Funding cut forces marketing rethink
A $6 million funding cut has forced Tourism New Zealand to rethink the way it tries to attract big spenders and backpackers.
Budget papers released last week said TNZ would save $5.9m through the ‘‘exit of all activity to attract high-value premium and youth sector visitors’’.
TNZ chief executive Stephen England-Hall said that was not correct, and after an internal review they had made savings without ‘‘exiting’’ any sectors.
However, he confirmed TNZ had disbanded two ‘‘niche’’ teams – one covering premium highvalue visitors and a ‘‘special interest’’ team promoting backpacking, cycling, skiing and golf.
TNZ defines high-value premium visitors as those who spend upwards of $25,000 on a holiday.
‘‘However, the biggest growth opportunity is those in the ultrahigh net worth and very high net worth categories where spending of $50,000 is not extraordinary,’’ England-Hall said.
TNZ staff in the specialist teams had been absorbed into the general marketing team, he said.
TNZ had also saved money by scaling back and being more efficient with media buying, and shooting promotional material suitable for multiple markets.
‘‘We might have done a production shoot for a particular activity that was targeted at China, and we might have done a very similar shoot for Germany with slight nuances. Now we’d look at how we shoot content that suits both,’’ England-Hall said.
When it came to digital media, the different types of visitors used similar channels, he said.
The number of 18- to 24-yearold backpackers coming to New Zealand dropped 2.5 per cent last year, so the industry is carefully watching the impact of TNZ’s new approach to promotions.
TNZ ran a campaign targeting British and German backpackers already in Australia to try to persuade them to add New Zealand to their trip, but the number of visits by these so-called ‘‘transient’’ backpackers dropped 23 per cent last year.
England-Hall said that prompted the decision to focus marketing to Brits and Germans at home because those who came here direct, rather than via Australia, stayed 30 days longer than transients, and spent $1000 a head more ($5200 on average).
Simon Cartwright chairs the Backpacker Youth and Adventure Travel Association and he said the move was understandable given that there had been a marked reduction in the number of backpackers going to Australia in recent years.
‘‘We have to be reasonable and accept that TNZ’s budget is not unlimited and our expectation is that they use it where they will get their best bang for their buck,’’ he said.
The total backpacker market had grown at a slower rate than the general holiday market, and it remained to be seen whether TNZ’s new approach would change that, Cartwright said.