TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 G25 CONTENTS CHAIRMAN’S STATEMENT NOTES TO THE FINANCIAL STATEMENTS 42 REPORT 2 OF SERVICE PERFORMANCE 14 Note 1 Crown Revenue ...........................44 GOVERNANCE Overview ................................................. 14 Note 2 Other Revenue.............................44 AT TOURISM Marketing of New Zealand as a Note 3 Marketing Expenses of Parent..... 44 Visitor Destination................................... 15 NEW ZEALAND 5 Note 4 Other Expenses ........................... 45 CAMPAIGN................................ 15 Note 5 Depreciation & Impairment ......... 46 CHANNEL ................................. 25 Note 6 Total Expenditure of Parent ......... 46 CAPABILITY .............................. 29 MANAGEMENT Implementation of the New Zealand Tourism Note 7 Subsidiary Companies................. 47 AT TOURISM Strategy ................................................. 32 Note 8 Associate Company ..................... 47 NEW ZEALAND 7 Note 9 Cash ........................................... 48 Note 10 Receivables................................. 48 MANAGEMENT Note 11 Property, Plant and Equipment ... 49 CHIEF EXECUTIVE’S STATEMENTS 34 Note 12 Accommodation Bonds................ 49 REPORT 8 Note 13 Reconciliation of Surplus (deﬁcit) with Cash Flow from Operating FINANCIALS 37 Activities..................................... 50 ABOUT TOURISM Note 14 Contingent Liabilities and Contingent Assets ....................... 50 NEW ZEALAND 11 STATEMENT OF RESPONSIBILITY 37 Note 15 Income Tax .................................. 50 Note 16 Management of Risk ................... 50 GUIDE TO THE MAIN BOARD MEMBERS 12 FUNCTIONS OF Note 17 Capital Commitments ................. 51 Note 18 Operating Commitments ............. 51 TOURISM NEW ZEALAND 38 Note 19 Related Party Information ........... 52 STATEMENT OF ACCOUNTING Note 20 Financial Instruments ................. 52 POLICIES 39 Note 21 Remuneration of Employees ........ 53 STATEMENT OF FINANCIAL Note 22 Remuneration of Directors PERFORMANCE 41 of Parent ..................................... 54 Note 23 Impact of Adopting New Zealand STATEMENT OF MOVEMENT Equivalents to IFRS ..................... 54 In a new joint initiative between Google IN EQUITY 41 and Tourism NZ last year, users of STATEMENT OF FINANCIAL Google Earth™ can now see speciﬁc POSITION 42 FIVE-YEAR FINANCIAL tourism information on New Zealand SUMMARY OF PARENT 55 STATEMENT OF and links to www.newzealand.com. The CASH FLOWS 43 AUDIT REPORT 56 initiative was a world-ﬁrst for an NTO. Presented to the House of Representatives pursuant to Section 150 of the Crown Entities Act 2004. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 1 CHAIRMAN’S REPORT WALLY STONE has proven An oth er year has passed, an d again, tourism ustries. to be one of New Z ealan d ’s most val uable ind o this In terms of both foreign exchan ge bro ugh t int its val ue country an d in employment. Tourism spreads len gth an d across small businesses an d communities the ries can . breadth of New Z ealan d as few oth er ind ust The latest Tourism Satellite Account All these ﬁgures are increasing annually It is not, however, just the number ﬁgures for 2006 show that international and much more consistently than of visitors that has increased. More tourism brought $8.3 billion1 into the other key New Zealand industries importantly, the amount these visitors New Zealand economy in the year to (see Figure 1). are spending has also increased. March 2006. When combined with International standards also show that domestic tourism receipts this totals The New Zealand Tourism Board Act New Zealand’s tourism industry is 2 $18.6 billion . In the year to June 2006, 1991 recognised the importance of this holding its own against other markets. the dairy industry contributed $6.6 when it gave Tourism New Zealand the billion, and meat products made it to From 1999 to 2006, the number of role of ensuring “…that New Zealand $4.75 billion3. tourists visiting Australia rose by 23 is so marketed as a visitor destination percent, the US by seven percent, the UK So tourism is, and has been for some time, as to maximise long-term beneﬁts to by 18 percent, while visitors to Canada the largest export earner for our country. were down by nine percent. In that New Zealand.” It has been the industry that underpins period the number of visitors coming to This long-term beneﬁt is clearly New Zealand’s economic growth. New Zealand increased by 48 percent. being unequivocally achieved. There are many ﬁgures that tell this story. The Tourism Satellite Account shows that FIGURE 1: COMPARISON WITH SELECTED PRIMARY EXPORTS YEAR ENDED MARCH tourism now represents 19.2 percent $(BILLION) 2002 2003 2004 2005 2006 of total exports. Indirect value-added 10 industries supporting tourism generate an additional $5.9 billion1. International 8 and domestic tourism makes a direct contribution to Gross Domestic Product 6 (GDP) of $6.9 billion, or 4.8 percent. The tourism industry directly employs 4 5.9 percent of New Zealand’s 2 total workforce – that’s 108,600 New Zealanders who make their living 0 directly from tourism. International and INTERNATIONAL TOURISM DAIRY PRODUCTS, MEAT AND MEAT PRODUCTS WOOD AND WOOD PRODUCTS SEAFOOD INCLUDING CASEIN domestic tourism generates $1.3 billion in goods and services tax (GST) revenue. 2 WWW.TOURISMNEWZEALAND.COM In 1999, for each dollar New Zealand This funding increase followed a report OPERATING ENVIRONMENT spent on promoting tourism, New Zealand commissioned by the Ministry of Tourism In all of this, we must bear in mind the earned approximately $78 back per and conducted by global brand analysis context and challenges that New Zealand visitor. Today the return is around company, Interbrand. This looked at tourism faces. This includes ﬂuctuating $105.4 This is the mark of an industry the return on investment of Tourism exchange rates, labour issues, an that is truly maximising the beneﬁts to New Zealand’s work from 2001 to 2004, increase in the cost of capital, changing New Zealand. and found that there was a huge direct visitor expectations, tourism operators’ When you look at the resources and indirect value returned from the constant struggle with compliance costs behind this growth, it becomes clear New Zealand government’s investment and the protection of the environment. that the tourism industry is working in tourism marketing. extraordinarily hard. For instance, the report found that the EXCHANGE RATE Tourism New Zealand receives and The exchange rate inﬂuenced all our impact of Tourism New Zealand’s $18 spends public funds, which are export industries in the past year, million investment in Australia earned appropriated annually by Parliament and tourism was no exception. the New Zealand economy $467 million through Vote: Tourism. Over the past (a return on investment (ROI) of 26:1). Since 1999, the exchange rate with 10 years the budget for marketing The $20 million investment in the UK currencies in some of our key markets New Zealand allocated through Vote: earned $224 million (ROI of 11:1) and has ﬂuctuated dramatically. The Tourism increased by 26 percent to $70 US dollar moved from US54c to the million in 2007. This is an increase of the $21 million investment in the US New Zealand dollar in June 1999 to $15.5 million compared to a decade ago. earned $309 million (ROI of 16:1). around US80c earlier this year. Similarly During the same period foreign exchange The campaign has also been noticed the UK pound has gone from 33p to brought into this country by tourists by New Zealanders themselves. An the New Zealand dollar to 39p, but the increased by 68 percent; an increase Unlimited magazine poll showed that Japanese Yen has soared from 65 yen of $3.4 billion. ‘100% Pure New Zealand’ was the to 89 Yen to the New Zealand dollar. This increase is extraordinary given second-most recognisable brand in A recent New Zealand Institute of that Vote: Tourism funds decreased by New Zealand after the All Blacks. Economic Research (NZIER) report $250,000 from 1999 to 2006. Only in Although tourism is as old as the All commissioned by the Ministry of Tourism5 2007 did it increase signiﬁcantly to the Blacks, the campaign is not. This is quite found that expenditure by visitors in current $70 million ﬁgure. an achievement after only eight years. New Zealand is sensitive to exchange F I G U R E 2 : T O U R I S M N E W Z E A L A N D C R O W N F U N D I N G 19 9 7 – 2 0 0 7 IN T ER N AT ION A L ONE-OFF VISITOR ANNUAL VOTE : TOURISM* ANNUAL FUNDING** EXPENDITURE INCREASE $MILLION INCREASE $MILLION $MILLION 1999 4,950 – 55.027 8.0 2000 5,930 19.3% 55.027 0% 4.5 2001 6,760 14.2% 55.027 0% – 2002 7,090 4.9% 54.925 -0.19% 4.11 2003 7,560 6.7% 54.382 -1% 1.16 2004 7,710 1.9% 54.382 0% 7.19 2005 8,100 5% 54.382 0% 6.58 2006 8,300 2.8% 54.772 0.7% 15.79 2007 – – 70.301 26% 0.26 * The Vote: Tourism ﬁgure is Tourism New Zealand’s baseline funding from the Crown. ** This ﬁgure is exclusive of GST and excludes any funding received by Tourism New Zealand for America’s Cup activity. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 3 rate ﬂuctuations. For every one percent to invest in staff training – all in order hard work behind the scenes and some increase in the value of the New Zealand to keep ahead of the competition. clever and strategic thinking right from dollar, expenditure per visitor goes down the moment that the 100% Pure When New Zealand’s marketing budget is by 0.8 percent. New Zealand campaign was formed. dwarfed by those of many other regions This thinking must continue if we are The same research found that when the and even the Australian state of Victoria, to maintain and increase the value of New Zealand dollar increases in value, getting past the basics and making an New Zealand’s most important industry. more New Zealanders travel overseas. impact in the world of tourism, is going On average, a one percent strengthening to be increasingly difﬁcult to do. Really, it is quite simple. Our most valuable in the New Zealand dollar will increase assets are our people. Both those from outbound holiday travel by 0.87 percent. MARKETS other countries, and our own, who extend This subdues tourism spending in As the tourism world and the markets their hospitality to our visitors. New Zealand and dampens domestic travel. we are trying to attract change, so do Since my appointment to the board of New Zealand’s parameters change. Tourism New Zealand in 1999, I have LABOUR FORCE Australia is our closest market and had the privilege of working with a group The current 21-year low in unemployment has much potential for New Zealand. of dedicated, passionate New Zealanders (there is a 68.8 percent record high Tourism New Zealand’s new ‘What’s On’ who all consider it an honour to promote participation in the workforce in campaign targets Australians to come and market our beautiful country. I would New Zealand) is being reﬂected in chronic more often, visit the regions and come like to express my sincere gratitude to shortages of skilled labour for the tourism in the shoulder seasons. The likelihood retiring board members Peter Stubbs, industry and an increase in labour costs. is that Australians will become an even Mike Tamaki, Matthew Boyd and larger percentage of our total visitors. Keith Johnston. I would also like to Inﬂationary pressures are still strong and However, their lower average spend