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Wine Tourism – an Exciting Partnership Emerges

Hon Mark Burton
22 November 2000 Speech
Wine Tourism – an Exciting Partnership Emerges: Address to the Wine Tourism Conference, Blenheim


Introduction

As a Minister with a number of portfolio responsibilities, I get many speaking invitations - but I must say that the invitation to speak to the inaugural Wine Tourism Conference was one that I accepted with enthusiasm – and I am delighted to be here today.

"Wine Tourism" – There is an easy and natural relationship between the two sectors – wine and tourism are quite distinct industries but ones which are highly complementary and with great potential to develop together.

This key theme of the partnership between wine and tourism is one that I will explore today.

I also want to provide an outline of the initiatives the Government is undertaking to strengthen the ability of industries such as wine and tourism to successfully operate together as partners in the new economy.

Historical Relationships

Interestingly, the wine and tourism industries have a number of similarities in the way they were established in New Zealand. We can look to the late 19th Century period when the Government of the day played a key role in seeking opportunities for and investing in both tourism and wine initiatives.


For instance, the then Government viticulturalist, Romeo Bragato, played a vital role in exploring options for vineyard development and his reports contained insights that are only now being realised. What he saw, essentially, was the potential for New Zealand to produce quality wine.

Similarly, the Government played a key role in New Zealand’s early tourism and played a major role in establishing Rotorua as an international attraction based upon its thermal attractions. The Government was instrumental in making Rotorua, with its spa, health and thermal attractions, the leading visitor destination of its day.

Unfortunately, for a variety of reasons, neither industry was able to flourish until, as they say, its time had come.

For both tourism and wine, it was the last two decades of the 20th Century when each experienced substantial growth in size and quality to become the internationally competitive industries that they are today.

Indeed, it is fair to say that today these sectors represent two of New Zealand’s flagship industries in terms of the high value products and services associated with them.

In many respects the development of these industries since the 1970s has also been closely linked. In particular, the advent of modern jet aircraft greatly assisted the flow of people to and from New Zealand, and around the world generally.

As a result, customers with “world class” expectations and standards travelled to our shores in increasing numbers, and many more New Zealanders travelled overseas to experience what the world had to offer.

This great mixing of ideas and cultures stimulated the development of the wine and tourism industries and many of the service-oriented sectors that support these industries, and which make New Zealand such a vibrant country in which to live.

We have come a long way together and I believe there is a great deal to be gained if we recognise the linkages that exist and how we can work together to further enhance the potential of each industry.

The Tourism Industry

I'd like now to take a look at some of the key features of the tourism industry from my perspective as Tourism Minister, and what it means for New Zealand and for the wine industry.

Tourism is New Zealand’s largest export industry, with over 1.7 million international visitors spending $4.65 billion in New Zealand in the year to September 2000.

Domestic tourism activity is even larger.

While a new Tourism Satellite account is still being prepared, it is clear that total tourism expenditure is currently well over $10 billion a year- a very significant consumer spend in the New Zealand context.

In economic terms, this demand represents a tremendous market opportunity for the wine industry, particularly as a considerable amount of this expenditure is on hospitality goods and services.

Moreover, tourism brings the customer to the wine industry. As such, wine is not just a product to be made and dispatched to distant markets, but a product that is supported by the culture, the service and the social activities surrounding it.
It is certainly valid to view wine tourism, where the customer is an international visitor, as a very effective way of marketing and exporting our wine products.

The Wine Industry

How then, do I view the wine industry from the tourism perspective?

In tourism, it is often stated that the industry is not defined by its products, but by its customer. That is, a meal prepared at a restaurant and sold to some locals having a night out is regarded as being a part of the hospitality industry.

However, if the consumers of that meal were visitors, domestic or offshore, then in addition to the meal being a hospitality sector product, it is also a tourism industry product.

This definition is important because an international visitor will on average spend a total of $2,849 on goods and services while in New Zealand. Some will be core tourism products like travel or accommodation, but much more of it will be on consumer products, including, I suggest, considerable expenditure on wine.

So it is my view that many wine industry operations have an important portion of their activities that could be defined as being in the tourism industry.

