New Zealand has been slipping off the international tourism radar since the Rugby World Cup. Can New Zealand movie-makers put us back on screen with global travelers? The Peter Jackson Formula is about to be put to the test.

This week, Economic Development Minister Steven Joyce, Arts and Culture Minister Chris Finlayson and Broadcasting Minister Craig Foss should be chewing over an officials’ review of New Zealand Film Commission funding schemes, a review inspired by recommendations from the country’s star movie-maker Sir Peter Jackson. Their progress will be critical to the success of Prime Minister John Key’s plan to put New Zealand tourism back on the growth curve with the next round of major movie releases from - Sir Peter Jackson.

Our tourism sector – second only to the dairy industry in terms of its foreign exchange earning capacity – certainly needs a shot in the arm. If the Rugby World Cup hadn’t pulled in an extra 77,000 visitors, there would have almost zero growth in visitor arrivals last year. The latest Ministry of Business Innovation and Enterprise Tourism Industry Monitor says the first quarter of this year saw demand drop by 3.7% and profitability fall by 4.1% compared to the same quarter last year. Sector confidence has slumped by 8 points from the final quarter of 2011, and key industry players are getting grumpy.

Air New Zealand chairman John Palmer, his departing chief executive Rob Fyfe and Martin Snedden, the new chief at the New Zealand Tourism Industry Association, have all blasted NZ Inc for lack of initiative over the last week. “We don't think the progress in tourism is anywhere near what it needs to be," said Palmer. “There's an urgent need to review our approach,” says Fyfe. Snedden believes there’s negativity within the sector and a perception tourism is “stuck in a rut… struggling to come to grips with how to cope with change”.

At Tourism New Zealand, chief executive Kevin Bowler stands firmly behind his board’s 14 year old and increasingly contentious“100% Pure New Zealand” brand. Nevertheless, he pins his hopes for a quick tourism revival on the genius of Jackson and the impact of the global release of his Lord of the Rings prequels – The Hobbit: An Unexpected Journey in November, and The Hobbit: There and Back Again” a year later.

"We aim to show potential travellers that the fantasy of Middle-earth is in fact the reality of New Zealand - and that there is a whole world of experiences to be had and people to meet within the movie-scene style landscapes," Bowler told media at the industry’s recent international tourism expo, TRENZ.

The promotional message – “100% Middle-earth – 100% Pure New Zealand” will be carried world-wide in Tourism New Zealand’s $65 million marketing programme and - thanks to the deal struck last year by the Prime Minister - in a Jackson-directed video track promoting New Zealand as a tourist and filmmaking destination on every Hobbit DVD and download purchased from Warner Digital after the movies are through their peak release period, beginning midway through next year.

Now, here’s the rub. Tourism New Zealand actually has about $10,000 less to spend in the current financial year than it had last year. What’s more the Warner Brothers’ Lord of the Rings Motion Picture Trilogy: Extended Version has been in the market since June last year, with a track titled New Zealand and Middle-earth Interactive”. On top of that, Bowler himself quotes a Ministry survey of Lord Of The Ring’s impact in 2004: 1% of visitors cited the films as the main reason for their visit, and that would have generated $33 million in tourism spend in a year when the total international visitor spend topped $6.5 billion. That was a lift of just 0.5%.

There is a case to be made for New Zealand initiating a film-induced tourism strategy, but the tourism industry needs to make a much deeper commitment before it achieves worthwhile tourism returns. At the time of TRENZ – the industry’s most important international tourism promotion event -  Tourism New Zealand was still working with Sir Peter on the content of his video track, agreeing the detailing of its Middle-earth marketing programme, and seeking advice on the trade mark and intellectual property rights issues that tourism operators will need to observe in their Hobbit-related activities.

Air New Zealand is playing its part. “We will be putting millions of dollars of marketing behind the two films based on The Hobbit to promote New Zealand in new and innovative ways across the globe,” the airline’s general manager market and communications Mike Tod promised last week. Two aircraft will be painted with Hobbit livery and the airline will offer Hobbit-related in-flight experiences on its United Kingdom and North American routes. But it’s the on-the-ground  tourism experiences that need development – more high-profile Tolkien-related attractions, and a well-developed, diverse programme of events and activities.

