovation, and leadership; expresses an exemplary natural and built environment. thrives on diversity, creativity, prosperity and fun. Goals Five Years 1. We will know ourselves, our authentic story and value. We will communicate our story and value so that others know us better, and yet more are keen to know us. 2. We will be smart and connected, and others will be keen to join us and to emulate us. 3. We will be known for our innovation, knowledge and leadership; as dynamic and proactive people. 4. We will have a sustainable. This means our water, land and sky are cleaner, safer and more secure; and our economy is more diverse. 5. We will be prosperous, happy, friendly, vibrant, diverse people who are proud of ourselves and of. We will be inclusive and balanced in our decisions and actions. 6. will shine it will be an exemplar in change, prosperity and sustainability and will openly celebrate its success. 1 At peer review Destination s Board noted a preference for a 20 year vision. For consistency this has been held at 50 years in this Work Book, however, this should be discussed in the next phase. Mandolin Associates 2013 Page 11
2 Challenges Five Years 1. Learning to learn together, to work together more, and to stay on task. We need to be able to accept what we don t know, and respect each other for being willing to learn. And as we learn, we need to be able to work together with the focus on our goals. We want to be able to stay on task until we achieve success and not give up in despair part way through. 2. Changing our thinking. We need to learn to not just accept change, but to drive change in the direction we want to go. That means getting informed, and connecting to each other so that we have lots of ideas and lots of knowledge. There is no them and us; there s all of us. 3. Being dynamic and proactive. This means apathy, fear and negativity are not an option. We will replace those with dynamism, courage and optimism for the future. We need to be willing to be leaders together. 4. Using resources effectively. We have to be well informed about our environment, and to be able to manage regulations without imposing unrealistic constraints. But we also need to hold ourselves accountable, and manage our resources effectively. 5. Respect, communication, and positivity. We need to be respectful to each other, even when we disagree so that we can work through issues with transparency and a focus on achieving good solutions. This means more effective communication, and more focus on positivity; a focus on building trust. 6. Walking the talk, and rewarding success. Our focus needs to be on modelling the behaviour we want, on rewarding achievement and celebrating success. We don t want to be knockers. Potential Projects 1. Industry Strategy development completed. 2. Improve access to relevant business support for experienced businesses. 3. Provide comprehensive hospitality training across set the standard for success, and develop an awards system. 4. Completing The Story and developing a two year communications plan. 5. Revising our communication tools collaborative websites, social media, news article and bulletins keeping people informed. 6. Leadership groups (multi-industry) 7. Celebrate success events for Visitor Economy businesses 8. Launch campaign in and outside to communicate the Vision, talk about! 9. Workshops to define Destination projects to support success 10. Creativity programme working with the creative community to enhance Resources: Destination, Tracy Johnston (General Manager), phone: Website: Ministry of Business Innovation and Employment Tourism Data: Tourism : The Story, Project Leader, Catherine Bates: Catherine.Bates@tnz.govt.nz Mandolin Associates 2013 Page 12
3 Economic Brief The Visitor Economy Economic Data Supplied by Infometrics (2013) Life isn t always easy for a lot of Tourism-related businesses in. The focus of a Smart and Connected Industry Strategy is to improve business performance, economic resilience, and quality of jobs. The best way to do that is to acknowledge what we have achieved and then aspire, strategise and innovate for positive change. This workshop is the beginning of an Industry Strategy; it is not focused on developing an organisational strategy for Destination. The reporting of GDP and employment data for Tourism is not conducted in the same way as other industries. The Tourism Satellite Account (TSA) is calculated using a set of assumptions and formulas that extract Tourism, as a composite industry, from the 50+ industries recording data in New Zealand. The formula for calculating the composite industry of Tourism within the TSA has recently been revised and the new formulas had not been released at the time of this workshop. Therefore, Infometrics could not revise their regional