New Zealand Tourism Supply 2050

1

The New Third World: Economic structures

Tourism Supply

Husbandry: Power, Resources

& Regulations

Economic Tectonics: Have’s and Have not’s

Product Clusters Proprietorship: Structures of engagement

Wall Street & Hollywood: Short termism and profit

Connectivity to the World

Speed of change: The impact and

distribution of science and technology

applications

Competition for Labour

Sustainable Structures & Expectations

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Economic Tectonics:Have’s and Have Not’s

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6%7%8%9%

10%11%12%13%14%

WACC by Sector (Sept 2009)PWC Cost of Capital Report

0%

2%

4%

6%

8%

10%

12%

Fin

anci

al Y

ield

%

Financial Yield vs Investor Yield. Economic Sustainability Benchmarks for NZ Hospitality Divisions 1999-2003

Tourism & Leisure WACC

Base Lending Rate

Mortgage Rate

Risk Free Rate

Economic Tectonics:Have’s and Have Not’s

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Husbandry: Power, Resources & Regulations

“A middle aged female professional from Germany imagined New Zealand as the last natural country in the world”.

“People’s generalised fear of environment destruction created the important

socio-cultural frame for New Zealand to create the global appeal as a tourist

Destination” (Ateljevic, 2001).

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Husbandry: Power, Resources & Regulations

“Gradually raising the cost of carbon, which Congress but not the EPA can do, would send signals throughout the economy that would help shift the nation to fuels and practices that wouldn't warm the planet. Research into such fuels and practices would become attractive to investors, and new technologies would emerge. Efficiency would become cost-effective. The government would set the goal, but the market, science and common sense would dictate how the country reached it.”

Government power does not extend beyond goal setting!

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Sustainable Structures and Expectations

7

Sustainable Structures and Expectations

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Connectivity to the World

0

200

400

600

800

1000

2000 2010 2020 2030 2040 2050

Aviation Technology: Future Efficiency

Historical 15% p.a. 50% acceleration 50% Deceleration

For Airports of 21stCentury, market is not defined by distance, but

accessibility!Accessibility = Time + Money + Reliability

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Connectivity to the World

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Speed of Change:

“It is the first step in sociological wisdom, to recognise that the major advances in civilisation are processes that all but wreck the societies in which they occur” [1]

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Speed of Change:

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Wall St and Hollywood:Short-termism & profit

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Wall St and Hollywood:Short-termism & profit

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Product Clusters

International Flows 2010f

Domestic Overnight Flows 2010f

In 2009, visitors stay for median time of 10 days, see an average of 3 regions and engage in 7 activities.

International Visitor product corridors are highly biased towards four centres, Domestic overnight stays reflect a VFR bias towards the 4 main centres.

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Product Clusters

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Proprietorship

“Central government received $613 million more in revenue than it would have had tourism not exist in the economy. On the other hand, it expended $184 million in the various activities it supports relating to the tourism industry. This provides a Net Financial Benefit to central government from tourism of $429 million”. [1]

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Proprietorship

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Competition for LabourLabour Dynamics

Future skills / knowledge required Accommodation Food and Beverage

Transport Activities

and Attractions

Computer / IT / software skills

Financial management

Management / planning skills

Business analysis / development

HR / people / group management

Quality control

Understanding of cultural diversity

Diversified language skills

Relevant product knowledge

Selling / up-selling skills

Sustainability knowledge / awareness

Awareness of compliance requirements

Future Tourism Product Skills

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Competition for Labour