New Zealand’s film industry is playing its part. Its business is kicking $3.2 billion a year into our economy. 35 off-shore productions were working here last year, contributing more than $563 million – up 15% year on the previous year. Blockbusters like Avatar, 10,000 BC, The Chronicles of Narnia: The Lion, the Witch and the Wardrobe, The Emperor and X-Men Origins: Wolverine have joined Jackson’s Lord of the Rings and Tin Tin in promoting New Zealand as a location, a source of movie-making expertise,and, potentially, a tourism destination. The tax refunds and government film funding programme currently under review are more than earning their keep.

 Every successful international film made in New Zealand or by New Zealanders has a fandom our tourism industry can capture if it does more to align its activities with content being generated by our film industry entrepreneurs. Kevin Bowler says the theme of New Zealand’s film-induced tourism strategy will be: “New Zealand – where fantasy meets reality”. Let’s hope it’s a happy union – not a fatal collision.

Declaration of interest: David Beatson has held senior executive roles at the New Zealand Tourism Board and Air New Zealand.

Comments (12)

by animalspirit on July 23, 2012

NZ "Inc" (which is totally inappropriate for our country) needs to recognise that all that this government is doing is contrary to the needs and wants (my Australian MBA talking here) of potential customers who want, and what we are, increasingly, not willing to give - ie a pristine environment that VALUES its uniqueness and quality..instead we have a "corporate"  government which seems intent on destroying everything that tourists come here for...and the PM hasn't even visited Fiordland??  (happy to hear I am wrong about this).. yikes

by animalspirit on July 23, 2012

Australians are not dumb - much as you seem to want to believe- and the "Peter Jackson Formula" will not work.   Oh dear, never mind, can't be helped- as we used to say over "there" ...

by Rab McDowell on July 23, 2012
Rab McDowell

Do not expect tourism to be the saviour of NZ.

The late Sir Paul Callaghan, shortly after he won the New Zealander of the Year Award, wrote an opinion piece in the Chch Press on NZ’s ability to generate prosperity. He pointed out that our GDP per capita is $120,500 per employee. Australia’s is $174,000. He reckoned we wouldn’t close that gap by working harder as we already work longer hours that most. He said it’s about the nature of the work we do.  Tourism may be one of our major foreign exchange earners but his analysis showed that tourism earns $82,000 per employee. NZ is not going to get rich or catch Aus on that. In contrast Fisher and Paykel Healthcare, maker of hi-tech health aids, generates $400,000. That kind of industry, in his view, is our path to prosperity. He also noted that dairy farming generated $350,000, not far off the hi-tech wonder firms.

In short, every extra job in tourism, rather than in more productive work, makes this country poorer. A look around the world shows that while almost every country promotes tourism, most of those that rely on it are far from wealthy.

 In contrast, dairy farming generates four times more wealth per job than tourism and almost twice the average of Australia with all its mining and natural resources. Yet New Zealand seems to want to make it more difficult for farming and to disparage its farmer’s stewardship of the land..

 It may be hard for some to accept but, if you think farming is a bygone industry and the future is tourism, then every job you take out of dairy farming and put into tourism makes this country not just poorer but rapidly poorer.

by David Beatson on July 24, 2012
David Beatson

Robert - in a perfect world where New Zealand was running flush with job vacancies and work choices for everyone, I could agree with you. But our high tech industries - including the value added sectors of agriculture - are not capable of paying their skilled workers  enough to stop them flying out of the country, and tourism can provide a low-hurdle entry to the world of employment for many less qualified new workers. Tourism is not, and never will be, the complete answer to New Zealand's current plight, but a smarter tourism strategy certainly is part of the solution. Since we don't have the money, we do have to think ... as one of our most renowned scientists once [almost] said.

by Peter Tenby on July 24, 2012
Peter Tenby

Let's face it: You are both right.

When there is a skilled worker shortage in NZ piling on more skills jobs will not make us richer. Employing the unemployed (mostly unskilled or low-skilled) should be a major priority - someone please tell the government please??

