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Travel Industry Luncheon—Sydney

Mark Burton Speech to Travel Industry Luncheon—Sydney

First, I ‘d like to wish all the industry partners who are here today —Airlines, Retail Buying Groups and Wholesalers—a warm welcome and a Happy New Year.

It is a pleasure to be here to address you all today. After all, Australia and New Zealand represent each other’s largest source market for visitors.

In fact, New Zealand has been Australia’s favourite international destination for more than 20 years, and Kiwis have always chosen Australia first for international travel.

2002 has been a strong year for New Zealand tourism.

In December, our travel sector received an early Christmas present with the news that we now host over two million tourists each year—a new milestone in international arrivals.

Australian tourists represent 30% of all inbound arrivals in New Zealand, equating to around 630,000 people annually. Of these, 240,000 are holidaymakers and another 220,000 represent travellers who are visiting friends and family.

And we have been steadily holding our market share ex-Australia. Currently, around 18% of all travellers departing Australia visit New Zealand.

But visitor numbers alone are not enough.

Our goal is to increasingly build a sustainable, yield-driven industry, one that strikes a balance between growing tourism demands and financial returns, while still enhancing both our visitors’ experience and New Zealanders’ quality of life.

In other words, we must ensure that whatever we do in the short term will guarantee the prosperity and growth of the industry in the long term, while still protecting, preserving, and indeed, where possible, enhancing the environments and values of New Zealand.

Building a sustainable tourism market is of real, long-term advantage to both New Zealand and Australia.

To achieve this goal, it is essential to put quality at the heart of the tourism industry. We must all work to ensure that every visitor receives a world-class experience—in their accommodation, their food, the activities they choose and the environments they visit.

These are issues I discussed with your Federal and a number of State Ministers of Tourism in September of last year—issues that are at the heart of industry success for both our countries. It is important for the tourism policy makers in Australia and New Zealand to work together to ensure that we improve efficiency and capitalise fully on the value of our combined tourism sectors.

After all, New Zealand and Australia are both long-haul holiday destinations for visitors from Europe, North America and northern Asia. And in today’s market, it makes good sense for our two countries to work closely together to maximise the benefits of duel destination as well as trans-Tasman travel.

In the wake of the tragic events of September 11, the tourism industry in New Zealand and Australia—indeed, the industry worldwide—has been faced with a daunting environment.

Added to this was last year’s cowardly attack in Bali, where the spectre of terrorism came to our own back yard.

And while prospects for travel to New Zealand are still looking healthy, it has been an extremely tough year for the Australian travel industry. Yet, regardless of either sector’s current state of play, one thing is clear.

Neither New Zealand nor Australia can afford to become complacent in today’s environment. And neither country can afford to undervalue the other in terms of tourism market potential.

Airport taxes have increased significantly ex-Australia in recent years, and these departure charges can inflate airfares to New Zealand by as much as 20%.

In comparison, an AU$2000 fare to the UK carries a tax component comprising a mere 5% of the cost of travel.

Such charges distort the pricing for New Zealand as a destination and hinder the sector’s ability to market New Zealand as a competitive short-haul international destination.

It is my view that a pro-rata approach to departure taxes for short-haul destinations should be considered, as this would ensure some relativity in tax-to-airfare levels.

Alternatively, a split-level tax could be applied to defined short-haul and long-haul international destinations.

Other changes are on the horizon—changes that will certainly impact on the industry.

With the Qantas/Air New Zealand alliance currently being considered by the competition watchdogs in both Australia and New Zealand, as well as the loss of United Airlines’ service in New Zealand, competition amongst trans-Tasman airlines and air services may well be redefined.

Potential new entrants to our market and consumer pressure to reduce air fares will both play a significant role, both in the level of services and who provides them.

Today’s travellers are also demanding more from their retail agents.

As consumers weigh up the Internet as an information and booking source, travel agents must continue to meet the challenge head on by lifting their service levels. I think it’s fair to say that travellers now view their agents as much more than travel organisers. Retail agents are now seen more as expert planners—professionals with a high level of product knowledge, who add significant value to the consumer’s travel experience. Let me conclude by emphasising that New Zealand is a well established, but equally, an evolving and changing destination for Australians.

No longer just a traditional long-haul destination, New Zealand also offers huge diversity for shorter breaks, as well as niche opportunities such as fine food and wine, skiing, and boutique lodge stays.

I am confident that the variety of travel options New Zealand has to offer, the quality of the travel experience, and the accessibility and value of New Zealand will ensure that New Zealand continues to grow and develop as a primary market ex-Australia.

So, an ever changing and evolving tourism and visitor relationship—yes; but a relationship that will continue to grow in importance and mutual benefit.

Thank you again for the opportunity to speak to you today. I wish you all a very prosperous and successful 2003.

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