Accordingly, let me set out some thoughts I have on the areas that I suggest all of us with an interest in the industry should be paying serious attention:

 Service Standards

The manner in which visitors are treated is a fundamental "acid test" in the tourism sector and it is essential that high standards be applied at all times.

Cellar door and restaurant service standards are critical to an enjoyable vineyard visit and I also know that a happy visitor is much more likely to buy your produce. The tourism sector’s hospitality ethos needs to be central to these tourism-related activities.

Let me illustrate. As Tourism Minister, I receive correspondence from visitors. Some – unfortunately – recounting problems and shortcomings experienced in their visit to New Zealand. Sadly, one poor product or service experience can sour a future customer - and everyone they relay their experience to – for life.

By contrast, I also receive – I'm please to say – correspondence such as this:

Dear Minister
In the company of two friends from Melbourne, I recently spent two weeks in New Zealand. During this period, we were blown away by the high standards of food, wine and service.

Without exception, we experienced not only fine wine and food everywhere we went, but also expert advice and attention from helpful, knowledgeable kiwis throughout the hospitality industry.

It is always good to get excellent service. However, when this is combined with true knowledge of local wines and produce, it is remarkable.

We would like to bring to your attention to some of the businesses that impressed us most of all. These are:
Le Grys Vineyard (Mudhouse Winery) – Marlborough
Highfield Estate – Marlborough
Prenzel Distillery – Marlborough
Hotel d'Urville – Marlborough
Te Kairanga Winery – Martinborough
Retour Restaurant – Christchurch
Lattimer Lodge Hotel – Christchurch
Station House Café – Moana
Hobnail Café – Fox Glacier
Redcliff Café – Te Anau

And my Australian correspondent concludes:
"We are recommending a New Zealand holiday to all our friends….."

This is the very best long-term marketing of the high quality destination that New Zealand is.

I was very pleased to hear that the service-related workshops have been well subscribed at the Conference. As I said, I believe that this is an important area for you to focus on.

 Product Development
This is a key area, as it is through the development of specialised products that the wine industry is able to not just meet demand, but also as we have seen in recent years, to grow the market.

Wine tourism can be the catalyst to the development of a range of complementary activities such as lodges, home-stays, gourmet foods, wine tours and many associated activities.

These relationships need to be understood and they require active co-operation and participation of those involved to be successful.


 Coordination Processes
If you are in the tourism industry, it is essential that you recognise your place in the networks that operate, both at the operational and regional levels, and more widely.

There are many examples of how this can work well such as Toast Martinborough. Through the collective action of a number of wineries, this very successful event has been running for a number of years. On a day to day basis, the wine tour networks and the work of the regional tourism organisations need the support of tourism and wine operators alike to fully realise their potential.

 Sustainability

By this, I mean that both industries have to act responsibly in order to get along. As complementary as they may be, there will be times when conflicts arise and these issues need to be treated with sensitivity. Issues such as usage of chemicals and bird control are a couple of issue that spring to mind in this respect.

It is important to realise that the tourism industry is a complex industry that stands and falls on its international competitiveness and on international perceptions. The same can be said of the wine industry, and it is reassuring that high standards continue to be achieved in the production of New Zealand’s fine wines.

There is certainly an exciting partnership developing between wine and tourism. I note that Appleby's "Grape Escape" scooped the top awards at last month's Nelson Tasman Tourism Awards, with its mix of good food, good wine and local crafts.

I believe the wine industry's involvement in tourism will develop and become more important over time.

To support this viewpoint, I would like to discuss a couple of trends that I believe are emerging in the tourism industry that support the growth of the wine tourism partnership.

Firstly, there is a marked trend towards thematic groupings and networks and we are seeing this in such areas as wine tourism, cultural tourism and adventure tourism.

The new "Hawkes Bay - Wine Country" promotion is one example.

This partnership between winemakers, tourism operators and local authorities has the potential to reap enormous benefits for the Hawkes Bay region. I understand the new marketing strategy is enjoying considerable support from Hawkes Bay residents and businesses.

