On the 27 July, I attended a presentation at the Motel Association Annual Conference by Damien O'Connor the Minister of Tourism.Mr O'Connor has a lot in common with the accommodation industry as he was previously the Minister in charge of the largest accommodation facility in the country – the Ministry of Corrections.
Mr O’Connor is also the Associate Minister of Health and in line with his fellow Labour Party brethren is very keen to dish out a centralist prescriptive doctrine to businesses.
After opening up his presentation with the obligatory “Kia ora” Mr O’Connor unleashed some interesting observations of the motel industry:
(***The comments and views therein are not necessarily the opinions of this Blog***)
Thank you for inviting me to speak at the Motel Association Annual Conference for 2008.
Moteliers represent the largest accommodation sector in terms of guest nights so your businesses make a significant contribution to New Zealand’s tourism industry.
The Motel Association of New Zealand plays an important role in representing your views as moteliers.
I would like to acknowledge Michael Baines, President Andy Wrighton and the Board as well as the life members and all members of MANZ for their ongoing dialogue with central government. MANZ do a great job at regularly keeping me informed of your concerns as well as giving me insight into how business is going for you on the ground and around the country.
The Value of Tourism to New Zealand
So what’s happening to tourism at the national level? Total tourism expenditure has just reached a record $20.1 billion. These statistics announced this month represent a growth of nearly five percent for the year ended March 2007.
International tourists spent $8.8 billion and domestic visitors $11.3 billion. Tourism has achieved New Zealand’s leading export earner status, and this is even considering the significant increase in dairy exports.
We all know tourism is important for the New Zealand economy and to our communities with tourism supplying one in ten jobs. But while this message is positive, I know we face many challenges such as high fuel costs, the high dollar, environmental concerns and changing market dynamics.
So how can we continue with this growth, when tourism businesses are being confronted by such challenges?
New Zealand Tourism Strategy 2015
We launched the New Zealand Tourism Strategy to 2015 last year, which will guide how we develop the tourism industry over the next seven years.
The Strategy makes sustainable business practices central to the future vision for our industry. Its actions and recommendations seek to ensure that, through to 2015 and beyond, New Zealand’s tourism sector delivers a world class visitor experience.
We say tourism will boost prosperity, attract ongoing investment and take a leading role in protecting and enhancing the environment. And increasingly, communities and regions will recognise and value the benefits of tourism. That is our strategic direction.
The Strategy also sets out what we need to do, together, to overcome the challenges ahead. And I emphasise the word ‘together’ because in the tourism industry, we cannot go out on our own. Our tourism product is 100% Pure New Zealand, our landscape, our people, our events, our culture. For our strategy to succeed, we need buy-in right across the economy. We need each and every New Zealander to understand how important tourism is to this country.
I’m pleased to be able to say that we have huge support for the Strategy across government and from the private sector. In fact, Rod Oram, a senior economics commentator, said it was arguably the best industry strategy we have in New Zealand.
The Ministry of Tourism, Tourism New Zealand and the Tourism Industry Association, have recently drafted a detailed plan to guide the implementation of the Strategy to 2015. The plan sets out the “who” and “when” for each of the Strategy’s 92 actions.
I am in the process of obtaining Cabinet endorsement of the plan and seeking funding for its implementation.
Motel Sector
So how does the motel sector fit into the strategy? The strategy focuses on increasing the value of tourism overall. So for tourism operators that is about business performance, balancing the business year and attracting and retaining skilled staff. It is about improving your business’ performance and delivering a world class visitor experience for both your domestic and international guests.
As moteliers you live and breathe the business, 24 hours a day, seven days a week.
Turnover of moteliers is estimated to be around two years. Your sector is certainly not an easy one and you all make a huge commitment to become and remain moteliers.
We want and need the business of being a motelier to be more profitable with satisfactory year round occupancy.
For the year ended April 2008 there were 1823 motels in New Zealand, that is an extra 241 motels, or 15% increase since 2001. According to the Commercial Accommodation Monitor there was an increase of 4,800 rooms over that same seven year period. This includes new motels as well as expansions to existing premises. So that means more competition, making the goal of economic sustainability for each and every one of you a big challenge. Your challenge and our challenge!
