Visitors spend $82 million a day, according to the the Tourism Industry Association (TIA). Only a fraction of that money is spent on hotels and attractions – most goes on cafes, bars, supermarkets, petrol stations and farmers’ markets.
This presents a massive opportunity for retailers, whether big or small. Tourism is an important economic driver in our provincial towns, and cities. The TIA reported earlier this year that retail spending made up over 40 percent of New Zealand’s $18 billion domestic tourist spend and almost 30 percent of the $12 billion international visitor spend.
New Zealand is littered with unique tourism activities – all driving spend towards places from the Gold Rush activities of Dunedin, to the skiing on Mt Ruapehu, to the art deco experience of Napier, to the fine-dining restaurants of Auckland.
The TIA has released a manifesto urging councils to grasp the tourism opportunity by: catering for visitors strengthening infrastructure, events programming, measuring visitor satisfaction, off-peak marketing, regional development, airport and port development and a commitment to sustainability. The TIA aims to grow annual tourism turnover from $30 billion to $41 billion by 2025.
In the lead-up to the local elections, we asked the aspiring mayoral candidates of the main tourism centres how they saw the relationship between tourism and retail, and what they planned to do to help retailers and boost tourism.
Visitors to Queenstown in the winter come primarily for snow sports such as skiing, snowboarding and even snow shoeing. Many participate in adventure-based activities on land, in the air, and on the water.
In winter the après ski offering is popular, with a diverse range of more than 150 cafes, bars and restaurants catering to the needs of winter visitors.
Queenstown’s retailers benefit from visitors who need specific winter sports gear or those who fancy a general shopping excursion while other members of their party ski. Many shoppers want to purchase items for others besides themselves, and as such, the galleries, gift and souvenir boutiques benefit from this demand.
Mayoral candidate Jim Boult, the former CEO of Christchuch Airport, and former owner of the Shotover Jet, wants to make a contribution back to the community, and has firm views on how to build on Queenstown’s retail and tourism strength.
Q: Can you describe how retailers in Queenstown benefit from tourism?
JB: Queenstown is probably New Zealand’s most tourism-centric town. We have a permanent population in the district of around 30,000 but host 3.5 million in visitor nights per year.
As such while local retail is important and growing, tourism is the life blood.
Every retailer in Queenstown is involved in tourism retail – souvenir shops and the like, down to lesser involvement such as gas stations, supermarkets, [which are] all still receiving a significant portion of their income from tourism.
Q: If you were to become mayor, what is your vision for the town, and is boosting retailers part of that?
JB: Retail in Queenstown in recent years has become notably split between tourism retail in the downtown area and retail for locals and to a growing extent tourists at Frankton.
This split is unlikely to change although with the development of hotels in the Frankton area, retailers at Five Mile and Remarkables Park are likely to see a growing level of tourism retail.
It is unlikely that tourism growth in Queenstown will diminish. The issue for us is to ensure that we have the right balance of visitors generating an appropriate amount of spend in our town.
Q: How do you intend to help support the Queenstown tourist industry, and retailers?
The Queenstown Lakes District Council already supports tourism development in the town through their financial support of Destination Queenstown.
That able body continues to promote the town as New Zealand’s “jewel in the tourism crown.”
The issue for Queenstown retailers is probably not so much getting customers and getting them to spend but improvements to the town area which make it more pleasant and easier to shop in.
That includes consistent upgrading of the townscape, ensuring that some of the more raucous visitors to our town do not interfere with retail patterns and resolving traffic flows which at times restrict access to the central part of town.
2016 elections result: Jim Boult is now mayor of Queenstown.
Wellington pitches itself on ‘doing’ winter well, hence theI’t’s never just winter when it’s in Wellington’ campaign. It has a compact CBD of retail, hospitality and cultural attractions, making for an invigorating break in the depths of winter.
The city has worked on an events strategy to encourage visitors in winter, such as the World of Wearable Arts, Visa Wellington On a Plate, Lux and Beervana.
First Retail managing director Chris Wilkinson says Wellington is unique in that it has the OurCBD initiative. This retail and hospitality-led initiative brings together all the stakeholder groups in the capital to respond to opportunities, and tourism is a key part.
