Posts tagged ‘trade’
By Brad Monaghan
With Expedia voting Wellington New Zealand’s best value city this week, it seems opportune to provide an update on the world of the Online Travel Agent (OTA).
In Australia we undertake a lot of activity with OTAs as Wellington has a strong supply of hotel stock that work in this space, consumers have a greater trust in internet booking than perhaps five years ago, and Australia is pretty short haul – New Zealand is seen as almost domestic in terms of travel (language, proximity, culture etc) – so those here for a few days for business or pleasure dont have the barriers of use that some longer haul destinations have.
The main reasons though that Positively Wellington Tourism undertakes work with OTAs is that they can provide tangible results. They can deliver measureable spikes in bookings, are growing their market share in terms of travel sold and they have massive databases of people hungry for deals. So if we are not getting bookings for Wellington (although that’s certainly the aim), we are generating awareness and ideally getting the data of consumers we know want to take short breaks.
The big boys in this world include Wotif, who are the largest provider in Australia and New Zealand and are also tied up with lastminute.com. Expedia - the world’s largest online travel company - also run Hotels.com and Orbitz tie in their Hotelclub brand in Australasia. Plus there’s the likes of Travelocity, who have Zuji in Australia. You get the idea that this is a pretty busy space, with each parent brand typically running others to attain a greater market share. Confusing? Sort of…
It’s pretty apparent why accommodation providers work with OTAs, but as the RTO – why do we work with them? Depending on the OTA, they need critical mass to get traction, so in Australia you can expect them to have a database of the size of the population of Wellington; to get a message to another market that size is going to be expensive! The other key thing is although it is like pulling teeth in terms of getting sales figures etc, we ensure we get this from the outset. This way we can understand what type of growth we see over campaign vs non campaign activity. An OTA isn’t going to convert someone to go to a destination that they haven’t thought about, but as awareness of our fair city and surrounding wine country grows in Oz, it’s a good tool to convert lookers to bookers.
Why wouldn’t you?
Rate parity. Some OTAs insist on being provided the lowest rate available. While this can be OK in small doses, it doesn’t really lead itself to a strong message for branding - “don’t visit the respective provider, just visit the OTA”; not cool. A better option is to see if the OTA is keen on promoting value-adds such as free car parking, free internet, or 2 for 1 breakfast - whatever has the least effect on bottom line.
We know when Wellington will be quiet; unlike most New Zealand hotspots, our traveler demographic is slightly different. Within Australia we try to marry these times up with periods when we know that airfares are going to be affordable. Whilst we know January isn’t peak in Wellington, it is on trans-Tasman airfares - so pushing a $99 hotel deal with a $700 return flight holds less appeal than a $129 with a $349 return flight deal. Naturally it is different for the domestic market. We aim to push such activity to encourage travel from April – October, working through their own channels - things like solus emails (an email solely about Wellington), buying space on their site, and for the big guys that have greater market share in Australia we have ran some outdoor and radio work.
Positively Wellington Tourism carries out regular trade training in target international markets, generally as part of Tourism New Zealand-organised events. Such visits also offer an opportunity to gain market intelligence to inform our activities and targets. Full trip reports are provided exclusively to PWT’s International Marketing Group, but the below Executive Summary gives a taste of the situation in North America.
• Represent the Wellington & Wairarapa International Marketing Alliance and International Marketing Group at Tourism New Zealand-organised event.
• Train North American Kiwi Specialist agents identified by Tourism New Zealand. • Update Travel Agent Product Managers on Wellington & Wairarapa regional tourism product.
• Work with travel sellers to identify how they can programme more than one night in the region.
State of the Market
Visitor arrivals from the US to New Zealand are down 3.3% in the last year but the Jan-March 2011 quarter was positive, probably due to increased cruise traffic and a late run in the series tour market. Canadian arrivals increased 1% in the year to March and the country has come through the recession better than the US due to commodity demand.
The popularity of package tours has recently seen a revival since the global financial crisis as consumers respond to the value of all inclusive holiday options with a clearly defined price-point. Wellington’s opportunity to attract more Americans will sit in the niche markets surrounding food and wine, film/celebrity (The Hobbit) and second time visitors.
On the downside, America’s attempt to spend its way out of recession has largely failed and despite positive indicators when PWT visited the market in 2010, economic recovery has been slower than expected. Unemployment and housing woes have had a real impact on household wealth and confidence, although the travel market appears most impacted by the loss in value of the US dollar. As the last 12 months have progressed, the high Australian dollar has impacted travel to our part of the world as visiting Australia is often an integral part of any visit to the South Pacific.
On a positive note Air New Zealand have indicated they are likely to increase capacity out of San Francisco and Vancouver to pre-recession levels for the upcoming summer. Also whilst length of stay is still a challenge out of the US because of annual leave entitlements, there is some renewed interest in lengthening stay in Wellington as operators deal with lack of capacity in Christchurch.