Sector-specific guides
We have developed sector-specific guides to help operators implement the recommendations of the New Zealand Tourism Strategy. The guides outline the ways you can support the shared aims of the Strategy, to support a sustainable tourism industry that delivers maximum benefit for our customers with as few unwanted effects as possible on our environment.
So far, the four-page guides have been developed for three sectors – accommodation and hospitality, transport, and visitor activities. I’m sure you’ll find them useful as a checklist to tick off the actions you are already doing, and find out what else you can do as you develop and strengthen your businesses.
Some of the tips are detailed and specific. Others will require you, either individually or as members of MANZ, to work out how best to implement them in your community, or within the motel sector.
Qualmark Green
An issue I need to raise here today relates to Qualmark Green. As you are aware, Qualmark will be including environmental and social criteria in their assessments from August this year under the Qualmark Green initiative.
Qualmark have had some great positive feedback on the programme. Operators have been reading their Responsible Tourism Guides and are starting to complete their checklists. I understand Qualmark is also hosting a number of workshops around the country to help operators learn more about the criteria and ask questions.
Some MANZ members are questioning the reason for responsible tourism criteria to be included with quality criteria. It’s clear to me that in order to have quality tourism operations we need to be sustainable, not just economically, but environmentally, socially and culturally as well. A number of operators already have excellent environmental strategies in place and those who don’t begin to develop such strategies will be left behind.
In saying this, I understand Qualmark has agreed to an appeal process over the next year for operators whose star gradings would change as a direct result of their score in the Responsible Tourism criteria component. This does recognise the journey that some operators are starting on and that Qualmark is committed to open dialogue with industry over this.
‘100% Pure New Zealand’
It is New Zealand’s natural environment that underpins one of the most successful country tourism brands in the world – ‘100% Pure New Zealand’.
Here in New Zealand, and around the world, there is much greater attention now than ever before on travellers impacts on the environment. Our 100% Pure brand promise means we have to do all we can to protect our environment. International visitors will increasingly seek information to ensure their choices are ethical and sustainable. To deliver on this image and protect what New Zealand families have always enjoyed, we need to take credible and visible steps to reduce our environmental impact and improve our environmental management.
Some of you may have heard me talk at the national tourism conference last year about research which shows that around a third of New Zealanders have purposely avoided buying from companies because of that company’s impact on society or the environment. Up to 1.4 million New Zealanders say they will pay a premium for products and services which have a positive social or environmental benefit.
What these results highlight is an increasing expectation by New Zealanders, as well as our international visitors, that businesses will act responsibly to address these issues. Thanks in part to the great work of the AA and Regional Tourism Organisations throughout the country, domestic tourism still makes up more than half of our tourism spending, so we must listen to this feedback. 72 percent of motel guest nights are from the domestic market, so they are a critical component to the success of your businesses – hardly rocket science!
Our domestic market is now expecting to see evidence that New Zealand businesses are committed to protecting the environment. This may sound like an impossible task but there are always things we can do, every day, to make changes to the way we operate our business.
When you get back after the conference it would be great if you can make time to sit down and look at what changes you could do to improve the environmental management practices of your business. It could start with energy saver light bulbs or putting recycling bins in the motel rooms or changing the cleaning products you use to more eco-friendly products?
I am confident that the Motel sector can see the value in and utilise some of the recommendations from the strategy and the sector guides.
Get the motel voice heard in your community
There are some legitimate concerns from moteliers about development costs set by local government, in particular the costs for commercial properties compared to residential buildings. The motel sector is now competing with the apartment market and some of these properties, as we know, are classed as residential premises. The development costs for an apartment can be as little as two thirds the development cost that a motelier faces. Development costs also vary greatly across councils.
This issue highlights the need for the tourism sector to be represented in local government. We need to remind and inform local authorities about the value of tourism to our regions and the challenges that we face such as the anomalies you face in this area. We need to ensure the tourism voice is heard more frequently in the community.
I know it is a huge commitment given the hours involved in your business but we want to encourage you to get out there and get involved. Let’s read the drafts of our Long-term council community plans as it will set out the priorities for the local authority over the medium to long term. That’s what we call community sustainability.
Thank you.