acknowledge Geoff Burns who retired expectations of consumer price inﬂation than other markets may affect total as Chairman of the Tourism Industry remain high. Increases in interest rates expenditure ﬁgures in New Zealand. Association last year. They have all increase the cost of capital to tourism Visitors from Japan, one of our highest- made a major contribution and I’m sure businesses’ costs. spending markets, have been decreasing, everyone within the tourism industry will while Chinese arrivals, a short-stay, low- wish them every success in the future. COMPLIANCE spend market, are increasing. In this The cost of running a business is already As one chapter closes another one opens context, New Zealand needs to work to high, with compliance and running costs and I would like to acknowledge the ensure that that its goal of a long-term cutting into much of a business’s proﬁt. beneﬁt for New Zealand is maintained. appointment of John Barrett, Glenys For instance, a tourism business earning Coughlan, Kay McKelvie, and Malcolm $100 for each visitor they host loses ENVIRONMENT Johns to the board of directors. $12.50 to GST and around $20 to the Our environment has always been a key Finally, a huge thank you to the Minister distribution chain – to their wholesaler or part of our identity as New Zealanders. of Tourism, Hon Damien O’Connor, retailer. Together with banking fees and Sustainability has been a key concern Chief Executive, George Hickton and potential concession charges etc, this can of the tourism industry as formalised in our dedicated team spread throughout total up to 40 percent of earnings before the New Zealand Tourism Strategy in the world. The performance of Tourism it is able to consider marketing or labour. 2001. However the last year has seen the New Zealand has, and always will be, a New Zealanders expect our tourism ‘tipping point’ of environmental awareness reﬂection of the level of support we receive industry to continue its record run from many of our visitors. I see this as from the Government, key stakeholders and and that positive growth is a given. a wonderfully positive movement and the tourism industry. We value your support The challenge is to ensure that the tourism businesses are already leading and are therefore pleased to be able to money invested in our tourism industry the way. To remain competitive, tourism present Tourism New Zealand’s annual continues to keep pace with, or stay businesses must review the sustainability report for 2006/07. ahead of, what we need, so that we of their businesses and invest in decreasing can keep ahead of other destinations. their impact on the environment. This WALLY STONE investment will have an additional impact At a local level tourism businesses know on their bottom line and they must be that maintaining the status quo is not prepared for that. enough. They need ﬁnancial resources to be able to invest in new plant, to invest The record growth in tourism over the last in effective and up-to-date marketing, seven years has not come without a lot of Chairman, Tourism New Zealand 1 Tourism Satellite Account 2003-2006. Figures for YE March 2006. www.tourismresearch.govt.nz 2 All ﬁgures are New Zealand dollars unless otherwise stated 3 Statistics New Zealand, External Trade Monitor June 2006 www.statistics.govt.nz 4 Year ended March ﬁgures for tourism income (Tourism Satellite Account), compared to year ended 30 June ﬁgures (Vote Tourism for the Tourism New Zealand ﬁnancial year 1 July–30 June). 5 ‘Exchange Rates and Tourism in New Zealand’ NZIER Report to the Ministry of Tourism July 2007. www.tourismresearch.govt.nz 4 WWW.TOURISMNEWZEALAND.COM GOVERNANCE AT TOURISM NEW ZEALAND The New Zealand Tourism Board (trading and the Inbound Tour Operators Council timed to coincide with the required as Tourism New Zealand) was established Conference. reporting deadlines. on 1 November 1991, under the The board has six scheduled meetings Unless speciﬁcally directed by the provisions of the New Zealand Tourism a year including a two-day meeting in Minister of Tourism, the Tourism Board Act 1991. As a Crown entity, December to review the organisation’s New Zealand Board is the overall and Tourism New Zealand is expected to ongoing strategic direction. As a result ﬁnal body responsible for all decision- comply with the appropriate provisions of the latter meeting, the organisation’s making within Tourism New Zealand. of the Crown Entities Act 2004. goals are set and the formal business There is a direct relationship between the The board of directors of Tourism planning process commenced. Minister of Tourism and the chairman of New Zealand, including the position of Additional board meetings are the board. The chairman, as well as the chairman, are appointed by the Minister scheduled as required. whole board, has regular meetings with of Tourism. A proﬁle of the current the Minister to discuss progress directors of Tourism New Zealand is and issues facing the tourism industry. shown on pages 12 to 13. All directors “BY VIRTUE OF As well as this regular communication receive formal letters of appointment APPOINTMENTS MADE BY and engagement with its shareholding from the Minister of Tourism setting out THE MINISTER OF TOURISM, minister, Tourism New Zealand is their duties, terms and conditions of appointment and the expectations THE BOARD HAS A WIDE cognisant of the need to engage with the of their role. RANGE OF SKILLS IN BOTH wider stakeholder community to promote a broader understanding of tourism By virtue of appointments made by THE TOURISM INDUSTRY AND development and associated issues. the Minister of Tourism, the board THE WIDER COMMERCIAL Tourism New Zealand achieves this has a wide range of skills in both ENVIRONMENT, SPECIFICALLY through regular meetings with various the tourism industry and the wider industry groups, regional seminars run commercial environment, speciﬁcally IN ORGANISATIONAL throughout the year as well as a number in organisational governance. This GOVERNANCE.” of external publications, such as provides for a well-balanced board that Tourism News. enables it to appropriately deal with the Under Section 92 of the Crown Entities The board is conscious of its obligations issues facing its role in the marketing of Act 2004, the board must ensure to ensure that directors avoid any New Zealand as a visitor destination. that the organisation acts in a manner conﬂicts of interest in their decision- Tourism New Zealand introduces each consistent with the Statement of Intent making process. The board ensures and Output Agreement it has negotiated new director to the organisation through proper process is followed and that with the Crown. an induction process involving time spent directors’ interests are formally recorded with each member of the Executive and Tourism New Zealand is required to with any changes or additions being his/her respective team. Directors are report quarterly on its performance disclosed at the start of each meeting. also encouraged, where appropriate, to against these documents. The reports Directors excuse themselves from any attend tourism-related events such as form the basis of discussion and review discussions in which their duty as a TRENZ, the annual Tourism Conference by the board at regular meetings, director could be compromised. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 5 Reporting Standards (IFRS), with effect Three of Tourism New Zealand’s from 1 July 2007) and risk management. executive, including the chief executive, Following each meeting, the chair of are directors of Qualmark and one the audit committee reports back either executive member represents Tourism verbally or through written papers to New Zealand on the i-SITE New Zealand the board, together with appropriate Board. The board is provided with recommendations. ﬁnancial information from each organisation at each board meeting, Day-to-day management of the Tourism New Zealand manages its as well as commentary on performance organisation has been delegated to risks through its risk management and signiﬁcant issues. the chief executive who is directly framework; a process that requires it to accountable to the board through the identify legislative and business risks arising from its strategic direction and chairman. Tourism New Zealand’s “TOURISM NEW ZEALAND Delegated Authorities Policy is set operating environment. Risks identiﬁed by the board and reviewed annually. are reviewed annually by the audit HAS AN AUDIT COMMITTEE Appropriate formal processes are in committee. The chief executive regularly COMPOSED OF FOUR place for reporting back to the board. reports formally to the board on the BOARD MEMBERS WHO ARE matter of new or escalated risks and The chairman and deputy chair meet the processes in place to manage APPOINTED BY THE BOARD.” annually with the chief executive to these appropriately. review performance and establish Tourism New Zealand expects all its performance targets for the following year. Tourism New Zealand conducts its employees and directors to maintain the own internal audits, often with the highest ethical standards and has in Tourism New Zealand has an audit involvement of its external auditors. place an employee code of conduct. committee composed of four board Sites to be audited are agreed by the This is signed by all staff at the time members who are appointed by the board. audit committee and programmes of they join the organisation. Tourism The committee is currently chaired by work are developed with input by the New Zealand is in the process of Susie Johnstone, a chartered accountant; external auditors. The results are developing a formal code of conduct other members are Sean Murray, Kathy reported back to the audit committee. for its board members which will be Guy and Wally Stone. In addition, the board has appointed Gill Cox, also a Tourism New Zealand has a controlling consistent with the code released chartered accountant and past President interest in two subsidiary companies: by the State Services Commission. of the New Zealand Institute of a 60 percent shareholding in Qualmark Chartered Accountants. New Zealand Limited; and (through the terms and conditions of a relationship The committee meets at least three times agreement that meets the criteria a year. It reviews Tourism New Zealand’s determined in IFRS-37 for consolidating internal control framework, external audit investments in subsidiaries) the Visitor relationships and engagement, ﬁnancial Information Network Incorporated (VIN reporting (including progress towards Inc), trading as i-SITE New Zealand. adoption of International Financial 6 WWW.TOURISMNEWZEALAND.COM MANAGEMENT AT TOURISM NEW ZEALAND Tourism New Zealand continually reviews the markets in which it operates and the extent to which it is involved in those markets. As noted on page 11, Tourism New Zealand currently has ofﬁces in 12 countries and conducts marketing activity in 14 markets. Management of the offshore activity is achieved through a regional structure whereby ﬁve regional managers report directly to the General Manager Operations, Tim Hunter. Currently regional managers are located in London, Los Angeles, Shanghai, Tokyo and Sydney. Mitigating exposure to ﬂuctuations in foreign currency exchange rates on normal operating activities in these countries is achieved through the use of foreign exchange instruments. The instruments are matched with anticipated future cash