Tourism Scrutiny

Today's press release from Labour’s spokesperson for Tourism, Kelvin "Little School" Davis rages against recommendations in a major report reviewing the government's tourism sector agencies.

It has been recommended that the Tourism Ministry be merged into the Ministry of Economic Development  along with other structural and operational changes.

We believe that the report HERE outlines a step in the right direction.

John Key is expected to announce adoption of some of the recommendations within the next few days.

Davis appears to have cheerleaders in current TIA chief executive, Tim Cossar and former TIA and Qualmark chief executive, Fiona Luhrs that have stated their preference for a standalone Ministry.

Ironically Davis's emotive headline "Job losses expected with Tourism Ministry cuts" that is supposed to cause indignation and outrage is music to the ears of most rational folk in the private sector.

We say that the tourism industry is not a sacred cow and the the outputs of all public funding should be scrutinised.

Unlike the state worshipers on the red team, we do not believe that maintaining or increasing state tourism administration will benefit tourism businesses. In fact it will have the opposite effect.

A chilling statistical fact that we must consistently remind ourselves of, is that New Zealand has 1.75 million people working in the wealth-creating private sector. 1.75 million people have to pay tax, alongside corporates, to pay for the livelihoods of 1.75 million wealth-destroying bureaucrats in the State sector, beneficiaries and retirees.

Any increase in efficiencies and reduction in bureaucracy should be celebrated.

Refining Tourism Bureaucracy

The government's efficiency drive has finally caught up with the Ministry of Tourism and Tourism NZ.

A consultancy firm has undertaken a major report that has reviewed the government's tourism sector agencies.

One of the major recommendations in the report is for the Tourism Ministry to be merged into the Ministry of Economic Development. It has been reported that John Key will confirm this along with other structural changes in the next few days.

Other recommendations include: 

• More private sector funding should be sought for tourism marketing.
• Marketing outcomes need to be better qualified.
• Roles of both Ministry of Tourism and Tourism New Zealand need to be defined to reduce duplication.
• Ministry of Tourism needs to qualify the value of scholarship tourism facilities grants totalling $300,000.
• Ministry of Tourism should divest its land management responsibilities to Land Information New Zealand.
• Tourism New Zealand should sell its 60 percent stake in in Qualmark NZ once it becomes financially sustainable to the private sector or to an industry body such as the TIA (more on this later)
• Tourism NZ should reduce the size of its board of directors.

Notably there will be some objection from industry administrators, however we believe that the report outlines a step in the right direction.

The full report is available to read: HERE.

Hotel Implosion

We wrote HERE about how a feature of American culture is the sentiment given to the past by the preservation of many icons of commercialism.

Although Americans are quick to acknowledge the contribution that business entities have played in their past, they don't seem to have a problem with knocking buildings down that have had their day with theatrical relish.

We like the following video of New Frontier that was imploded in spectacular fashion in 2007. The 65-year-old hotel and casino was the second property built on the famous Las Vegas Strip. It was the venue where Elvis Presley made his Las Vegas debut in 1956. It also housed entertainers like Siegfried and Roy, and Wayne Newton; was once owned by eccentric billionaire Howard Hughes.

The final show was a tribute to the past:

Motel Hell on YouTube

The most discerning guest of any motel accommodation is the female rep. This fragile but ruthless subset of guest can be the most difficult to please. If an accommodation owner has a high ratio of female reps that frequently return, then they can be justifiably proud that they are doing something right.

Another subset of guest that will put an accommodation complex to the acid test are children.

If a motel fails to impress a female rep, the consequences are that she will simply never return. With children that are armed with an array of electronic devices the consequences can be a little more severe. A motel that doesn't pass muster through young eyes can be dissed with ritualistic cruelty in front of thousands on YouTube:

Spanish Tourism Marketing

 

It is interesting to ponder if a country that is successful on a world sporting stage will benefit from increased tourism?

A quick look at the official Spain Tourist Board website, Spain.info would suggest that they wish to leverage off their team's popular World Cup win.

Come to think of it, I wouldn't mind a trip to Spain...

Hotels Bolt Ahead In Guest Nights

Maybe the motel industry needs to find new ways to promote itself ;-)

The latest accommodation survey results for May have been released today by Statistics New Zealand. 

Those individual moteliers that have been experiencing a lull in trade can at least console themselves that it is just not them - others are feeling the pain. Generally, motel trade is solar powered. The warmer it gets, the better the trade. There are pockets of exceptions to this of course, particularly near popular ski areas, however most moteliers dread winter.