At the moment, it is establishing greater consistency around hours for WOW and Christmas for the ‘Golden Mile’ retailers. Another hot topic is maximising opportunity from the big openings ahead for David Jones on July 28, plus Topshop.
Political and communications consultant Nicola Young is a first-time mayoral candidate who is going for the top job out of a frustration at the current council’s lack of cohesion and direction.
Q: What is your vision for developing the inner city of Wellington?
NY: I want to make the inner city more people-friendly. I live in the heart of Wellington, so walk through the central city most days; this means I see what’s happening – and what’s not. Congestion is a big problem, made worse because State Highway 1 slices through Te Aro; one of our main heritage areas with lots of quirky retailers, and New Zealand’s highest residential growth (almost 50 percent since 2003). I’m working with the ‘Better Te Aro’ group (which includes local retailers) and I’ve also suggested we should look at pedestrianising Lambton Quay – its pavements will become even already crowded with the ‘David Jones effect.’
Q: How would you support retailers to capitalise on the tourism opportunity in Wellington?
NY: Wellington has a lot of independent stores, and they’re the ones that attract visitors. A friend who lives here and in New York prefers shopping in Wellington because the shops are more interesting – whereas New York has the same shops on every block (Banana Republic, for example). We need to improve service levels and remember the ‘customer is always right’. I’m sure I’m not the only one who walks out of shops when the service is off-hand.
Q: How would you support retailers in general?
NY: I’m keen to institute recognition for Wellington’s most treasured retailers, many of them long-established: Regional Wines & Spirits, Moore Wilson’s, Millwood Gallery, Unity Books, Mark Kendall Shoes, Gubbs Shoes, The Cotton Store… I’m thinking of a classy sign, to be displayed in their window.
I campaigned to improve building numbering, and it’s made a real difference as building numbers are essential for anyone relying on GPS. Now 85 percent of buildings are showing the correct street number; it used to be less than 50 percent. Correct building numbers are also critical in emergencies, as
was realised after the Christchurch earthquakes.
Street signs are essential for visitors, so I’d make sure every street is properly signed; plus Wellington’s public lavatories can be hard to find, and there aren’t enough – this is a real problem for families with young children, and older shoppers.
We need to improve the free Wi-Fi in Wellington; it’s not reliable enough especially now that people really depend on their mobile phones for information and maps.
2016 elections result: Justin Lester is now mayor of Wellington.
One of the main tourism drivers for Taupo over winter is skiing and snowboarding, snow play and winter sightseeing on nearby Mt Ruapehu, and the thermal hot pools.
On the ‘bad weather days’ tourists take part in jet boating, scenic cruises on Lake Taupo to visit the Mine Bay Maori rock carvings, adrenaline activities such as bungy jumping and skydiving; and shop or dine.
Tourism in the Great Lake Taupo region was worth $541 million in the year to March 2016. Of this, 44 percent was retail spend and 17.7 percent was food and beverage spend.
David Trewavas is the current mayor, and the only known mayoral candidate to date.
Q: What is your vision for Taupo?
A mix of international and domestic visitors enjoying and spending money in our unique district.
Q: How do you see the relationship between tourism and retailers in Taupo?
The relationship between tourism and retailers is hugely important. Retailers must take advantage of the tourism flows and understand what the tourist wants and needs are and accommodate them.
We survey most tourists, and their needs and they say [they want] good shopping hours, and accessibility.
The tourists are changing every day. The Chinese tend to like the passive activities, whereas the [Kiwi] mum and dad types will bring the boat and go fishing, and the younger visitors will want to go parachute jumping.
Q: Do you have a plan for supporting local retailers, particularly in the off-peak tourist times?
We have a large marketing campaign for shoulder periods, that we will keep quiet for now. The town centre has been a focus. Any retailer that wants to build outside the town centre has to get resource consent. We have a renewals programme and an in-house landscape architect that keeps the town centre fresh. We have spent $500,000 on one street alone.
The arterial route, that diverts traffic away from Taupo’s town centre, has made the town. Lakefront operators are now full without the sound of 500 trucks rumbling through each day.
2016 elections result: David Trewavas was re-elected as mayor of Taupo.
