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Output Expense > Policy Advice – Tourism

Description

This output expense provides advice on economic, environmental and social policy affecting tourism, including implementation of programmes to advance the recommendations of the New Zealand Tourism Strategy 2010 (NZTS 2010) and the Government's wider objectives as they relate to the sector, including tourism aspects of major events. It includes the provision and management of tourism research and data to assist in sector decision-making. Further outputs include advice on the Government's interests as owner of Tourism New Zealand (TNZ), the New Zealand Mäori Arts and Crafts Institute (MACI), and the Government's land and property holdings.

The outputs included in this output expense contributed to the business environment outcome: Promoting sustainable tourism.

Quantity, Quality, Timeliness and Cost

Work Programme

All policy advice projects were delivered in accordance with the terms of the work programme as agreed with the Minister. Changes to deadlines were negotiated with the Minister.

The following outputs were included in this output expense for 2006/07:

Core Policy Advice

Reflecting the Government's role as having primary responsibility for implementing the NZTS 2010, the Ministry will provide advice on priorities and will take responsibility to implement these, in partnership with other sector stakeholders as appropriate.

The Ministry will provide advice on policy issues of concern to the Government, the sector and communities, including the following:

Providing leadership to NZTS 2010 through the mid-term review, and ensuring that the objectives of the strategy are achieved through effective use of the strategy implementation fund

• Over the course of 2006/07, this key deliverable has progressed to its final drafting stage. Consultation is largely complete and a launch date is expected in October 2007.
• Key components of the update process that have required significant Ministry effort include the following:
  • New government/industry partnership structures have been developed, including the Ministerial Advisory Group (MAG) and the joint strategy secretariat comprising the three key sector organisations.
  • Consultation has included a 400-delegate-strong strategy day during the 2006 tourism conference, theme-based consultation meetings, and robust industry and agency response to a consultation draft.
  • A focus on substantive challenges and targets was brought to MAG meetings, e.g. through addition of tourism arrivals and expenditure modelling.
  • There has been an increased focus within the strategy on net value to New Zealand from tourism and tourism sustainability.

Developing a better understanding of the economic performance of the tourism sector and the financial performance of tourism firms, and undertaking initiatives to enhance sectoral performance

• A "return-on-investment" emphasis measure for the relationship between marketing investment and visitor arrivals has been established, with measures incorporated in the 2007/08 Tourism New Zealand (TNZ) Statement of Intent and Output Agreement.
• A review of the Approved Destination Status scheme for inbound leisure tourism from China has been completed and recommendations communicated to inbound tour operators.
• Advice on increasing and targeting marketing of New Zealand as a tourism destination in China was provided in light of quality issues and growing numbers in this market. Budget 2007 funding has enabled the development by TNZ of consumer campaign activity in key locations in China to differentiate New Zealand as a high-quality destination.
• Advice on furthering a marketing conversion fund, drawing on international experience, previous TNZ/industry funds and Baseline review recommendations relating to conversion has been presented.
• An evaluation of the Mäori Tourism Facilitation Service, a mentoring programme supported by the Tourism Strategy Implementation Fund, was completed in this period. The evaluation reported positive results in terms of business capability gains and indications from participants of improved returns as a result of the programme. The recommendations for improvement that came from the evaluation have been incorporated into the 2006/07 round of the programme.
• Options to ensure the continued coordination of Mäori tourism development were evaluated, and an approach was agreed to by Ministers and implemented between the Ministry and the Mäori Tourism Council.

Undertaking initiatives with the Department of Conservation (DoC) to enhance management of the conservation estate and ensure better environmental outcomes, while ensuring that visitors continue to enjoy opportunities on the conservation estate

• The Ministry has provided input into the process of allocation of limited concessions on the conservation estate through engagement with DoC and the Tourism Industry Association (TIA).
• Ministry input has been provided to DoC on high tourism profile National Park management plans, specifically Abel Tasman and Fiordland National Parks.

Developing a comprehensive understanding of the labour market and skills requirements for the tourism sector, and implementing a strategy to ensure that constraint issues for the sector are addressed to achieve sustainable growth for the tourism sector

• The primary focus in this area has been to ensure that the NZTS update identifies the tourism industry's strategic labour market priorities in a constrained labour supply environment.
• The Ministry has continued to contribute to the Tourism and Hospitality Workforce and Skills Leadership Group's work, particularly by supporting a forthcoming tourism productivity project in partnership with the Department of Labour.

Undertaking initiatives that increase local authorities' capability to manage local infrastructure requirements to meet increased tourism demands in key tourist destinations

• The Ministry has provided ongoing management of grant distribution to successful Tourism Development Subsidy Scheme applicants to ensure that projects funded are achieving contractually agreed milestones. The first major grant was delivered in February 2007.

Advice on Purchase, Grants and Ownership

This output relates to providing advice on the purchase of services from TNZ. In 2006/07, particular focus was placed on ensuring that the structure, content and performance measures of the Statement of Intent and the Output Plan allow for efficient and effective monitoring of TNZ's activities and spending.

Advice on the MACI is also included in this output.