Overall, total guest nights in May 2010 declined by 6 percent compared with May 2009. After the first four months of the year that recorded increases in guest nights, the first trading month of Winter has broken a positive patch.

In a rare turning of tables, the North Island out performed the South Island by only achieving a 4 percent decline in guest nights, compared to the South Island's 9 percent decrease. 

Eleven of the 12 regions recorded less guest nights in May 2010 than in May 2009 with Auckland isolating itself from the pack with a 6 percent increase.

The regions showing the largest decreases were:

• Canterbury, down 8 percent
• Wellington, down 11 percent
• Nelson/Marlborough/Tasman, down 16 percent. 

International visitor guest nights in May 2010 remained largely unchanged compared with May 2009. 

Kiwis appear to have started hibernating a little early this year with domestic guest nights decreasing by 10 percent in May 2010 compared with May 2009.

For the motel industry, the decline of domestic guest nights was significant and was probably largely responsible for the dramatic movement of guest night distribution between the accommodation sectors.

Hotels continue to scalp trade from other sectors by being the only sector recording more guest nights in May 2010 than in May 2009, up 3 percent.

All other accommodation types had fewer guest nights:

• Motels, down 11 percent
• Holiday parks, down 14 percent
• Backpackers, down 10 percent. 

In May 2010, hotels had the largest share of total guest nights at 40 percent that was their highest share since the survey began. Motels had 32 percent, followed by backpackers at 16 percent.

Excluding holiday parks, the occupancy rate in May 2010 was 39 percent, compared with 42 percent in May 2009. 

Many motel operators may be wishing away 2010 already and optimistically looking forward to 2011. "Just one last tough winter."

Source: Click HERE

The Voice Of The Motel Industry?

Over the years, motels throughout the country have endured general local authority rate increases close to twice the rate of inflation along with the introduction of pan tax, tourism tax, road user tax, CBD retail tax....the list goes on.

Motels have been disproportionately targeted, seemingly based on a perceived ability to pay rather than actual use of goods and services. 

It is obvious that the motel industry has a vested interest in the efficiencies of local government and needs to identify and focus on reducing the rating burden for motel businesses with effective  lobbying and advocacy.

Rodney Hide's proposed fix is the Local Government Act 2002 that has three main principles: 

• that local authorities should operate within a defined fiscal envelope: 
• that local authorities should focus on core activities: 
• that local authority decision - making should be clear, transparent and accountable.

The rhetoric sounds good in principle, however  it is imperative that the motel industry has a voice and is part of the submission process.

We have identified three main trade organisations that have gone into bat for motel businesses and we have critiqued each of their submissions to the select committee considering this important legislation.

We have provided links to the actual submissions made and we encourage you to spend time reading the contents.

We have also subjected each submission to a rigorous assessment process and have awarded a "Motella Mark" star grading out of a possible five stars that gauge the professionalism and validity of the content.


Business NZ 

Their submission is available to view: HERE. 

The submission takes a very clear and principled position that is consistent with the conversation they have been having with their membership for some time.

Main points include:

• Local government's core business should be prescribed.
• Reduction of differential and targeted rating.
• 30% cap on Uniform Annual General Charge be increased or removed.
• Rate levels should be relative to the benefits received not ability to pay.
• Consideration of asset sales
• Greater use of user charges

Business NZ have recommended that the bill proceed.

Overall a solid submission that we have awarded a 4-star "Motella Mark."

Tourism Industry Association of NZ (TIA)

Their submission is available to view: HERE 

Although the TIA is an affiliated member of Business NZ they do not support the premise that local government should be required to focus on core activities.

TIA wish to give local government plenty of wriggle room to subsidise tourism activities. From a rational business perspective this is a difficult position to qualify and TIA may be at risk of not being taken seriously by appearing too self-serving.

Not surprisingly, TIA are therefore generally supportive of targeted rates, however they also support user charges.

We would like to see the TIA acknowledge that they are serving small business owners that feel the pain of local government inefficiencies and rate burdens. We say that lessening the rate burden would reap better returns to tourism businesses than the minimal returns from much of local government's tourism welfare expenditure.

We feel that the TIA may have to further develop the argument that local government should continue to prop up the tourism industry by at least conceding that this should only be done when there is a proven benefit for the community as a whole.

TIA have recommended that the bill not proceed.