ﬂows in foreign currencies. Tourism New Zealand does not use ﬁnancial instruments for speculative purposes. The board is kept appraised of offshore activity at each board meeting through a report by the General Manager Operations detailing activity by market. The Tourism New Zealand Executive team, who regularly attend board meetings, and who report to the Chief Executive is as follows: KEITH THOMAS – GENERAL MANAGER CAS CARTER – GENERAL MANAGER CORPORATE CORPORATE SERVICES COMMUNICATIONS Keith is responsible for information technology, business Cas is responsible for Tourism New Zealand’s internal and external planning and accountability documentation and the ﬁnance communication. Responsibilities include liaising with stakeholders and human resources aspects of the organisation. such as the tourism industry, government, media and other stakeholders on tourism industry activities and issues. CATHERINE BATES – GENERAL MANAGER CONSUMER MARKETING TIM HUNTER – GENERAL MANAGER OPERATIONS Tim manages Tourism New Zealand’s international operations. Catherine is responsible for managing, leading and contributing This involves coordinating project planning for international to the attainment of Tourism New Zealand’s marketing vision. markets, supporting international trade development work, She works with her team to develop and implement integrated managing the overseas travel industry and online training creative and marketing communications plans to drive and programmes and coordinating trade networking events and deliver Tourism New Zealand’s marketing activities. consumer shows. JANE DENT – GENERAL MANAGER INTERNATIONAL PR Jane’s role is to guide the organisation’s overall public relations DAVID WILKS – GENERAL MANAGER efforts to reﬂect the messages of the global brand campaign. TOURISM DEVELOPMENT David is responsible for supporting the promise of New Zealand Tourism New Zealand achieves PR in its key markets through as a high-quality destination. This is achieved through Tourism events, both offshore and onshore, public relations activity New Zealand’s subsidiary commitments, the i-SITE Visitor Information and the International Media Programme (IMP). Network and Qualmark and broader destination management initiatives. David is executive manager of i-SITE New Zealand and chair of Qualmark. He is also responsible for ensuring that Tourism New Zealand naturally expresses the values of our unique Mäori cultural identity and for managing Tourism New Zealand’s relationship with wider government. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 7 CHIEF EXECUTIVE’S REPORT GEORGE HICKTON executive, Since 1999 when I joined this organisation as chief s in the there have been an extraordinary number of change on, terrorist world. Globalisation and its effect on communicati on travel; attacks, media coverage and the subsequent effect se have all and the surge in numbers of low-cost airlines: the as the last been spoken about at length by many people. But people’s millennium fades to a very distant memory, it is nge. view of that world that is undergoing the most cha Back in 2001 the Strategy formalised and as members of the tourism HIGHLIGHTS – 2006/2007 the tourism industry’s need to focus industry, we are all very aware of what News used to be something that happened on sustainability. Environmental, but a wonderful resource our environment somewhere else, to someone else. We also ﬁnancial, social and cultural. The is. Our visitors, especially from markets watched as things happened around us. This Strategy is part of the process of ﬁguring like the UK, are becoming more aware passive view of the world is disappearing. out where the world is going, where of environmental issues which from a Technology has brought the world into New Zealand wants to go, where the practical and marketing perspective our daily lives – on televisions (digital two meet and how we can take cannot be ignored. This year Tourism or otherwise), on mobile phones, advantage of this. New Zealand is assisting Qualmark to PDAs, MP3 players, screens in shops, develop and implement an environmental In the past year, Tourism New Zealand restaurants and waiting rooms. It has accreditation system. has been working hard to do just allowed us to talk back – posting blogs, The information our visitors receive is that; developing the way we market videos and commentary on the internet. also a vital component in ensuring the New Zealand to plug better into the People are being active about their tourism experience in New Zealand is channels where our target market opinions and those opinions are no the best it can be. are viewing their information. longer conﬁned to heated dinner party discussions or letters to the editor. BEST POSSIBLE EXPERIENCE TOTAL EXPENDITURE BY MARKET YE DECEMBER These days, people have a multitude of Tourism New Zealand markets NZ$ 2005 2006 choices and ways of getting information. New Zealand to the world as a great 1,800,000,000 To get them to listen, engage and be destination. It is important that the 1,600,000,000 inﬂuenced, it is vital to keep in touch experience matches this expectation. 1,400,000,000 with how they are listening and engaging. This is outlined in the New Zealand 1,200,000,000 To do this, we must have a long-term Tourism Strategy and is put into practice 1,000,000,000 plan where the tourism industry and through our majority-owned subsidiary 800,000,000 government work together to be in the Qualmark. There are now 2,000 600,000,000 right place at the right time. operators registered with the scheme. 400,000,000 This is reﬂected in the work that has In the past year, the global movement 200,000,000 been done through the New Zealand in awareness of sustainability has gained 0 AUSTRALIA SOUTH KOREA UK USA JAPAN CHINA GERMANY CANADA TAIWAN SINGAPORE Tourism Strategy. momentum. Both as New Zealanders 8 WWW.TOURISMNEWZEALAND.COM The i-SITE visitor network was set up to appeal to our target market. Moving TOTAL INTERNATIONAL VISITOR ARRIVALS TO NZ ensure that our visitors receive quality images have a much greater effect when YEAR ENDED DEC 05 YEAR ENDED DEC 06 information on tourism experiences trying to convey the depth and appeal 1,000,000 in New Zealand, information that of a destination and wherever possible 900,000 encourages them to do more and stay these are linked to other coverage of 800,000 longer. In the last year this has been New Zealand. 700,000 enhanced by a new nationwide booking 600,000 500,000 system. This electronically links i-SITEs EVENTS 400,000 across the country, giving visitors a All events Tourism New Zealand becomes 300,000 simpler way of planning, and creating involved in aim to increase awareness 200,000 more efﬁciencies for i-SITE staff. of New Zealand as a destination and 100,000 We also have new information in the leverage the 100% Pure New Zealand 0 AUSTRALIA GERMANY CANADA NETHERLANDS UK USA JAPAN CHINA KOREA TAIWAN SINGAPORE HONG KONG INDIA MALAYSIA THAILAND report this year around how our visitors campaign. The events have international feel about New Zealand and the appeal and highlight activities that are campaign. Although much of the data is, of interest to our target market – the in its initial stages, it shows our target Interactive Traveller. TOTAL INTERNATIONAL VISITOR EXPENDITURE YE DECEMBER* market – the Interactive Traveller® From the Montana World of WearableArt NZ$ – is, in many markets, more likely to be and the Ellerslie Flower Show to the 7,000,000,000 aware of New Zealand and the marketing Good Food and Wine Shows in Australia 6,000,000,000 campaign than other people intending and the Mauri Ora event in Tokyo, events to travel long-haul. 5,000,000,000 supported over the past year were varied In both the US and Japan, New Zealand in content but similar in intent. 4,000,000,000 has improved its ranking as preferred We held the ﬁrst Spring Festival last 3,000,000,000 holiday destination, while we have year, bringing together eleven established 2,000,000,000 maintained third-equal place in the UK, New Zealand events under one umbrella 1,000,000,000 under pressure of heavy competition. brand and promoting them to Australians The proportion of the Interactive Traveller as part of the ‘What’s On’ campaign. 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 group that New Zealand attracts is also In Japan, Tourism New Zealand worked * Figures for international visitor expenditure in this increasing. on Mauri Ora, an event showcasing Mäori graph are taken from the International Visitor Survey which excludes international airfares. Tourism New Zealand is continuing with art. The Mäori King was guest of honour the 100% Pure New Zealand campaign at the opening ceremony. The exhibition INTERNATIONAL VISITORS TO NZ BY PURPOSE OF TRAVEL to attract these visitors. Now in its ninth attracted around 72,000 people and year, the campaign is used through all more than 1.9 million Japanese saw HOLIDAY VISIT FRIENDS & RELATIVES BUSINESS 1,400,000 our activity – online, events, international coverage of the event. 1,200,000 media, industry communications, trade Tourism New Zealand also partnered in marketing and advertising. the ‘100% Pure New Zealand’-branded 1,000,000 NZ Travel Café in Tokyo late last year. 800,000 ADVERTISING This venue received good media coverage 600,000 The biggest new campaign development and welcomed 18,779 customers during in the last ﬁnancial year was the its ﬁrst few months of operation. 400,000 launch of ‘What’s On’ – a 100% Pure 200,000 Although we didn’t bring home the New Zealand campaign designed America’s Cup, New Zealand gained wide 0 speciﬁcally to appeal to our target 2006 1999 2000 2001 2002 2003 2004 2005 2007 media coverage for its participation in market in Australia. The campaign has the event in Valencia. Mäori performers revolutionised and modernised the were included in the ofﬁcial opening, way we market ourselves in Australia. a cultural exchange event took place It encourages Australians to come to with the city of Valencia, kapa haka New Zealand in off-peak seasons and performances were held and a waka to travel out to the regions. Its success accompanied the team on their journey is evidenced by the numbers – with to the start of Louis Vuitton Cup races. Australian holiday visitors up every Over 200 key media and inﬂuencers month since the campaign launch. attended the waka arrival and global As usual, our advertising work has media exposure for New Zealand from the focused on broadcast and high-impact, regattas was estimated at NZ$42 million high-quality publications that we know from television alone. