The tourist trap: How provincial retailers can encourage travellers to their towns

  • News
  • May 17, 2016
  • Elly Strang
The tourist trap: How provincial retailers can encourage travellers to their towns

For provincial towns experiencing hardships, domestic and international tourism may be an untapped opportunity for smaller towns to bring in some business.

While the dairy industry has waned in the last year, tourism has been hailed by economists as a “bright spot” in the economy.

Tourism unofficially overtook dairy as the number one export earner in New Zealand in 2015, raking in $30 billion a year.

Roberts says retail sales play a big part in this figure, with retail spending making up over 40 percent of the $18 billion domestic tourist spend and almost 30 percent of the $12 billion international visitor spend.

As part of its plan to reach a revenue of $41 billion in 2025, the TIA is looking at ways to encourage more “regional dispersal” for travellers.

Tourism New Zealand is going for a similar approach. It recently put all of its $80 million marketing budget into promoting autumn and spring to be just as enjoyable to travel in as summer is. 

Roberts says the TIA wants to encourage both domestic and international visitors off the beaten track onto lesser known tourism routes, such as provincial towns, because it will help the country cater for more visitors.

“We will have problems going forward if we have visitors go to just a handful of locations and coming at the same time of year.”

He says towns looking to attract more tourists need to be very clear about their proposition to visitors.

“That may be their natural attractions, it may be their man-made attractions, it may be (and frequently is) an event that is on at a particular time – events are a very big driver of domestic tourism. It can be the retail offering.

"That’s an area that’s underrepresented in New Zealand – the opportunity for people to travel for a retail experience. It's certainly possible, as we see this in some of the larger towns like Palmerston North - people will travel to it from the surrounding areas because of the retail opportunities that they don’t have in their own location. That actually classifies as tourism spending."

He recommends that businesses should talk to their local regional tourism organisations to understand who they should promote the region to, as well as what feedback there’s been about services missing in the local market.

"They also need to understand their customers who are from out of town. Are their opening hours and products servicing their needs? It's quite easy to fall into the trap of thinking about customers as only locals," he says.

“It comes down to simple things like visitors saying they couldn’t get a local restaurant serving meals past eight o’clock.”

Apart from places like Kaikoura, Roberts says a lot of the time smaller centres have more domestic visitors than international visitors.

It's worth keeping in mind that domestic visitors also account for a greater tourism spend ($18 billion).

"Considerably more is actually spent in New Zealand by New Zealand tourists, and sometimes that's forgotten."

If tourism is going to grow in a town, areas like infrastructure need to be addressed to accommodate more people, he says.

This includes roads in and out of the town, waste systems and public toilets.

"Tourists bring benefits because they come to your town and spend money, but there is infrastructure that needs to be provided as well and it can be a very difficult conversation, especially in places with small ratepayers bases, as to who is going to fund that infrastructure."

He says a national conversation has begun about what assistance and funding can be provided to places that have a small number of local residents, but high visitor rates.

A $12 million regional tourism infrastructure fund for small towns struggling with record tourist numbers was recently announced by Prime Minister John Key. 

Most in the tourism sector, including Roberts, have said this is a good start, but more funding is needed. 

Key says the Government's tourism funding boost is a starting point and will be reviewed later on.

Overall, Roberts says visitors should be on the minds of retailers, as they make up a big part of their customer base.

“Every retailer should at least be aware that their customers can just as easily be from out of town as they are from down the road.”

  • This was part of a feature on provincial retailing published in issue 743 of NZRetail Magazine. 
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