databases to match the new formulas; and even if they did, we would not have a stable basis for trend analysis. Therefore, it is important to recognise that the GDP and employment numbers reported here are, therefore, not the same as the full Tourism Satellite Accounts (TSA) measure for Tourism in. Rather, what is presented here are some key statistics that can serve as a simple barometer for the health of businesses supporting The Visitor Economy in. The 2010 BERL report presented the following TSA statistics for Tourism in, using the old TSA formulas and in 2009/2010 current prices. GDP Number of Role of tourism in local economy Employment % ($2009m) % businesses % Tourism-characteristic industries % $ % % Tourism-related industries % $ % % All non-tourism-related industries % $ % % Destination RTO 1, % $ % % 96, % $7, % 19, % source:berl When we discussed these statistics at our Smart and Connected Forums, we noted that there is a need to improve economic efficiency in the Tourism Industry. This was confirmed through discussions with industry participants and is still the case today. Internationally the research literature supports this perspective for developed economies. In essence, the Tourism Industry is being asked to focus on quality of experience, relational context, and increased earnings per employee. We refer to this, in brief, as a value-based approach rather than a volume-based approach. From a strategic perspective it is very difficult to use the TSA numbers as a barometer for industry health at a regional level because it is a high level composite calculation built on a number of theoretical assumptions, and the calculation keeps changing. But there are some key statistics that we can use that help us to understand net changes at the coal face of the Visitor Economy. Mandolin Associates 2013 Page 13
4 These statistics are relatively uncomplicated, give us a good gauge on business performance of Tourism-related industries, and are inclusive of all forms of visitor whether they are locals enjoying local amenities, or whether they are out-of-towners (thus we are measuring a Visitor Economy, and not just Tourism ). With a focus on higher standards of living in, our hope is that the amenities provides will be as accessible to and enjoyed by locals as they are to visitors. The measures selected here provide a barometer for the Visitor Economy in. They are clear and easy to track measures that represent the wider context of visitors (that means locals, nationals and internationals) to businesses in 12 key measurement areas. They are delivered in 95/96 constant prices, not current prices. This allows more accurate trend analysis. The key measurement areas included are: The Visitor Economy Barometer The tourism-related sector is defined as all 7-digit ANZSIC06 industries that are closely related to tourism. These include Accommodation (H440000), Cafes and Restaurants (H451100), Takeaway Food Services (H451200), Catering Services (H451300), Pubs, Taverns and Bars (H452000), Clubs (Hospitality) (H453000), Taxi and Other Road Transport (I462300), Rail Passenger Transport (I472000), Water Passenger Transport (I482000), Air and Space Transport (I490000), Scenic and Sightseeing Transport (I501000), Travel Agency and Tour Arrangement Services (N722000). Source: Infometrics Limited, 2013 The VE Barometer starting point Infometrics, 2013) Indicator 2012 % of district total % of national sector Growth (2002 to 2012) GDP ($ million) $ % 1.0% 2.7% 3.0% Employment 1, % 1.2% 1.2% 2.1% Business Units % 1.6% 2.9% 2.2% Economic Output The VE Barometer Industries contributed $39.8 million towards GDP in in This amounted to 2.8% of the district's economic output in 2012, down from 3.0% ten years ago. Economic output in 's VE Barometer industries declined by 0.3% in 2012 compared with growth of 3% in the industry nationally. Growth in the sector in has averaged 2.7%pa over the last ten years, varying from a low of -6.2% in 2010 to a high of 12.1% in Mandolin Associates 2013 Page 14
5 GDP growth in the Visitor Economy barometer industries (Infometrics, 2013) 15% 10% 5% 0% -5% -10% % 9.4% 12.1% 4.4% -2.8% 4.7% 10.0% -3.0% 0.3% -6.2% -0.3% -3.9% 7.3% 2.2% 10.3% 7.8% -0.2% 7.1% -7.2% -1.2% 2.6% 3.0% s Total Economic VE Barometer Output (Infometrics, 2013) 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% % 3.0% 3.1% 3.2% 3.2% 2.9% 3.0% 3.1% 3.0% 3.0% 2.9% 2.8% 2.9% 2.7% 2.7% 2.7% 2.8% 3.0% 2.9% 3.0% 2.8% 2.8% 2.8% 2.9% Employment The VE Barometer industries employed an average of 1,926 persons in in 2012 which was down from 2,008 in Employment growth in the VE Barometer industries averaged 1.2% over the past ten years compared with total employment growth in the district of 1.9%. Employment growth in the VE Barometer industries peaked at 13.2% in The figure below shows the contribution of sub-industries to the VE Barometer. Accommodation makes the largest contribution (25.3%), followed by air and space transport (15.6%) and cafes and restaurants (15.6%). Mandolin Associates 2013 Page 15