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 9 ONLINE Things to Try Before you Die (1.3 million a visit from New Zealand International Our website, www.newzealand.com, is viewership). This combination put Marketing Alliance representatives to the now a comprehensive and interactive New Zealand on prime-time Australian TV UK and Germany. This group met with and one-stop-shop for visitors to New Zealand, for 10 out of 11 days around Easter. reviewed New Zealand product offered by with the number of users of the site key UK and German travel sellers, to help Broadcast highlights in Germany included growing by 19% annually. In the past year them update and target product offerings the Voxtours travel programme (2 million we launched new ‘gateways’ for our key with those demanded by the Interactive circ.), and soap opera Traumschiff (9 markets, making the website even more Traveller. million circ.). useful to our visitors. Each gateway directs We also changed our familiarisation In the US, PR results included promotion visitors to speciﬁc travel offers relevant programme to focus more on product on CBS’ Early Show, a nine-page feature to their country and tailors information development managers. These people in National Geographic Adventure to appeal to their wants and needs. have the most inﬂuence on the type of (500,000 circ.), and a two-page feature The Japanese and Korean websites product that ends up in brochures. in the largest newspaper in the US, were completed last year, giving these USA Today (2.2 million circ.). A proﬁle Other trade training has also been markets an important upgrade in the on hiking also featured on the Great continuing apace. Over 23,000 travel comprehensiveness of information Outdoors website (500,000 unique sellers, product planners and product available in their own language. The visitors per month) and a travel blog on managers were trained during the year. translation of www.newzealand.com Smarter Travel (950,000 unique visitors Tourism New Zealand has now built up into Chinese also commenced and is per month). a comprehensive range of resources that scheduled to be completed next year. is being used by increasing numbers In other quality glossy magazine of wholesalers and retailers. Eleven highlights, South Korean magazine Dove INTERNATIONAL MEDIA thousand people attended trade training ran a 30-page New Zealand feature, while PROGRAMME seminars around the world in the past in Japan an amazing 70-page spread It has been a year of extraordinary media year, while nearly 12,000 online training appeared in Coyote (70,000 circ.). results across all our key markets. The modules were completed. I’d like to thank the Regional Tourism team were even busier than usual, A special focus in this area is China, Organisations and airlines for their help hosting 761 media to the country. This where a three-year trade training project with this very successful programme. was boosted by the 160-person crew from conducted in association with the the UK reality television show Castaway. New Zealand Immigration Service has INDUSTRY COMMUNICATIONS worked to increase the level of knowledge Other highlights included Jack Osbourne This year we did a special edition of ﬁlming two episodes for his third series of Chinese travel agents of New Zealand Regional Rap to keep our stakeholders of his UK Adrenalin Junkie series in as a country and what it has to offer as up to date on activity around the Rugby New Zealand and the BBC ﬁlming several a destination. World Cup. Six other editions were stories for Around the World in 80 Gardens The past year has seen some great produced during the year, keeping the (est. viewership of 4.5 million when developments and achievements in all tourism industry informed of on-the- broadcast in 2008). The Sunday Times’ areas of our 100% Pure New Zealand ground intelligence gathered from our travel section (1.2 million circ.), Times marketing work. The environment that we offshore ofﬁces. Online (9.7 million users per month) and operate in is constantly changing, but I www.timeout.com (1.7 million readers) all We conducted industry seminars, am conﬁdent that the work we are doing featured New Zealand stories. presentations and other industry events is creating a good base to enable us to around New Zealand to share the latest Podcasts are a new area for the team, work with, and utilise or turn, that developments in the marketing campaign, and one that has proven its worth. There change to New Zealand’s advantage. activity in our offshore markets and was a huge response to two New Zealand Thank you to all Tourism New Zealand future trends. Over 3,500 industry podcasts hosted on the UK Guardian staff for their dedication and passion to representatives attended these events newspaper site with over 4,500 downloads. the campaign over the past year. It is during the year. Sydney Morning Herald journalist Bruce a relatively small team in world terms, but one that is doing a fantastic job at Elder was also hosted and wrote a blog TRAVEL TRADE for the paper’s website. Around 46,000 showing the world just what it means Tourism New Zealand has been doing unique visitors went to the site during his to be 100% Pure New Zealand. much work with our overseas ofﬁces to second trip and he has since completed better target and train the international a third trip. travel trade. These people can have a real GEORGE HICKTON impact on destination choice and it is vital Highlights from Australia include: the that they are accurately informed on the Today show (450,000 viewership); New Zealand offering. It is also important reality TV show The Biggest Loser that New Zealand is a priority for them. (average audience 1.291 million); and This year Tourism New Zealand coordinated Chief Executive, Tourism New Zealand 10 WWW.TOURISMNEWZEALAND.COM ABOUT TOURISM NEW ZEALAND lace in l excha nge took p ’s Cup’s A cultura ark The America ain. to m to Sp Valencia om New Zealand move fr Tourism New Zealand is the marketing There are over 100 Tourism New Zealand agency responsible for marketing staff in 12 countries working with the ‘Destination New Zealand’ offshore. 100% Pure New Zealand campaign to market New Zealand as a desirable Travelling has changed dramatically holiday destination. since Tourism New Zealand’s predecessor – the Department of Tourist and Health Tourism is the country’s largest employer, Resorts – was established in 1901. supporting over 108,000 full-time Today visitors have widely differing equivalent jobs directly through tourism motivations, needs and expectations and an estimated 74,500 indirectly. It is of their travelling experience. also New Zealand’s number one foreign exchange earner. Not all of these will match what New Zealand has to offer, so Tourism Today, Tourism New Zealand conﬁdently New Zealand aims to reach those markets New Zealand offshore, safe in travellers whose expectations match what the knowledge that when visitors arrive is on offer. In this way we can attract the the experience provided by the tourism kind of visitor who will do more while they industry will rival any world-class are here, leave New Zealand 100 percent destination. satisﬁed – and tell others to come too. The 100% Pure New Zealand global The 100% Pure New Zealand marketing campaign is Tourism campaign is constantly evolving to help New Zealand’s answer to the challenge reach New Zealand’s target market. of reaching this potential visitor. In an increasingly competitive environment, the campaign offers a consistent message and a way of differentiating New Zealand from other destinations. The 100% Pure New Zealand campaign is used in all our key markets and combines advertising, internet, international media coverage, events and trade training to market New Zealand. 100% Pure New Zealand is constantly evolving to reach our target market. Most recently this has seen the organisation talking more directly to consumers via the internet, mobile phones, social sites, blogs, podcasts and other emerging technologies. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 11 BOARD MEMBERS ector Paul Bin gham Dir irman Wally Ston e Cha tor Susie Joh nston e Deputy Chair Joh n Barrett Direc re c t o r K at h y G u y Di Gleny s Cough Sean Murra lan D y Di re c t o r i re c t o r ec tor Kay McKelvi e Director Jo h n s D i r 12 WWW.TOURISMNEWZEALAND.COM Malcolm WALLY STONE SEAN MURRAY MALCOLM JOHNS CHAIRMAN DIRECTOR DIRECTOR Wally Stone has served on the Sean Murray is general manager Malcolm Johns is chief executive of New Zealand Tourism Board since distribution for Tourism Holdings Intercity Group (NZ) Limited, parent 1999 and was appointed chairman Limited, a broad-based company with company of Intercity Coachlines, in 2002. a range of tourism-related business in Newmans Coach Lines and Kings transportation and visitor attractions, Dolphin Cruises and Eco Tours. He is Currently he holds a number of board activities and services. currently a member of the Northland positions, including chairman of Tourism Development Group and a Whale Watch Kaikoura, Ngai Tahu Sean’s career in the tourism sector former director and deputy chair of Group Board and Ngai Tahu Holding has a strong focus on strategic the NZ Tourism Industry Association. Corporation. marketing and planning, public policy Malcolm has extensive commercial and general management, including experience in international tourism SUSIE JOHNSTONE industry positions in San Francisco, having held senior management and London and Melbourne. DEPUTY CHAIR governance roles both in New Zealand Susie is a director of the chartered and internationally. accountancy ﬁrm Shand Thomson. JOHN BARRETT She has held governance roles on the DIRECTOR GLENYS COUGHLAN boards of Telford Rural Polytechnic, John Barrett is managing director of the New Zealand Hockey Federation Kapiti Island Alive & Kapiti Nature DIRECTOR Glenys, MA and MBA, is chief and the Institute of Chartered Lodge, a family eco-tourism operation. executive of NBPR (public relations) Accountants. She is also currently a John is also chairman of the NZ Mäori and Dazzle Events – both part of the board member of the New Zealand Tourism Council and the Wellington Acumen Group of which she is a co- Blood Service and the Otago District Regional Mäori Tourism Organisation, owner and director. Health Board. Te Ara a Maui. He sits on the Aviation Tourism & Travel Training Organisation Her twenty years experience in the PAUL BINGHAM (ATTTO) board and a number of tourism industry includes roles as non-tourism related organisations. chief executive of TIA and in senior DIRECTOR John’s primary tourism interests are management with Air New Zealand. Paul Bingham is managing director of sustainability, the conservation estate, She is currently a director of Te Papa Black Cat Group, winner of the 2003 and Mäori development. and the Wellington Regional Economic New Zealand Tourism Supreme Award. Development Agency, chair of He is Chairman of Christchurch and Canterbury Tourism and is a past KAY MCKELVIE Positively Wellington Tourism and a trustee of the PATA NZ Trust. member of the Tourism Research DIRECTOR Council New Zealand, and the Banks Kay McKelvie was appointed chair Peninsula Tourism and Economic of Waitemata DHB in 2001 and was Development Board. re-appointed in 2004. She is also chair of Quotable Value and a director Previously, he has held positions of the Word Pictures Ltd – a private with Tourism Holdings Ltd and media production company. Air New Zealand. She has previously been chair of KATHY GUY District Health Boards NZ, Chair of Finance and Property – Auckland DIRECTOR City Council, a director of the NZ Kathy Guy has over 20 years’ Lotteries Commission and Professional experience within the tourism Standards Director of the Auckland industry, joining the Bayview District Law Society. International Group of Hotels and Resorts in 1990. She has been chairperson of Tourism Lake Taupo and was instrumental in the setting up of The Ruapehu Marketing Group. Kathy is currently Group General Manager, Chateau Tongariro and Wairakei Resort. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 13 STATEMENT Visitors to New Zealand are generally categorised into three areas – ‘Holiday’, ‘Visiting Friends and Relatives’ (VFR), and ‘Business’ travellers. OF SERVICE Though Tourism New Zealand’s efforts target all groups, the visitors Tourism New Zealand can have the most impact on are those on holiday, therefore the marketing campaign is targeted at this PERFORMANCE group of visitors. Following from this, Tourism New Zealand’s reporting is focused on this group, and many ﬁgures within this report are for holidaymakers only. OVERVIEW This report covers Tourism New Zealand’s service performance The three major outputs in this Output Class reﬂect the three for the year ending 30 June 2007 against the objectives set key components of Tourism New Zealand’s overarching strategy out in the 2006/07 Statement of Intent. and include: Tourism New Zealand’s resource allocation decisions were based on the extent to which each proposed activity would contribute OUTPUT ONE: CAMPAIGN towards its objectives and the delivery of outputs contained in Activities within this output are focused on raising awareness of the 2006/07 Statement of Intent. ‘Destination New Zealand’ and preference to travel here through the 100% Pure New Zealand global marketing campaign. Tourism New Zealand’s Output Plan for 2006/07, agreed with the Minister of Tourism, contains more detailed OUTPUT TWO: CHANNEL performance measures. Activities within this output are directed towards converting This Statement of Service Performance includes reporting traveller interest in ‘Destination New Zealand’ into growth in against priorities in the Statement of Intent (SOI) and actual travel and activity. against the additional performance measures contained in the Output Plan. OUTPUT THREE: CAPABILITY The Ministry of Tourism provides support to the Minister Activities within this output focus on assisting the development in monitoring achievement by Tourism New Zealand of its of the tourism sector to deliver quality visitor experiences performance targets and identifying areas and using market research to measure visitor satisfaction for improvement. and consumer trends to inform strategy. In 2006/07, Tourism New Zealand’s activities were funded through two Output Classes, as follows: 2. IMPLEMENTATION OF THE TOURISM STRATEGY 1. MARKETING OF NEW ZEALAND AS A VISITOR ACTUAL BUDGET DESTINATION Revenue $259,000 $135,000 ACTUAL BUDGET Expenditure $194,000 $135,000 Revenue $69,001,000 $69,001,000 This Output Class includes a range of initiatives to implement Expenditure $69,753,000 $69,501,000 the New Zealand Tourism Strategy 2010, with funding allocated Marketing services involve promoting New Zealand in international by Government across a number of organisations. Tourism markets as a visitor destination. This includes consumer New Zealand’s activities within this Output Class involve advertising, promotion through media and events, training for the development of a Qualmark New Zealand environmental international travel sellers and communication strategies. accreditation scheme for operators and activities to enhance the Visitor Information Network (now trading as i-SITE These activities are supported by product marketing, marketing New Zealand). research, tourism development and stakeholder communications and are developed in consultation and partnership with the We report on Tourism New Zealand’s speciﬁc achievements tourism industry. under each of these Output Classes on the following pages. 14 WWW.TOURISMNEWZEALAND.COM MARKETING from the OF NEW ZEALAND “A 160-person crew BBC came to New in early 2007 to ﬁ Zealand lm the away.” reality TV show Cast AS A VISITOR DESTINATION: CAMPAIGN The Tourism New Zealand global marketing advertising and the performance of the questions (particularly regarding campaign, 100% Pure New Zealand, seeks 100% Pure New Zealand campaign in awareness) were asked, as well as to establish New Zealand as a ‘top of mind’ designated markets. This enabled more the addition of questions regarding destination for travellers seeking authentic frequent and greater depth of information preference and intention to travel to experiences that connect directly with our to be collected across a broad range of New Zealand. land and its people. markets. TNSNZ’s research method involves The campaign positions New Zealand From 2003-2006, Tourism New Zealand the use of global online panels, with as a sophisticated, spirited, modern contracted Roy Morgan Research to track information collected on a rolling, oasis on the edge of the Paciﬁc Ocean. campaign performance in Australia, quarterly basis across Tourism It promotes the core essence of the the USA and the UK. Information was New Zealand’s seven key international New Zealand experience, showing visitors collected via an online diary, which markets: Australia, the UK, USA, Japan, how they can interact with our culture participants ﬁlled in over the period of China, South Korea and Germany. and natural environment. one month, every year, detailing their Given 2006/07 was a period of transition travel behaviour (relating to awareness of It is targeted at potential travellers whose between research providers and New Zealand destination and campaign expectations match what New Zealand consequent changes in measurement advertising and preference and intention has to offer. These people travel regularly, techniques, direct comparisons between to visit New Zealand). participate in a wide range of tourism information collected previously through experiences, actively participate in a Because of issues with sample size Roy Morgan Research and information natural environment, are environmentally in markets outside Australia, Tourism collected since the end of 2006 through and culturally-aware and who seek New Zealand re-tendered this research TNSNZ, has not been possible. authentic and new experiences and towards the end of 2006. It was awarded In respect of the 2006/07 ﬁnancial year, want to share them with others. Tourism to global research company, TNS results for the period April-June 2007 New Zealand refers to these visitors as New Zealand (TNSNZ). In reviewing were not obtained in time to be included the ‘Interactive Traveller®’. providers, Tourism New Zealand took in this report as there is an approximate the opportunity to reﬁne the awareness, three-month time lag between the time METHODOLOGY CHANGE preference and intention measures to data is collected and the time TNSNZ Mid-way through 2006/07, Tourism obtain a better indication of actual completes analysis and reporting to New Zealand changed the way it behaviour of participants. This resulted Tourism New Zealand. measured awareness of New Zealand in changes in the way in which some TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 15 M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / C A MPA I GN PROMPTED AWARENESS OF NEW ZEALAND AS A TRAVEL DESTINATION* MEASURE Maintain prompted awareness levels for New Zealand as a travel destination, expressed in percentage terms. Trend data for Australia will be reported bi-annually and for the US and UK by 30 June 20071. O C T- D E C 0 6 JAN-MAR 07 S TAT U S • Interactive Travellers: Australia 47% 55% Achieved USA 21% 24% Achieved UK 31% 28% Not Achieved • Non-Interactive Travellers: Australia 38% 50% Achieved • Long Haul Travel Intenders: USA 20% 20% Achieved UK 25% 26% Achieved COMMENT Prior to October 2006, marketing performance measures were obtained from the Roy Morgan, Holiday Tracking Survey. This self- completion questionnaire asked the following question: ‘In the last four weeks, for which of these overseas destinations have you read, seen or heard anything on vacations or travel?’ Post October 2006, measures were obtained from Tourism New Zealand’s Campaign Tracking and Development Research, using an online methodology provided by TNSNZ. The question asked was: ‘In the last three months, for which of these overseas destinations have you read, heard, or seen anything about holidays and travel?’ 1 Data for Australia will compare all holiday travellers and Interactive Travellers. Data for the UK and USA and any other long haul markets will compare Long Haul Travel Intenders (LHTIs) and Interactive Travellers. PROMPTED AWARENESS LEVELS OF THE 100% PURE NEW ZEALAND CAMPAIGN* MEASURE Report on prompted awareness levels for the 100% Pure campaign in Australia, the UK and USA, expressed in percentage terms. O C T- D E C 0 6 JAN-MAR 07 S TAT U S • Interactive Travellers: Achieved Australia 49% 44% USA 21% 22% UK 29% 32% • Non-Interactive Travellers: Australia 36% 37% • Long Haul Travel Intenders: USA 18% 18% UK 26% 29% COMMENT Prompted awareness over both quarters for Interactive Travellers was higher than for non-Interactive Travellers. Prior to October 2006, marketing performance measures were obtained from the Roy Morgan, Holiday Tracking Survey. This self-completion questionnaire asked the following question: ‘Below are some phrases often used in holiday advertisements. Which of these phrases have you read, seen or heard of before?’ (100% Pure tagline is displayed). Post October 2006, measures were obtained from Tourism New Zealand’s Campaign Tracking and Development Research, using an online methodology provided by TNSNZ. The question is consistent with the previous measure. * Given the change of research provider in late 2006, and the consequent change in data collection methods, it was not possible to provide comparative trend data for these measures pre-October 2006. 16 WWW.TOURISMNEWZEALAND.COM M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / C A MPA I GN NEW ZEALAND’S RANKING AS A PREFERRED HOLIDAY DESTINATION MEASURE Maintain New Zealand’s number one ranking as a preferred holiday destination with Interactive Travellers in Australia2. O C T- D E C 0 6 JAN-MAR 07 S TAT U S % RANKING % RANKING Australia 24% 1st = with England 25% 2nd after England Partially and USA (27%) Achieved COMMENT Results reported showed that preference remained stable for New Zealand between quarters (24-25 percent). However, during January-March 2007, England had a slight increase in preference resulting in New Zealand dropping to 2nd place for this quarter. 2 This reports the ﬁve most preferred destinations that Interactive Travellers would like to visit in the next three years for holiday/leisure purposes. The result reported is expressed in % terms of those respondents who ranked New Zealand in their top ﬁve preferred destinations, alongside comparative destination rankings. MEASURE Improve New Zealand’s ranking as a preferred holiday destination with Interactive Travellers in speciﬁed destinations (USA, the UK and Japan). O C T- D E C 0 6 JAN-MAR 07 S TAT U S % RANKING % RANKING USA 12% 10th 14% 9th = with Achieved South Africa UK 23% 3rd 20% 3rd = with Italy and Partially Caribbean Islands Achieved Japan 15% 8th 20% 5th = with the US Achieved (excluding Hawaii) Assisted by the Tourism New Zealand International Media Programme, Australian travel/surﬁng/cooking show ‘Surf the Menu’ ﬁlmed a series here last year. Estimated viewership was 1.3 million in Australia, and the series was sold to 96 countries worldwide. * Given the change of research provider in late 2006, and the consequent change in data collection methods, it was not possible to provide comparative trend data for these measures pre-October 2006. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 17 M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / C A MPA I GN INTENTION TO TRAVEL TO NEW ZEALAND MEASURE Report on intention to travel to New Zealand expressed in percentage terms. Trend data for Australia will be reported bi-annually and for the US and UK by 30 June 2007. O C T- D E C 0 6 JAN-MAR 07 S TAT U S • Interactive Travellers: Achieved Australia 6% 8% USA 2% 6% UK 8% 6% • Non-Interactive Travellers: Australia 8% 6% USA 3% 3% UK 4% 3% COMMENT Prior to October 2006, marketing performance measures were obtained from the Roy Morgan, Holiday Tracking Survey. This self- completion questionnaire asked the following question: ‘Thinking about your next short/long trip. Where will you stay for at least one night on that next short/long trip? (variable on the database limits responses to those who are intending their travel in the next 12 months (Australia) or the next three years (USA and UK). Post October 2006, measures were obtained from Tourism New Zealand’s Campaign Tracking and Development Research, using an online methodology provided by TNSNZ. The question asked was: ‘Which of your top ﬁve destinations would you most like to visit next? (further ﬁltering applies). Six regions of New Zealand participated in the s year’s Tourism New Zealand-organised stand at thi rne. Good Food & Wine shows in Sydney and Melbou Given the change of research provider in late 2006, and the consequent change in data collection methods, it was not possible to provide comparative trend data for these measures pre-October 2006. 18 WWW.TOURISMNEWZEALAND.COM M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / C A MPA I GN CONVERSION RATIO MEASURE Improve the conversion ratio between awareness, preference and intention – and actual holiday arrivals for speciﬁed markets (Australia, the UK and the USA). R E S U LT S TAT U S Australia • 51 percent of total Interactive Travellers surveyed were aware of New Zealand advertising. Achieved Conversion ratio: 37 percent of this group (Interactive Travellers that were aware of New Zealand advertising) also had a preference to visit New Zealand. • 25 percent of Interactive Travellers surveyed had a preference to visit New Zealand. Conversion ratio: 29 percent of this group (Interactive Travellers who had a preference to visit New Zealand) also intended to visit. • Actual holiday arrivals from Australia were 358,036 at YE June 2007, a 5.4 percent increase from YE June 2006. USA • 23 percent of Interactive Travellers surveyed were aware of New Zealand advertising. Conversion ratio: 31 percent of this group (Interactive Travellers aware of New Zealand advertising) also had a preference to visit New Zealand. • 13 percent of total Interactive Travellers surveyed had a preference to visit New Zealand. Conversion ratio: 30 percent of this group (Interactive Travellers with a preference to visit New Zealand) also intended to visit. • Actual holiday arrivals from the USA were 134,736 at YE June 2007, a 1.0 percent increase from YE June 2006. UK • 30 percent of total Interactive Travellers surveyed were aware of New Zealand advertising. Conversion ratio: 38 percent of this group (Interactive Travellers who were aware of New Zealand advertising) also had a preference to visit New Zealand. • 22 percent of total Interactive Travellers surveyed had a preference to visit New Zealand. Conversion ratio: 33 percent of this group (Interactive Travellers with a preference to visit New Zealand) also intended to visit. • Actual holiday arrivals from the UK were 154,520 at YE June 2007, a 3.2 percent increase from YE June 2006. COMMENT This was a new performance measure for 2006/07. Results for each of the Australia, USA and UK markets are based on a total sample of 603 Interactive Travellers surveyed over the December 2006 and March 2007 quarters (which relates to the period for which data was collected and the results available in 2006/07 using the new research methodology provided by TNSNZ). TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 19 M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / C A MPA I GN HOLIDAY ARRIVALS FROM MAIN MARKETS MEASURE Provide quarterly trend data for holiday arrivals from main markets, including Australia, the UK, the USA, Japan, Korea, China and Germany. R E S U LT YE JUN 06 YE JUN 07 % CHANGE S TAT U S TOTAL HOLIDAY ARRIVALS 905,125 934,410 +3.2% Achieved Australia 339,535 358,036 +5.4% UK 149,708 154,520 +3.2% USA 133,432 134,736 +1.0% Japan 114,610 99,375 -13.3% Korea 75,066 78,092 +4.0% China 50,722 68,271 +34.6% Germany 42,052 41,380 -1.6% COMMENT While the upward trend for growth in holiday arrival numbers has continued over the last ﬁve years, the actual rate of increase has varied over time. For YE June 2007, holiday arrivals were up 3.2 percent when compared with the YE June 2006. See quarterly trend data below. KEY MARKET HOLIDAY ARRIVALS (2002–2007) This table shows the changes in visitor arrivals, per quarter, over the last ﬁve years. The peaks and troughs over the course of the year mainly relate to seasonality. That is, New Zealand attracts a greater number of visitors in summer than in winter, spring or autumn. 100,000 90,000 80,000 NUMBER OF HOLIDAY ARRIVALS AUSTRALIA 70,000 60,000 50,000 40,000 30,000 UK 20,000 USA JAPAN 10,000 KOREA (REPUBLIC OF) CHINA GERMANY 0 MAR 2002 JUN 2002 SEP 2002 DEC 2002 MAR 2003 JUN 2003 SEP 2003 DEC 2003 MAR 2004 JUN 2004 SEP 2004 DEC 2004 MAR 2005 JUN 2005 SEP 2005 DEC 2005 MAR 2006 JUN 2006 SEP 2006 DEC 2006 MAR 2007 JUN 2007 QUARTER ENDED 20 WWW.TOURISMNEWZEALAND.COM M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / C A MPA I GN CAMPAIGN EFFECTIVENESS MEASURE Report annually on the effectiveness of the 100% Pure New Zealand global campaign in delivering on its goals/objectives. This involves qualitative and quantitative consumer research in four key markets to test the effectiveness of marketing outputs. R E S U LT S TAT U S Using the new research methodology for the Campaign Tracking and Development project, measures of Achieved awareness, preference, intention and conversion were collected to test the effectiveness of the campaign in delivering on its goals/objectives for Australia, UK, USA, Germany, USA, South Korea and China. The results for the four key markets are reported earlier in this document. CAMPAIGN REACH, FREQUENCY AND IMPACT Report bi-annually (by 31 December 2006 and 30 June 2007) on the reach and frequency achieved through brand advertising in Australia, the USA, UK and Japan. TA BL E 1 C ON SUMER BR A ND CA MPA IGN, R E A CH A ND F R EQUENCY BY K E Y M A R K E T COUNTRY MEDIA POTENTIAL AUDIENCE J U LY – D E C 2 0 0 6 JAN–JUNE 2007 REACH% FREQ. REACH% FREQ. Australia3 Total Television Sydney 318,625 84.3% 7.8 91% 14.3 Melbourne 217,400 85.9% 7.9 94% 13.3 Brisbane 148,625 90.7% 8.0 94% 14.1 Pay Television National 722,550 45% 3+ 48% 2.46 Magazines Syd, Mel, Bri 1,072,000 50.6% 3.16 42.7% 2.48 Newspapers Sydney 318,625 72.9% 6.63 39.8% 2.70 Melbourne 217,400 84.9% 7.22 32.0% 2.65 Brisbane 148,625 67.4% 3.41 58.6% 3.62 Adelaide 100,925 n/a n/a 72.9% 3.33 4 USA Print Local 26,000,000 55% 2.8 52% 2.4 Local TV Los Angeles 3,639,500 44% 3.7 38% 3.2 San Francisco 1,624,900 44% 3.3 39% 2.9 Japan5 Newspaper Tokyo 830,496 50.0% 2.0 48.7% 1.0 National 2,372,847 23.0% 1.0 n/a n/a Magazine National 2,372,847 25.9% 1.7 4.6% 1.1 3 Australia Print Target Audience: Interactive Travellers (Sydney, Melbourne, Brisbane); TV Target Audience: AB16-39 (Syd, Melb, Bris). Travel & Leisure and Life Etc not included in print run – not audited; Pay TV audience: Total AB. Source: MindShare Sydney. 4 USA Local TV Target Audience: Adults 25-49 (Nielsen/Scarborough/IMS). USA Print Target Audience: Interactive Traveller: Adults 25-49, HHI $60K, Any Foreign Trip in the last 3 years (Source: 2006 Simmons Doublebase). For print: Food & Wine used as a prototype for Marin, New York Magazine used as a prototype for Los Angeles Magazine, SF Chronicle used as a prototype for OC Register, National Geographic used as a prototype for National Geographic Traveller, Outside used as a prototype for Outside’s GO. 5 Japan Print Target Audience: JIT F1 (female aged 20-34), JIT M3 (male aged 50-69) and JIT F3 (female aged 50-69) deﬁnitions as classiﬁed in 3D 2005. Source: 3D 2005 Wave 1-3 TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 21 M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / C A MPA I GN TA BL E 1 C ONSUMER BR A ND CA MPA IGN, R E ACH A ND F R EQUENCY BY K E Y M A R K E T ( C ON T INUED ) COUNTRY MEDIA POTENTIAL AUDIENCE J U LY – D E C 2 0 0 6 JAN–JUNE 2007 REACH% FREQ. REACH% FREQ. UK6 Local TV National 23,504,000 74.6% 3.4 n/a n/a Print National 1,700,000 49.36% 2.36 45.44% 2.12 Magazine 1,700,000 22.55% 1.69 33.96% 2.95 6 UK print target audience is Interactive Travellers (GB TGI 2006 Q2). TV Trading Audience: ABC1 Adults. Reach and Frequency measured versus ABC1 Adults. TA BL E 2 C ON SUMER BR A ND CA MPA IGN, IMPA C T BY K E Y M A R K E T COUNTRY I M P A C T 7 J U LY – D E C 2 0 0 6 Australia Free to Air TV Emphasis on building awareness of New Zealand and generating a sense of urgency around travel. Use the 60-second advertisement to deliver the information and then 30-second and 15-second to build frequency of message in following weeks. Pay TV Support Free to Air TV with 30-second and 15-second advertisements. Build awareness of New Zealand with relevant environments and channels. Press Varying sizes to create impact at launch, designed to deliver awareness of New Zealand in relevant sections. Magazine Focus on full-page creative to deliver information on New Zealand within relevant environments. USA TV Use of 60-second spots during CBS Early Show to maximise Tourism New Zealand presence where segment focused on New Zealand. Use of 30-second spots with an emphasis on primetime on networks: Bravo, E!, Food, FX, HGTV, TBS, Discovery, History, TNT, Travel, USA, Comedy, Central, Oxygen, TLC. Print Focus on high-impact units such as four-page inserts. Emphasis on upfront positioning. Japan Newspaper 1/2 DPS size for the 2nd launch in early January. Magazine Focus on DPS, emphasis on early positioning. Online High trafﬁc levels directly from banners to newzealand.com. UK/Europe TV Use of the 30-second television commercial across Channel 4, Five and a selection of MCH channels. This highly-targeted approach to programming was adopted to appeal to Interactive Travellers in their favourite programming. As a result, the audience numbers targeted in both the ABC1Adults (buying audience) and Interactive Traveller (target audience) groups were comfortably beaten without the television ratings plan being exceeded. Magazine DPS executions in core monthly titles. Single pages in National press supplements. FH half or relevant positioning achieved in all. 7 The measures that give emphasis to deliver impact are: large sizes / durations; premium positioning; innovation; ownership. 22 WWW.TOURISMNEWZEALAND.COM M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / C A MPA I GN PUBLIC RELATIONS AND INTERNATIONAL MEDIA PROGRAMME MEASURE Size of circulation/audience reached through articles and items broadcast by media representatives hosted by Tourism New Zealand. R E S U LT S TAT U S A total circulation/audience of 614,494,346 was reached during the year (comprising a print circulation of Achieved 94,223,802, broadcast audience of 497,664,408 and online audience of 22,606,136). MEASURE Number of international media visits hosted in New Zealand and highlights. R E S U LT S TAT U S A total of 761 media were hosted during the year (which included a 160-person Castaway crew). A report Achieved was provided quarterly on the number of international media visits hosted in New Zealand and highlights. SHARE OF VOICE MEASURE Report annually on Tourism New Zealand’s share of voice in four key markets, expressed as a trend since 1999. R E S U LT S TAT U S Tourism New Zealand’s share of voice 2006 (Based on Competitive Ranking Charts 2006 by Mindshare Achieved – see chart below) were: Australia 14% UK 8% USA 1% Japan 8% NEW ZEALAND’S SHARE OF VOICE IN KEY MARKETS (1999–2006) Share of voice is Tourism New Zealand’s share of the overall tourism/travel advertising spend in a market. 