Conversely "catching up with aussie" is not going to happen by piling on a huge number of low skilled jobs. Obviously.

The solution is difficult but obvious. More upskilling of people and more job creation or all kinds. Investment, long-term thinking and evidence-based, smart policy.

IN other words the complete opposite of what we are doing now...

by Matthew Percival on July 24, 2012
Matthew Percival

The mythical High Tech economy that gets bandied about is always going to be a myth from a New Zealand perspective.

The growth of New Zealand business is limited by a lack of capital and a lack of capital is particularly problematic for high tech business. The reality for many of these businesses is that they get to a certain threshold and are then sold to offshore interests where the same capital constraints do not apply.

The reality is that New Zealand is and in the foreseeable future will be an agriculture based economy. As such the fortunes of our country are heavily weighted in favour of the prices we can obtain for our agricultural produce.

by Rab McDowell on July 26, 2012
Rab McDowell

Re the responses to my comment.
David – you consider our high tech and high value industries are not capable of paying their skilled workers enough to stop them flying out of the country. If that is true then tourism, which generates one quarter of the prosperity per worker of the high value industries has really got a problem. I think it is not so much that the high value industries are not capable  of paying but that they find they do not need to given the low rates paid by other industries such as tourism.
It is strange then that the country should spend so much on promoting tourism when it generates so little value compared to the high value ones. Should we not be spending more on and getting a better return by promoting the high value ones, even if that means, horror of horrors, promoting dairy farming?
Peter – I think you underestimate the breadth of occupations that need highly skilled workers. The need for highly skilled workers in service industries such as tourism is just as essential as in electronic factories. Even the briefest contact with a service industry will quickly reveal which workers have the skills to make the industry succeed. Given that, I would not consider tourism to be low skilled, just differently skilled. You are wanting to us to tell the government to do something. I hope it is not to go in for job creation. Govts do not create jobs they just get in the way of private enterprise prospering and thereby creating jobs.

by Peter Tenby on July 26, 2012
Peter Tenby

Robert. Care to provide a reference to back that up? Because from what I have seen  it is the countries whose governments get involved who are doing well at the moment. (called state capatalism I think) Those that don't...not so much

The government provide a lot of jobs. And more importantly they are quite often the catalyst for job creation and most certainly training. NZ companies are notorious for uninvesting in their employees. 

And I think the last few years have proved if nothing else that private industry is not going to be helping anyone but their bottom lines. 

Since we consistantly been ranked as one of the top 5 easiest places in the OECD to  do business none of what you say makes sense.

But full marks for blindly repeated neo-conservative dogma...??

by Peter Tenby on July 26, 2012
Peter Tenby

And I am not underestimating anything. There is a vast difference between what is required to train someone up in those industries and those that require university degrees and several years expereince on top of that to accomplish.

by David Beatson on July 27, 2012
David Beatson

Robert – If, as you suggest, our high tech and high value industries have found they do not need to pay internationally competitive rates given the low-rates paid by other New Zealand industries such as tourism, then why are they suffering from skills shortages? My concern is with international tourism where high skills and high tech are both needed to create and manage the development of New Zealand as a globally competitive destination. The spin-off from a smarter tourism strategy is that it will generate a demand for a wide-range of skills in the workforce it employs directly, and benefits for a much wider range of New Zealand businesses that are not directly engaged in tourism but who profit from the additional customers attracted by international tourism promotion. I don’t think we’ll find any solution to our problems by strangling tourism to ensure the blood flows into the high value, high tech sectors of the economy.

by danniel on February 12, 2013

A marvelous country like New Zealand should have to use any image associations to boost it's tourism. An international marketing campaign done right may be all it needs. Take the instance of DMC Jerusalem, they started their campaign a while ago and today people whisper about the possibility of reviving the tourism in the area. I am looking forward to see it happening since we're talking about a country with an extraordinary potential.

by danniel on May 16, 2013

We can only hope tha the tourism will revive but I think we need some more consistent efforts for this. I am actually interested in zoos to visit this summer. Do you think I have some good options for that?

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