6 Contribution of sub-industries to the VE barometer in (Infometrics, 2013) 4.9% 4.2% 3.1% Accommodation Air and Space Transport 6.8% 6.2% 25.3% Cafes and Restaurants Water Passenger Transport Pubs, Taverns and Bars 8.7% 15.6% Travel Agency and Tour Arrangement Services Takeaway Food Services 9.8% Scenic and Sightseeing Transport 15.6% Why isn t Retail included in the VE Barometer? Infometrics advise that retail should not be included in these measures because so many other factors (for example consumer confidence and level of local disposable income) have more influence on retail sales than Tourism does. This means that Tourism has insufficient effects on retail trends to warrant inclusion in the VE Barometer. Infometrics estimate that Tourists account for approximately 5% of total retail sales in, therefore, trends in retail sales are largely determined by the spending activity of locals. From Mandolin s perspective, the retail industry is so specific to the needs of the region and such an important element of its local infrastructure that it should be dealt with as a separate industry and then linked back to The Visitor Economy. Strategy is about focus and the retail industry requires that we get focused on it as social and economic infrastructure in its right. What about Wine? is s leading Wine Region. Similar to retail, the Wine Industry does not rely on Tourist spending to any significant degree, and has such high impact on the economy that it must be dealt with, strategically, in its own right. However, members of the Wine Industry advise that they value the Visitor Economy due its ability to connect them to a local and broader audience. We are extremely fortunate in that many of s Wine Businesses make a concerted effort to partner with other industries such as Arts and Recreation in order to create Visitor Economy experiences. These partnerships offer not only a broader audience, but have the potential to create a substantial Destination Marketing impact. These important factors require discussion to link the Wine Industry back to the Visitor Economy. The same approach is being taken to the Arts and Recreation Industry. The charts on the following page compare growth in GDP and employment in the VE Barometer industries in five comparator regions. Mandolin Associates 2013 Page 16
7 GDP growth: Last year ( ) -15% -10% -5% 0% 5% 10% Last 2 years ( ) -6% -4% -2% 0% 2% 4% 6% 8% -0.3% -3.3% 6.8% 6.6% -11.0% -3.7% 4.4% 5.1% 8.1% 4.8% 2.7% 2.8% Last 5 years ( ) Last 10 years ( ) 0% 1% 2% 3% 4% 0% 1% 2% 3% 4% 5% 6% 0.0% 2.7% 2.8% 2.0% 0.2% 2.0% 3.3% 5.2% 1.1% 2.8% 0.9% 3.1% Change in employment: Last year ( ) -10% -5% 0% 5% 10% Last 2 years ( ) -10% -5% 0% 5% 10% -4.1% -4.7% 3.2% 2.8% -7.9% -3.2% 6.6% 6.5% 3.2% 1.2% 0.8% 0.8% Last 5 years ( ) Last 10 years ( ) -2% -1% 0% 1% 2% 3% 4% 5% 0% 1% 2% 3% 4% 5% 6% -0.9% 1.2% 2.9% 3.2% 0.0% 1.6% 4.4% 5.1% 0.8% 1.8% 0.6% 2.1% Mandolin Associates 2013 Page 17
8 The very low GDP per employee in the VE Barometer ($20,664) suggests high part time and casual employment and a very short seasonal peak that is expected to maintain the businesses across the entire year. This is likely to reflect poor quality of employment (in terms of stability and earnings), and low resilience in the businesses (the need to hunker down or close out of the peak season). This is an important consideration for if, as was decided during the Smart and Connected Forums, quality employment and economic resilience are a focus for. The above charts also give us an interesting view on impacts such as s earthquakes which we will discuss. Starting points for discussion: Destination Marketing Is it "a proactive, strategic, visitor-centred approach to the economic and cultural development of a location, which balances and integrates the interests of visitors, service providers and the community" as originally defined by Karl Albrecht? Or is it just the process of communicating with potential visitors to influence their destination preference, intention to travel and ultimately their final destination and product choices. The interpretation most often presented by the Tourism Industry in 2013? Value versus volume Relational space versus transactional space Unique and high value experience consistently Tailored infrastructure big, boutique, or backpacker? Seasonality eventing and reconceptualising Quality jobs resilient businesses and Clifford Bay Connectedness, Projections and Projects End Visitor Economy Mandolin Associates 2013 Page 18
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