16.00% 14.00% AUSTRALIA 12.00% 10.00% JAPAN 8.00% UK 6.00% 4.00% 2.00% USA 0.00% 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2006 Source: Mitchell Media Data: 1999–2005 Mindshare Data: 2006 TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 23 M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / C A MPA I GN EVENTS MEASURE Events used to leverage the brand campaign. R E S U LT S TAT U S Tourism New Zealand supported 10 events during the year: Achieved 1. The World Mountain Bike Champs, Rotorua, New Zealand 2. Montana World of WearableArt Awards, Wellington, New Zealand 3. Shanghai Inaugural Air New Zealand Flight, China 4. Rally New Zealand, Hamilton, New Zealand 5. Ellerslie International Flower Show, Auckland, New Zealand 6. New Zealand Golf Open, Auckland, New Zealand 7. Pinot Noir Conference 2007, Auckland, New Zealand 8. Mauri Ora Exhibition, Tokyo, Japan 9. America’s Cup, Valencia, Spain 10. The Good Food and Wine Shows, Melbourne and Sydney, Australia. Tourism New Zealand also introduced the Spring Festival programme (featuring 11 established events taking place in New Zealand over the spring period) as part of the ‘What’s On’ campaign launched in Australia in September 2006. A full evaluation report was provided on two major events: the Australian Food and Wine Shows in Sydney and Melbourne, Australia and the America’s Cup in Valencia, Spain. PILOT RESEARCH PROGRAMME – INTERACTIVE TRAVELLER STRATEGY MEASURE Implement a pilot research programme in partnership with the Ministry of Tourism on the Interactive Traveller® strategy for 2006/07. R E S U LT S TAT U S The project was completed by 30 June 2007. A report was provided to the Minister by the Ministry of Tourism, Achieved as lead agency for the project, in July 2007. The total cost of delivering outputs under the Campaign category is $39.891 million. 24 WWW.TOURISMNEWZEALAND.COM In the last year Tou MARKETING New Zealand’s tra programme resulted in over 23,000 trave rism ining OF NEW ZEALAND being trained on w New Zealand has to l trade hat offer. AS A VISITOR DESTINATION: CHANNEL The channel component of Tourism This includes building partnerships These activities are complemented New Zealand’s strategy is directed with the travel trade on and offshore to by online marketing – using Tourism towards converting intention to travel improve the conversion from interest to New Zealand’s consumer website, to New Zealand into actual arrivals actual travel to New Zealand. Tourism www.newzealand.com, as a tool for – using both internet technology and New Zealand’s consumer and trade providing information about New Zealand the travel distribution system to assist marketing activities also provide a local and systems to facilitate planning and in the conversion process. presence in key overseas markets that reservations for travel to our country. reinforce the messages in the 100% Pure New Zealand campaign. PROPORTION OF THE INTERACTIVE TRAVELLER AMONGST HOLIDAY ARRIVALS MEASURE Increase the proportion of the Interactive Traveller ® on holiday amongst all holiday arrivals from 59 percent to 61 percent by 30 June 2007. The latest available Interactive Traveller percentages (year to date) will be reported quarterly in the form of a trend chart. R E S U LT S TAT U S Quarterly trend charts were provided. The proportion of Interactive Travellers among all holiday arrivals was Achieved 59.1% in 2005. This increased to 63.5% in 2006 and 64.2% in 2007. (All ﬁgures YE March). HOLIDAY ARRIVALS MEASURE Reverse the downward trend in all holiday arrivals forecast for the year ended June 2006. Target for holiday arrivals is 1,209,300 by 30 June 2007. R E S U LT S TAT U S 1,213,288 Achieved TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 25 M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / CH A NNEL INTERNET MEASURE Increase the average number of unique users of the www.newzealand.com tourism home page per month. Trend data to be provided on a quarterly basis. R E S U LT S TAT U S The average number of unique users of the www.newzealand.com tourism home page per month was 337,258. Achieved Trafﬁc to the www.newzealand.com website continues to grow at an average of 19 percent per year. The most signiﬁcant additional trafﬁc in 2006/07 originated from Japan and Australia, which was directly related to advertising activity taking place in these markets during the year. T A B L E 2 : T R E N D C H A R T – C O N S U M E R W E B S I T E U N I Q U E U S E R S Q U A R T E R LY A V E R A G E S 2 0 0 1- 2 0 0 7 450,000 WWW.NEWZEALAND.COM UNIQUE USERS 2001/02–2006/07 400,000 350,000 2006/07 300,000 UNIQUE USERS 2005/06 250,000 2004/05 200,000 2003/04 150,000 2002/03 100,000 2001/02 50,000 0 1ST QTR AVERAGE 2ND QTR AVERAGE 3RD QTR AVERAGE 4TH QTR AVERAGE FINANCIAL YEARS BY QUARTER MEASURE Increase the satisfaction levels for www.newzealand.com by visitors to New Zealand by 30 June 2007. Data from Visitor Satisfaction Research to be reported annually. R E S U LT S TAT U S Satisfaction with www.newzealand.com is rated on a ten-point scale – ten being extremely satisﬁed. Achieved Satisfaction with www.newzealand.com was 7.8 average (all visitors) and 7.9 average (Interactive Travellers). This information is now collected as part of the Visitor Satisfaction Research, whereas last year the result was taken from the nz.com Popup Survey. Although this means it is not possible to directly compare results over years, last year 52 percent of users rated the usefulness of the website as ‘very good’. This suggests satisfaction levels are trending in a positive direction. 26 WWW.TOURISMNEWZEALAND.COM M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / CH A NNEL TRADE MARKETING STRATEGY MEASURE Report on the effectiveness of the Trade Marketing Strategy. R E S U LT S TAT U S Quarterly reports were provided on the global implementation of the Trade Marketing Strategy. Achieved The Strategy implementation progressed well during the year. Thirteen key trade partners in the UK underwent extensive product audits to enable them to sell more products that align with Tourism New Zealand’s target market. Detailed product workshops were also undertaken with key trade partners in China and Korea. With changes in the distribution channel largely driven by consumer use of the internet, new trade partners are being developed. Resources to support the Strategy are moving online and development work within www. traveltrade.newzealand.com continues. The project is being managed in conjunction with the nine International Marketing Alliances (Regional Tourism Organisation groupings) in New Zealand. TRADE TRAINING MEASURE Provide a quarterly report on the actual number of international travel sellers and product planners engaged with through trade training seminars and conferences, roadshows, online training modules and familiarisation visits. R E S U LT S TAT U S Quarterly reports were provided on the number of international travel sellers and product planners Tourism Achieved New Zealand engaged with during the year through its trade training programme. The training programme resulted in 23,947 travel sellers, product planners and product managers being trained during the year both in person and online. Seminars attracted over 11,000 participants in total. They included the Kiwilink events, South East Asia Frontliner training and an International Marketing Alliance workshop in the UK. TRENZ 2007 attracted 338 product buyers. Around 1,000 people from the travel trade participated in trade familiarisations (famils). This programme was strategically repositioned, with the emphasis moving away from ‘Frontliner’ famils (those having face-to-face contact with customers) to more targeted famils involving product development managers. While this resulted in fewer famils and participants than was anticipated, it meant greater focus on those people who can most make a difference to the type of New Zealand tourism product being sold offshore. Close to 12,000 online trade training modules were successfully completed during the year with a number of enhancements to the training modules made. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 27 M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / CH A NNEL MEASURE Provide a quarterly summary of the evaluations made by international travel sellers and product planners engaged in TNZ’s trade training activities. Very satisﬁed and extremely satisﬁed levels to remain above 90%. R E S U LT S TAT U S The overall average satisfaction rating for Tourism New Zealand’s trade training activity (including trade famils, trade Not Achieved training held in-market, and online trade training modules) for the year was 86 percent. The overall average satisfaction rating was slightly below target, reﬂecting a change in criteria to the performance measure from the previous year (where a much lower satisfaction target of 75 percent was set, and a broader range of satisfaction ratings, to include ‘good’, ‘very good’ and ‘excellent’ responses, were provided for). The 2006/07 measure permitted a narrower range of responses: ‘very good’ and ‘excellent’. If a rating of ‘good’ had continued to be included, an overall satisfaction rating of 95.6 percent would have been achieved. TOURISM WEBSITES MEASURE Further development of the Japanese and Korean language tourism websites and translation of www.newzealand.com into simpliﬁed Chinese. R E S U LT S TAT U S Development work on the Japanese and Korean websites was completed during the year and they have been continually Substantially updated to support local marketing activity. All changes to the English site are carried through to these websites. Achieved Progress was delayed on translating www.newzealand.com into simpliﬁed Chinese while conﬁrmation of long-term government funding for the China market over the next ﬁve years was awaited. With funding conﬁrmed towards the end of the ﬁnancial year, work commenced on updating the website, which will carry over into 2007/08. CHINA TRADE TRAINING MEASURE Continuation of China Trade Training initiative, reporting quarterly on the following: a) actual number of agencies that receive training under this scheme and b) actual number of individual agents trained. R E S U LT S TAT U S Quarterly reports were provided during the year on the actual number of agencies that received training under Achieved the scheme and the actual number of individual agents trained. Throughout the year, training took place in Shanghai, Beijing, Guangzhou, Wenzhou and Hangzhou, with a total of 923 agents from 198 agencies receiving training. In addition, 10 China Kiwi Specialist familiarisation trips came to New Zealand between December 2005 and November 2006. MEASURE Fifty New Zealand expert agents are certiﬁed and 10 training events are held by 1 December 2006. R E S U LT S TAT U S The China three year trade training project, conducted in conjunction with the New Zealand Immigration Achieved Service, certiﬁed 137 agents as New Zealand expert agents and held 10 training events for ADS-licensed companies over the period 1 December 2005 to 30 November 2006. Since the conclusion of the project, Tourism New Zealand’s China Ofﬁce has continued to provide trade training on an ongoing basis. The total cost of delivering outputs under the Channel category is $15.653 million. 