Groupings such as this provide a tremendous opportunity to define sectors where we have competitive advantages and where we can organise tourism experiences that are unique and of high value.

Secondly, the application of information technologies is accelerating and this will have a number of implications, not all of which are easy to predict.

However, the tremendous support of the Government’s recent e-commerce summit left me in no doubt that these technologies will profoundly change the way business is conducted.

For such high value, differentiated products as wine tourism, there will certainly be opportunities to target those high yielding markets segments where we can best exploit our competitive advantages.

The key message is that e-commerce provides a way for all sectors to be “new economy” industries. E-commerce is a tool and the challenge for New Zealand is to apply these tools to our advantage.


Government Initiatives in Tourism

The Government has an active programme in place to enhance the ability of the tourism sector to strengthen its already significant contribution to New Zealand.

In advancing this programme, the Government has adopted a partnership approach with the industry so that each project can best contribute to assisting the industry to achieve its potential.

The key initiatives include:

 The New Zealand Tourism Strategy

This project is being undertaken in recognition of the need for the tourism industry to develop a strategic focus to assist its development and to examine closely what its relationships are with both its core and associated components.

In this respect, I believe that this process will highlight how it needs to strengthen its links to such areas as wine tourism.

The strategy process itself is being undertaken in partnership between the Government and the industry and, indeed, it is largely an industry-led process, with Evan Davies of the Tourism Industry Association chairing the project's Steering Group.

I expect that the Strategy, to be released next year, will have a profound effect of the industry in terms of highlighting ways and means for the industry to contribute more strongly, and in sustainable ways, to New Zealand’s future well-being.

 Tourism Research

A key issue in the tourism industry over a number of years has been the chronic weakness of the information base to support the decision making processes in the sector.

In response to this, the Government established the Tourism Research Council New Zealand, which is Chaired by Sean Murray of Tourism Holdings Limited and supported by the Office of Tourism and Sport.

Again, the strong private sector representation reinforces the Government’s partnership and facilitative approach to its industry policy.

The Council has already embarked on a substantial work programme, which includes:

 Establishing the core tourism information base so that the contribution of the industry can be accurately measured and understood.

 The provision of authoritative forecasts of tourism future demand and expenditure patterns.

 Facilitating a programme of applied research, which should allow us to emulate some of the work that our counterparts in Australia have already achieved.

 Establishing effective mechanisms for ensuring the work undertaken will be readily available to both the tourism sector and to our associated sectors.

Another area which is of note to wine tourism, is the work being undertaken to improve quality standards for tourism operators. As I noted earlier, a major challenge for tourism is to maintain and enhance the quality of the visitor experience in light of increasing visitor expectations.

As a part of this process, the tourism sector’s quality assessment provider, Qualmark, will shortly be providing me with a business case on options for expanding the role and functions of Qualmark as the key quality assessment provider for the tourism sector.


Conclusion

The wine and tourism sectors are natural partners and I am greatly encouraged that this Conference marks an official recognition of this relationship.

The number and quality of the participants at the Conference reinforces this and indicates to me that considerable momentum has already been built up.

While the Napa and the Barossa are the international yardsticks for wine tourism in the New World, Marlborough and Hawkes Bay, Martinborough, Central Otago, Canterbury, Gisborne, West Auckland and indeed Mangere – with the planned Villa Maria complex – all have the potential to challenge and surpass the very best elsewhere.

I say this with conviction – not only because of the extraordinary quality of our products – but because of the quality of the people who drive our wine and tourism industries.

I have talked this afternoon about many of the synergies between the wine and tourism sectors, but I believe this last point is the most important of all – the people. My great passion for these sectors is driven (not withstanding by dedicated research into the products) by the people involved.

There is a passion and enthusiasm, a belief and a commitment to their endeavours that characterises the people who are the wine and tourism industries.

With all this enthusiasm, there will of course be issues that need to be addressed, but I have no doubt that this most enjoyable of tourism activities has a tremendous future in New Zealand.

I look forward to maintaining a close, a positive and a co-operative working relationship with you.

I wish you well for the remainder of the Conference.

ENDS

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