In winter, visitors come to Rotorua for the hot springs and spa experience, biking, canopy tours, and conference and business events.
These tourism activities keep accommodation occupancy rates up and the restaurants and activities and attractions ticking over in the quieter months. The town is seeing new developments like the Lakesyde Business Centre complex attracting new tenants in response to the rising demand and opportunities.
The current mayor Steve Chadwick is going again for the top job.
Q: What is your vision for Rotorua?
SC: My vision is known as ‘Vision 2030.’ I established six councillor-led portfolios with community steering groups setting the priorities for investment and spending. The most successful has been ‘Revitalising our City Heart.’ We have filled a number of empty shops, increased foot traffic in the city spine and are experiencing an increase in retail spending. We value landscaping, design and public art to improve the cityscape.
Q: How do you see the relationship between retailers and tourism?
SC: We understand the value of tourism to our district. This is why the inner-city revitalisation portfolio group, lead by retailers Mike Steiner and Ron Finn, has worked to introduce the Tulip Fest and the night market, both of which are very popular. We have just announced a further farmers’ market to be held on Sunday to bring more people into the inner city. We started this project with a clean up day that is now well supported by the retailers who are integral to the project. There is a group of block champions who spread the messages around projects like ‘Light Up the City’ that is currently underway.
Q: How do you support retailers in the off-peak times?
Destination Rotorua actively works to attract conferences and events to our destination. We have had an incredibly successful mountain bike event called Crankworx.
Over 100 tourism, hotel and motel industry partners contribute partnership funding for our marketing campaign, ‘Famously Rotorua.’ The Ministry of Business, Innovation and Employment has just invested $1.5 million in a mud festival to be held here next year. A new council-controlled organisation (CCO) is being formed to merge Grow Rotorua, our economic development arm, with our tourism CCO. A community advisory group that is currently being formed will support this new entity.
Former retailer Rob Kent is going for the Rotorua mayoralty and says he is well aware of the issues and trends in the retail sector, in New Zealand and overseas.
Q: What is your vision for Rotorua?
RK: When councillors met for the first time in October 2013 it was decided unanimously that the singlemost important priority for Rotorua District was the creation of a cost-effective and efficient council,although you would be hard pushed to find that objective amongst the small print in the “Vision 2030” statements put out by the current Mayor and council staff, or its achievement in current councilperformance.
I believe that a “cost-effective and efficient council” is the only realistically achievable objective over the next three years, and that once this is achieved other desirable outcomes for Rotorua will follow. I would alter that primary objective slightly however, to make it “a cost-effective, efficient, and business-friendly council” to recognise the urgent necessity to encourage economic development in the district.
Q: How do you see the relationship between tourism and retailers in Rotorua?
RK: Modern retailing, with access to on-line shopping, is perhaps less dependent on tourism than it once was, and more dependent, for long-term survival, on the repeat business that comes with giving excellent service, customer loyalty programs, and going that extra little mile.
There are several service stations on my road into town. Do I shop at the one advertising the lowest fuel price today, and a different one with a lower price tomorrow? No, I shop regularly at the one that greets me with a cheery welcome, and by name, even though the fuel may be a few cents more expensive.
Someone else will always have a lower priced product [or] be more desperate to sell than you. Online, without overheads, will always be cheaper. So you have to buy customer loyalty with service, not just expect it to walk in your door.
Tourists are transient, here today, gone tomorrow. These factors are largely out of your control. While tourists provide foot traffic numbers past your shop door that hopefully turns into business, they tend to look to see where the locals shop; which is the most popular restaurant, before parting with their dollars. Take a look at which are the busy restaurants, which are the empty ones – often as not the full ones are full of tourists attracted to an obviously good place by the numbers of locals already seated when they walked past
Look after your locals, they are your bread and butter.
Q: How will you support local retailers, particularly in the off-peak tourist times?
Firstly, by pushing hard for economic growth; investment in the district, which creates jobs. Jobs create wealth. Wealth promotes buying power, and is good for business. If we can bring more jobs to Rotorua we will have more regulars with buying power – and they still shop in the off-peak tourist times.
2016 election result: Steve Chadwick was re-elected as mayor of Rotorua.
This story originally appeared in NZ Retail magazine issue 745 August/September 2016