The cruise market is strongly associated with America, although significantly more Australians than Americans cruised in New Zealand last year. The big challenge is to make sure that a larger proportion of the potential 136,000 berths that are available for sale in North America are sold there rather than in Australia or New Zealand. TNZ have set real stretch targets for the upcoming summer season of 200,000 plus visitors from North America, the increased air and cruise capacity make this achievable, but a significant challenge.
For many Americans, New Zealand is a small island next to very big Australia and when you visit one, you visit both. Because New Zealand is smaller, it won’t take as long. You can probably drive around it in a few days .. right? There’s evidence to suggest at least 40% of Americans visiting New Zealand also visit Australia on the same trip. In ten days. The percentage is even higher for cruise ship and coach tour passengers.
Complicating things further is the dateline. Have a look at this clip from ‘The West Wing’ as the President’s staff try and figure out the time on the other side of the world; NZ is only 12 hours overnight flight away, but in many itineraries it looks like three days. If you’ve ever travelled ‘coach’ on an American airline, you’ll marvel that any Americans make it here at all.
Wellington has some additional challenges. We’ve never been part of the ‘Golden Route’, the traditional itinerary from Auckland, Rotorua, Christchurch and Queenstown and we’ve got to share time with Australia. ‘What do you mean we can’t do Fiji too???’
I recently attended Kiwi Link North America with Interislander and Te Papa. The ‘School of Cool’, leveraging Wellington’s Lonely Planet accolade, was a hit. The travel agents liked the sound of our compact city, star spotting in Wellywood and knew about lots of the tours and attractions, not to mention our wine region and luxury lodge just over the hill.
The agents reckon the biggest barrier to getting Americans to Wellington is their low amount of vacation time. So rise up America– demand the vacation leave of civilised nations and then you’ll have time to spend two nights in New Zealand’s Capital of Cool.
Which got me thinking – what would you do if you only had 10 days annual leave a year?
By Brad Monaghan
Normally I update the wider Wellington tourism industry with some new marketing initiative we are undertaking in Australia, whether it is a pop up restaurant or an animated marketing campaign. The objective here is to get people to fly in and out of Wellington for a long weekend/short break.
However the bread and butter of my role has a lot to do with the wider travel trade community – whether it be informing them of what is happening within Wellington, scheduling in-market trade training, supporting their front line staff on famils, informing the product teams on what Wellington products have changed hands, what activities have more traction for certain tours and so on. Bottom line is the trade will remain key – in fact some trade estimate that almost two thirds of all Australian holidays to NZ are booked through travel trade channels.
One of my primary objectives here is to get those big Aussie trade companies adding an extra night to Wellington – and so far so good, we have had some success with APT, Grand Pacific, Kirra and Scenic over the past 24 months. However this is easier said than done – the last few years’ tours have maintained a pretty similar price point; putting prices up and extending tours means potentially losing market share to competition, and for Wellington to attain an additional night means that we take a night off another area in New Zealand.
However 2010 was a pretty sweet year for Wellington in the trade space – without doubt the development in 2010 of Carter Observatory, ZEALANDIA’s interactive visitor centre and the CitySights hop-on hop-off bus have added another layer of commissionable export-ready product to the Wellington activity mix, a huge plus for us. Couple that up with the Lonely Planet “Coolest Little Capital” accolade, and our first year of campaign activity, and the trade are taking more notice of “the windy city”.
Clearly 2011 hasn’t started with a hiss and a roar for tourism. When visiting many of the trade in market in March, some reported negative days post-Christchurch quake – that is more cancellations than bookings. Many more stated that the phones just stopped ringing. Now, two months on, things are returning to some sense of normality. However the importance of Christchurch to the travel trade is so evident – pick up any brochure and half the tours will start in and out of the city and do that almost perfect circular holiday route of the South Island. In fact, in 2009 and 2010 over 40% of all Australian holiday arrivals arrived into Christchurch; to put into perspective, over the same period Wellington would have received about 6% of all Australian holiday arrivals.
Looking ahead, the trade expects the start of next season to be tough. But there are opportunities for Wellington. There’s more interest in North Island tours – at consumer shows many of the individuals have stated that as New Zealand is so close they would do one island one year, and the next in a couple of years’ time. The North Island gateway regions are working closely with ski wholesalers to create North Island ski packages pushed on price point . Australia’s high dollar will also help New Zealand, and so will (fingers crossed) a bumper ski season. Tourism New Zealand launched the ‘New Zealand is open’ campaign late March which showcases providers in their local environment, there are also some great deals to be had for consumers at the moment. Looking ahead for the next few months, we will be working closely with the travel trade on educational visits for their frontline staff, develop stronger partnerships with trade and airlines – especially with the extra capacity coming on from the Virgin Blue/Air New Zealand alliance, which sees almost 120 more flights each year to Wellington.
We have some campaign activity up our sleeve too, re-launching pop up restaurants and other “cool” activities to push our fair city and the great wine regions surrounding it as the best little short break for Australians. However a real focus for 2011 will be on working closely with the trade, and ideally helping to position Wellington as a viable start and finish point for some medium length itineraries that the trade can sell through their channels.
Watch this space.