Overall an average submission that we have awarded a 3-star "Motella Mark."


Motel Association of NZ (MANZ) 

Their submission is available to view: HERE 

What can we say?

The page and a half of confused rambling took us through a roller coaster of emotion. First horror, then sadness, followed by sympathy and ended in anger.

We believe that the submission speaks volumes; not about the proposed Local Government Act, but points towards serious dysfunction and lack of acumen of an organisation.

It is heartbreaking to see a once proud organisation become a laughing stock with little credibility.

Overall this submission is a joke that will at least give the select committee some light relief from trawling through the hundreds of more weighty submissions. 

We have been generous and have awarded a 1-star "Motella Mark" because be kinda like the new MANZ logo used to fill the first page;-)

White Haven Motor Lodge

We enjoy comparing the American motel industry with our own.

What we love about American culture is that they are sentimental about their past and go out of their way to preserve icons of commercialism. Americans acknowledge the contribution that business entities have played in their past.

The White Haven Motor Lodge in Johnson County Kansas opened in 1957 and  sadly closed last month after 53 years in operation. The original owners, the White family have sold the building and are auctioning off the motel's chattels.

The prized item to be auctioned is the motel's original neon sign that has lured many weary travellers into the motel over the years.



So did the sign sell?

Well yes, the Johnson County Museum edged out other bidders and paid $5,500 for it at auction. As the sign sold, the White family popped a cork on a champagne bottle to celebrate. 

The neon sign will live on at a new museum that will be built and dedicated to suburbia. 

We like that.

ETS Will Encourage Tourism?

When it comes to the study of human behavior, moteliers have a great insight. We were interested to read of an Otago University study that concluded what motel operators already know. When it comes to environmental and social concerns, consumers do not back what they say by their actions.

Otago University research has found that British shoppers care more about the price of fresh produce than its origin or how much of an impact it has on the environment. No kidding!

So why has New Zealand introduced the Emission Trading Scam (ETS) again?

Well, ETS was conceived as a guilt-tax to change Kiwi's behavior of enjoying a modern society. It has been indroduced to promote New Zealand to the world as the epitome of a clean, green 100% pure country - for the marketing of exports, led by foods with consequent benefits for tourism.

So if consumers on the other side of the world don't care about air miles, will more visitors be attracted to New Zealand because of our world-leading ETS scheme?

Should the tourism sector in a small isolated country that relies upon fossil fuels to deliver travelers to our doors be concerned with the introduction of ETS? 

Air New Zealand have begun increasing their prices. Once they get here, tourists will face increased cost at the petrol pump and bear the impost of general cost rises. Can someone more enlightened than us please tell us how this will encourage tourism?

The economic, social and moral implications are immense, however most New Zealanders seem to be oblivious to real-world consequences and would prefer to sit back in smug self denial by letting self-appointed "experts" like Keisha Castle-Hughes speak on their behalf.

Meanwhile the tourism and accommodation industries are happy to plod along and be dictated by institutionalised environmental evangelism in the naive belief that tourism will be stimulated with the impost of increased taxation.

Sorta makes you think...

Motel Currency

One deep thinking fellow motelier has sent us some thoughts on the impact of the Emissions Trading Scam (ETS) that was introduced at the beginning of this month.

"Received my first ETS price notification today (Emissions Trading Scheme.) My gas bill up by $7.50 per month average. An Estimation on Power maybe $40.

I am wondering to

1 Frame it
2 Burn it
3 Recycle it.

The impact of ETS on our industry is going to be something to watch in the future. No doubt there will be a cost, but at what percentage? I have relatives who have always had their own currency and being farmers talk in cows. A new car for example maybe 40 cows. Not money in the bank but cows in the paddock. And possibly a better interest rate than the bank. I have from time to time thought in motel units as a currency but never done this sincerely. However at a recent Motel Conference I heard a motel operator talk in “motel units” The currency in “motel units”

My estimation for our industry is at this stage that ETS may cost us 1 to 2 motel units per month."

We like the idea of using motel units (unit nights) as an easy to understand form of currency in the motel industry. Units are a lifeblood commodity for our industry. Giving away a hard-won unit night really matters and begs closer scrutiny.

It is difficult at this early stage to assess the future cost of ETS. Along with the actual price increases of fuel and power, if we consider the inflationary pressures of this impost that will flow through to most goods and services, maybe the final real cost of ETS will end up adding an additional unit or two on top of the above calculations?