Future state 1: Industry thriving
The conditions for businesses and people to thrive and prosper are in place.
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Fundamental to the future of the visitor economy is the system's capacity to contribute to a positive and sustainable economy, at an individual, local or national level. There are 2 important areas that need to be addressed to achieve this: industry economics and system leadership.
Future state 1 - Industry economics
The visitor industry has a number of structural impediments that create a challenging commercial environment to enable businesses to thrive. The profile of visitors is highly seasonal, skewed to the summer season; however, input costs – both assets and people – are often difficult to scale. There are relatively low barriers to entry and competition too often creates artificial downward pressure on prices despite reasonable levels of demand.
We need to recognise that when a system as large and complex as the visitor economy shifts its direction towards a more balanced approach to achieving the 4 wellbeings, there will be implications for governance structures, roles and responsibilities, decision-making rights, and protocols. These changes are reflected in our recommendations.
Future state 1 - Recommendations
To achieve the desired Future State, we recommend:
1.1 Industry standards – Legislate a tourism business standards framework
We need common industry standards that align industry performance with an integrated approach for delivering the 4 wellbeings. The standards should be supported by incentives and sanctions; and all other tourism standards should be subordinate to this framework.
We recommend that the government funds the development of the framework and administers it. Further details will be provided in our final report.
1.2 Supply management – Create a government-led supply management system
The supply of visitor economy services needs to be managed in a coordinated way by a single public body. This approach must incorporate a set of rules that are universally applicable to all public assets and access rights, and aligned with an intention to achieve the 4 wellbeings. This approach should apply to the allocation and management of concessions, licences, leases and other similar access rights. Legislation will be required to implement these changes at a systemic level and technology solutions can support its implementation. There will be strong engagement with local and district authorities, as well with several government departments to implement this approach.
1.3 Efficient competition – Government endorsement of Commerce Commission authorisations for supplier collaboration
We need to prevent competition that results in wasted surplus capacity and triggers downward competitive pricing. Authorising businesses to coordinate more sustainable pricing and supply through use of Commerce Commission authorisations will enable supplier-led capacity and price management, or government intervention. We recommend that the Government provides a policy direction to the Commission supporting such authorisations with a mechanism to value the public benefits in a consistent manner. The result of authorised collaboration will enable better economic returns on capital assets, more coordinated management
of destinations and further investment by businesses in other wellbeings (which would be a clear requirement of the authorisations – for example: better wages, biodiversity, and climate and community outcomes).
1.4 Employment – Raise employment standards and improve career pathways
A government supported industry agreement, with seed funding, needs to be created, together with the development of a credential pathway to support an attractive career structure.
1.5 Seasonality – Target an even spread of visitors throughout the year
The extremes of low to peak seasons severely impact permanent employment opportunities and productivity. The Government needs to create policy positions which support ways of developing a more even spread of visitors. This could include supporting carefully chosen events, targeting specialist non-seasonal markets (domestic and international), and increasing off-season airline capacity to and within Aotearoa New Zealand.
Future state 1 - System Leadership
The visitor industry is a complex network made up of tens of thousands of small and large businesses which directly or indirectly serve domestic and international customers. They also interact with numerous government departments and a wide range of government portfolios including: Customs, Foreign Affairs, Immigration, Climate Change, local government, Aviation and Conservation (as identified in the Taskforce Terms of Reference). When this visitor industry enterprise system thrives, it can drive economic prosperity and positive impact across all 4 wellbeings.
Future state 1 - Recommendations
To achieve the desired Future State, we recommend:
1.6 Governance – Create a formally recognised public/ private industry leadership body
An industry leadership body needs to be established with a clear mandate to lead the industry forward. This leadership body would oversee implementation of the Taskforce’s recommendations while also working with government and industry to establish the appropriate local and regional industry structure. The principles, structure, responsibilities and accountabilities of the industry leadership body will be expanded on in our final Taskforce report.