• Analytical work to underpin improvements to TNZ performance measures has been conducted, with a particular emphasis on return on investment. An expenditure goal has been incorporated into the 2007/08 performance measures for TNZ.
• The Ministry administered the process of appointment for four new board members to the TNZ board. Five existing board members were reappointed in the period leading up to December 2006. The recruitment process focused on bringing more strategic-level expertise to the board and has staggered appointment dates to allow for a more staged succession in the future.
• The Ministry administered the process of appointment for six new board members to the MACI board, each for a three-year term commencing in June 2007. The new board members bring skills and experience in tourism, business, capability building and community development.

Research and Statistics

This output relates to providing tourism research and statistics and policy advice on the research needs of the tourism sector. In particular, the Ministry will ensure that the Government's current tourism data set is increasingly accessible to and used by the private sector in its decision-making, and that an applied research programme that is relevant to both public and private sector needs is developed.

The Ministry delivered a programme to enhance understanding of the dynamics of the tourism sector in New Zealand that included:

Developing a Tourism Flows Model that utilises a wide body of tourism and related data to determine the flows of tourism activity in New Zealand; this is set out on a Geographic Information System framework and integrates sector forecasts to provide future focus

• The Tourism Flows Model has been completed and released to a number of central and local government agencies, tourism operators, regional tourism organisations and research institutions. The model packages a wide range of tourism data into a system that allows analysis of the sector using maps of tourism flows in order to enhance planning processes supporting tourism.

Developing an analysis programme to utilise tourism and other data to provide in-depth understanding of key topic areas of the tourism sector such as domestic tourism and the accommodation industry, and a range of other areas

• Detailed analysis reports have been disseminated for domestic and outbound travel, the accommodation sector, and exchange rate and tourism relationships.

Broadening the participation by regional tourism organisations (RTOs) in the regional visitor monitor in order to deliver relevant regional-level tourism information to support RTO activities

• Six partnering RTOs have continued their financial commitment to this survey. Policies for extending to other RTOs have been developed, and the survey is open for broader participation.

Ensuring the Government's current tourism data set is increasingly accessible to and used by the sector in its decision-making

• The tourism research programme has delivered key information to industry and government agencies. Particular focus has been brought to communicating research information and delivering targeted analysis. For example, data releases have been formatted to improve accessibility, and summary analysis has been increased to assist in application of the research by the sector.

Advice and Assistance on Major Events

Through providing secretariat support to the Major Events Development Fund, the Ministry contributes to the implementation of the Major Events Strategy to retain, grow and attract major events that complement New Zealand's image and existing infrastructure and achieve a greater contribution to economic growth

• Financial support of over $2.5 million has been approved for 11 events with a projected economic benefit estimated at over $250 million. Event data for potential events was identified and analysed, including the International Indian Film Academy Awards and the World Netball Championships 2007. The Inter-agency Events Group (IAEG) also supported Conventions
  and Incentives NZ over this period.
• Draft economic impact assessment reports for five events have been delivered by a contracted external agency. These will be reviewed, prior to completion, early in the 2007/08 reporting year.
• A bid evaluation process has been established to provide a framework for proactive identification of bid opportunities.

Land and Property Management

This output involves the management of tourism and other concessions at Wairakei and Rotorua to ensure that risks are appropriately managed, commercial returns are achieved on property holdings, and all legal and contractual obligations are met. Advice is provided on ensuring that tourism concessionaires are protected throughout the process of resolving outstanding land occupation issues with Contact Energy.

• The tourism and other concessions at Wairakei and Rotorua were managed throughout the year. A record amount of rental revenue was collected, and all legacy concession issues have been resolved. One of three tourism development proposals evaluated for Wairakei has been progressed to the lease stage.
• Agreements on key resource and asset issues have been reached, including the signing of a Wairakei management protocol with Contact Energy and resolution of road access issues at Huka Flat.
• The Ministry also provided advice to the Office of Treaty Settlements regarding the transfer of Whakarewarewa and Roto-a-Tamaheke reserves to Te Awara.

Crown Entity/Statutory Board Monitoring

The Ministry provided advice, monitoring and reporting on the services the Government purchases from TNZ for promoting New Zealand overseas as a tourism destination and for onshore quality and industry issues reflected through:

• the Statement of Intent;
• the Output Plan;
• management reports (for reference as appropriate to the Minister);
• quarterly reports; and
• the Annual Report.

The Ministry completed the annual assessment of the MACI. Advice was provided on the site redevelopment, which has been completed successfully.

Major Budget Variances

The Supplementary Estimates change ($0.062 million) reflected funding for the development
of a new Approved Destination Status scheme for leisure visitors from China.

The variance between Supplementary Estimates and actual expenses was due to work on the Commercial Accommodation Monitor review scheduled for 2006/07 being transferred to 2007/08.
An "in principle" expense transfer has been approved to allow for the carry-over of funding into 2007/08.

The variance between 2006/07 and 2005/06 actual expenses is due to additional funding received for the China Approved Destination Status scheme ($0.062 million), and the carry-over of funding from 2005/06 into 2006/07 for the Commercial Accommodation Monitor review ($0.113 million).