YoungTEC Professional Development Program 2018 Week 1: Industry - - PowerPoint PPT Presentation

YoungTEC Professional Development Program 2018

Week 1: Industry Overview & Distribution

Speaker 1: Judy Chen, CEO of Tourism Export Council Speaker 2: Anna Black, Executive Director of General Travel New Zealand

Course Overview

Wellington Auckland Christchurch Queenstown Rotorua/C.N.I

Legend

Capital Major cities

New Zealand

⚫ Auckland = 21 ⚫ Rotorua/C.N.I = 5 ⚫ Wellington = 9 ⚫ Christchurch/Upper

South Island = 9

⚫ Queenstown = 12

PDP Participants 2018 = 55 2017 = 46 2016 = 44

Course Overview ▪ Evening Outline:

➢5.30pm Pre networking ➢6.00pm Introductions and first speaker ➢6.25pm Q&A ➢6.35pm Short break ➢6.45pm Second speaker ➢7.10pm Q&A ➢7.30pm Close

Speaker 1: Judy Chen CEO of Tourism Export Council

INDUSTRY OVERVIEW

Value of Tourism Stakeholders Future of Tourism

VALUE OF TOURISM

▪ International Visitor Arrivals (year ending Apr 2018): 3.8 million ▪ Economic Contribution (year ending Mar 2017):

➢ International $14.5 billion, 20.7% of NZ’s total export earning & #1 ➢ Domestic $21.4 billion ➢ Tourism directly contributes to $14.7 billion (5.9%) of GDP ➢ Tourism directly employed 8.4% of total employment

(Data sources: MBIE & Stats NZ)

VALUE OF TOURISM

▪ Other Contributions/Impacts:

➢Social – e.g. using tourism address local unemployment; opportunity to educate the youth on local legends & stories ➢Infrastructure/other services and facilities– e.g. flight connectivity, roading, local cafes, retail outlets, etc.

STAKEHOLDERS – PUBLIC SECTOR

▪ MBIE ▪ Central Government ▪ Other Government agencies: DOC, INZ, NZTA, MPI ▪ Local councils ▪ Tourism New Zealand ▪ New Zealand Maori Tourism ▪ RTOs / Economic Development Agencies ▪ Education providers

STAKEHOLDERS – PRIVATE SECTOR

▪ Industry Associations: TECNZ, TIA, HPNZ, HNZ, BCA, RVA, etc. ▪ Inbound Tour Operators (ITOs) ▪ Wholesale & retail travel agencies ▪ Airlines ▪ Accommodation providers ▪ Other transport operators ▪ Activities & attractions ▪ F&B & other retail providers ▪ Other service providers: online platforms (OTAs, Airbnb, GDS, channel managers, software, etc), financial services

FUTURE OF TOURISM

▪ Forecast 2023:

➢4.9 million visitors ➢$15.3 billion international visitor expenditure ➢China becomes our #1 market in spend

Great to have continued growth but how can we manage this sustainably?

FUTURE OF TOURISM

▪ Destination management & addressing our challenges:

➢ Conservation and other environmental impact ➢ Social license to operate ➢ Infrastructure: e.g. do we need more toilets for more freedom campers? ➢ People & Skills: how to attract & retain talent? ➢ Regional development & dispersal ➢ Tourism funding: e.g. new international visitor levy? Local taxes? ➢ Our ability to adapt to tech innovations ➢ Data & insight

“Future-Proof our Industry”

Q&A

Short Break

Speaker 2: Anna Black Executive Director General Travel New Zealand

Getting the most of the Distribution Channel

What to expect of your ITO and what they will expect of you.

SOURCES OF BUSINESS

DISTRIBUTION 101

WHAT IS AN ITO/IBO/DMC?

“An Inbound operator is just a middle man who does nothing to add value to my business and takes a huge cut for doing nothing”

Inbound Tour Operator Inbound Operator Destination Management Company

What do we actually do?

For our clients overseas:

Research/recommend product Secure allotments Provide a tariff (all info in one place) Provide product updates Client famils– easier to sell Marketing partnerships Opening new markets Overseas offices to convert & train A one-stop-shop for all NZ product

• including 24/7 support
• one payment
• itinerary narrative – ‘NZ Story’

Proactively seek new wholesalers who are not (yet!) selling NZ

So what do we actually do?

For our supplier partners:

Provide bulk, regular, year round business of many types from many markets

• FIT, group, series, incentive, special interest

Provide payment protection

• assume any credit risk
• deal with foreign currency
• no need to chase overseas for relatively small amounts

Invest in your product (and ours) with clients visits to update, train, encourage more NZ brochure space and grow sales Welcome supplier partner office visits to update our staff We can easily invest several hundred hours of time and effort before any bookings are made that you don’t see

What we ask for in return?

COMMISSION

Remember: Commission is only paid when the sale is made

Rates 18 months in advance Terms and Conditions Product Manual with rates, terms, descriptive text and imagery Same day turnaround for booking/quote requests If fully booked, offering a solution/alternative rather than a simple ‘no can do’ eg different room type, product, date

How much Commission should I pay?

OVERSEAS OVERSEAS OVERSEAS NZ INBOUND NZ PRODUCTS VISITORS TRAVEL AGENT WHOLESALER TOUR OPERATOR 10% commission 10-15% commission 5-10% commission Pay 25-30% commission 10% 15% 20% RRP $110 NETT RETAIL $99 NETT Wholesale $94 NETT ITO $88 RRP $110 Revenue: $11 $5 $6 (6.8%) $88 10% 20% 25% RRP $110 NETT RETAIL $99 NETT Wholesale $88 NETT ITO $83 RRP $110 Revenue: $11 $11 $5 (6%) $83

10% 20% 30% RRP $110 NETT RETAIL $99 NETT Wholesale $83 NETT ITO $77 RRP $110 Revenue: $11 $11 $11 (14%) $77 10% 25% 30% RRP $110 NETT RETAIL $99 NETT Wholesale $83 NETT ITO $77 RRP $110 Revenue: $11 $16 $6 (6.8%) $77

Distribution into the Future

Inbound Tour Operators are reporting record levels of business from all markets, increasing year on year – the wholesale channel is certainly not dead! Tourism goes through highs and lows – at the moment we are riding the wave Recognise the Distribution Channel and where each player sits Pay commission and/or rebates according to the placement of that player in the food chain Every business wants a good MIX of all types of business, YIELDED to the highest level:

• NEWS FLASH – ITOs want that too!!
• work out your lowest acceptable nett rate and work up the distribution

chain from there

• don’t bow to pressure from OTAs for inventory access
• get your market segment mix right, the price right and work with partners

you know and trust

Kia Ora Thank you ☺

YoungTEC Professional Development Program 2018

Week 2: Social Licence & Destination Marketing

Speaker 1: Gavin Oliver, EcoZip Speaker 2: Karly Bent, Northland RTO