28 WWW.TOURISMNEWZEALAND.COM nd MARKETING “Tourism New Zeala d ons an Seminars, presentati 500 events attracted ov er 3, tives in the OF NEW ZEALAND industry representa last year.” AS A VISITOR DESTINATION: CAPABILITY New Zealand will always be a niche mouth promotion of New Zealand player in world tourism given our as a destination remain high. geographic distance from most main Key activities within this output are markets and the comparatively high market research, communication with cost to travel here. For this reason, stakeholders, providing support for the Tourism New Zealand’s goal behind Qualmark quality assurance scheme and the capability strategy is to focus on visitor information services provided by ensuring New Zealand provides a quality the Visitor Information Network (trading experience for visitors. This ensures as i-SITE New Zealand). visitor satisfaction levels and word-of- NEW ZEALAND AS A HOLIDAY DESTINATION MEASURE At least 90 percent of Interactive Travellers are very likely to recommend New Zealand as a holiday destination to others by 30 June 2007. R E S U LT S TAT U S The end of year result was slightly below expectation at 87%. However, when ‘very likely’ responses Not Achieved are taken together with ‘quite likely’ responses, an overall rating of 98% was achieved. CONSUMER RESEARCH MEASURE Visitor Satisfaction Research 2006 project completed by 30 June 2007. R E S U LT S TAT U S The Nielsen Company completed its report presentation on the Visitor Satisfaction Research project by Achieved 30 June 2007. Tourism New Zealand are currently in the process of analysing the report and developing a communication plan for dissemination of results to the tourism Industry and other key stakeholders. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 29 M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / C A PA BIL I T Y MEASURE Visitor Satisfaction Research 2006 industry communication plan developed by 30 June 2007. R E S U LT S TAT U S Development of this communication plan was initiated during the year with initial communication of results Not Achieved provided to the Ministry of Tourism and other key stakeholders. As the Visitor Satisfaction Research 2006 (deferred) Report was not completed until the end of June 2007, ﬁnalisation of the plan has been deferred to 2007/08 to enable relevant messages and key communication opportunities to ﬁrst be fully identiﬁed from the report. MEASURE Report on the 2005 Visitor Satisfaction Research – dissemination of results to the industry. R E S U LT S TAT U S Results from the 2005 Visitor Satisfaction Research were disseminated throughout the year to the industry Achieved via speeches and key presentations. CORPORATE COMMUNICATIONS MEASURE Report quarterly on the number of user sessions for www.tourismnewzealand.com R E S U LT S TAT U S Quarterly reports were provided during the year on user sessions for www.tourismnewzealand.com. The website Achieved attracted a total of 272,533 user sessions during the year – a level of overall visitation similar to 2005/06 (where a result of 281,491 user sessions was achieved). MEASURE Report quarterly on the number of stakeholder publications (Tourism News, Regional Rap) and face-to-face engagements with the industry undertaken by Tourism New Zealand. R E S U LT S TAT U S Quarterly reports were provided during the year on the number of stakeholder publications and face-to-face Achieved engagements with the industry undertaken by Tourism New Zealand. Stakeholder publications: Tourism News: six editions of this bi-monthly publication were produced, with each issue attracting in excess of 6,400 subscribers throughout New Zealand and key markets. Seven editions of Regional Rap were produced during the year, including a special Rugby World Cup edition in December 2006. Each edition was distributed electronically to over 1,500 subscribers world-wide, the e-newsletter providing industry participants with regular news and events from Tourism New Zealand’s key markets. Face-to-face engagements: industry seminars, presentations and other industry events took place around New Zealand during the year, attracting over 3,500 industry representatives. 30 WWW.TOURISMNEWZEALAND.COM M A R K E T IN G O F NE W Z E A L A ND A S A V I SI T O R D E S T IN AT I O N / C A PA BIL I T Y SUBSIDIARY COMMITMENTS MEASURE Increase the number of Qualmark license holders by 200 from 1,700 to 1,900 by 30 June 2007. R E S U LT S TAT U S There were 1,988 Qualmark license holders as at 30 June 2007. Achieved MEASURE Maintain the attrition rate of Qualmark license holders below 5% as at 30 June 2007. R E S U LT S TAT U S The attrition rate for the year was 6.3%. A larger than anticipated number of businesses either stopped Not Achieved trading as tourism businesses during the year, or were withdrawn for not meeting annual payment terms. PERFORMANCE MEASUREMENT FRAMEWORK MEASURE Complete a comprehensive review of performance measures in 2006/07, in partnership with the Ministry, to establish an improved performance framework that aligns organisational objectives with government outcomes. R E S U LT S TAT U S Ongoing discussions with the Ministry of Tourism were held during the year to establish an improved Partially performance measurement framework with two key objectives: Achieved 1) to assess the relevance and quality of performance measures already in place and develop new ones where necessary, 2) to develop a plan to enable Tourism New Zealand’s activities and outcomes to be evaluated over time. Performance measures were developed in consultation with the Ministry for inclusion in the 2007/08 Output Agreement. These built incrementally on the improved performance measures developed following the 2005 Tourism New Zealand Baseline Review. The development of more outcome-focused measures, envisaged as part of the review, has been deferred to 2007/08 when the New Zealand Tourism Strategy 2015 is ﬁnalised. The ﬁrst major evaluation (into the effectiveness of the Interactive Traveller Strategy in delivering yield outcomes) which forms the ﬁrst part of the proposed overall plan for evaluation activity was completed in partnership with the Ministry by 30 June 2007. The total cost of delivering outputs under the Capability category is $14.210 million. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 31 IMPLEMENTATION OF THE NEW ZEALAND TOURISM STRATEGY As one of a number of organisations that receive funding Speciﬁc initiatives include: through the Government’s New Zealand Tourism Strategy • continuing to build on the Visitor Information Network’s Implementation Fund, Tourism New Zealand’s activities within consumer and stakeholder research programme, to enable this Output Class focus on implementing initiatives to help it to remain at the forefront of providing quality visitor implement the Strategy. information • developing and implementing best-practice resources and systems for i-SITE Visitor Centres • developing a Qualmark New Zealand environmental accreditation scheme for tourism operators. VISITOR INFORMATION NETWORK MEASURE Complete and report on the VIN Consumer Research by 30 June 2007, including reporting on how it achieved its objectives. A copy of the research will be provided to the Ministry following its completion. R E S U LT S TAT U S Research completed, with a copy of the research report provided to the Ministry. The VIN Consumer Research Achieved 2007 research concluded the set of ﬁve annual research reports into user behaviour and satisfaction with i-SITEs and the identiﬁcation of opportunities for growing i-SITE use. A copy of the report was provided to the Ministry and i-SITE Board, while a summary of the report was also published on the i-SITE Extranet. 32 WWW.TOURISMNEWZEALAND.COM is vital to ensure visitors’ The provision of quality information to visitors d. The i-site network now satisfaction with their holiday in New Zealan 0 people a year. assists 60% of all holiday makers – over 950,00 MEASURE Provide a quarterly report on the implementation of projects associated with the VIN best practice facilitation project, including how they achieved their stated objectives. R E S U LT S TAT U S Quarterly reports were provided on progress with project implementation. During the year, a total of 35 i-SITE Reporting: managers undertook a range of courses through the New Zealand Institute of Management and New Zealand Achieved Trade and Enterprise, covering subjects such as Human Resources, Retail, Merchandising, Quality Management, Technology and Customer Service. Objective Reporting: Feedback indicated the courses had beneﬁted managers in managing their staff and business, while Not Achieved merchandising training had impacted on increasing revenue. The anticipated completion date for this multi-year project was 30 June 2007. However, the roll-out of training was delayed due to issues in the recruitment of coordinators, compounded by the impact of the seasonal nature of the industry (giving a limited training window each year). The planned programme of workshops is now expected to be completed by the end of 2007. QUALMARK ENVIRONMENTAL ACCREDITATION PROGRAMME MEASURE Provide a quarterly report on the project associated with Qualmark’s environmental accreditation programme investigation and development. R E S U LT S TAT U S Quarterly reports were provided on project progress. Consumer research was completed during the year, Achieved formal industry consultation was initiated and a detailed project plan was developed. The total cost of delivering outputs under this category is $0.194 million. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 33 MANAGEMENT STATEMENTS EQUAL EMPLOYMENT OPPORTUNITIES The following information about compliance with obligations to be a good employer, including our Equal Employment Opportunities Programme, is provided under Sections 118 and 151 (1)(g) of the Crown Entities Act 2004. Women are well represented at all levels in Tourism New Zealand. The organisation also recognises the need for the greater involvement of Mäori within the organisation, and continues to promote this through our Mäori Graduate Development Programme and our Mäori Development Programme. TOURISM NEW ZEAL AND WORKPLACE PROFILE 30 JUNE 2007 DIRECT REPORTS TO EXECUTIVE OTHER MANAGERS OR MANAGERS PROFESSIONAL EXECUTIVE P ER CEN TA GE O F GR OUP S TA F F W I T H W I T H S TA F F AND SUPPORT MANAGEMENT RESPONSIBILIT Y RESPONSIBILIT Y S TA F F FOR SPECIFIC (3RD TIER) OUTPUTS NZ European Male 37.5% 36.4% 13.3% 6.6% Female 50.0% 45.5% 26.7% 51.3% Mäori Male 2.6% Female 9.1% 2.6% Paciﬁc Peoples Male Female 1.3% Asian (inc South Asian) Male 20.0% 3.9% Female 4.5% 33.3% 26.3% Other Male 12.5% 6.7% 1.3% Female 4.5% 3.9% Percentage of Group of Total Org 6.6% 18.2% 12.4% 63.0% 34 WWW.TOURISMNEWZEALAND.COM LEADERSHIP, ACCOUNTABILITY AND CULTURE Tourism New Zealand, and in particular its Executive, is committed to managing and leading all staff fairly and properly in all aspects of their employment. This means a commitment to, and activity in, the following areas: RECRUITMENT, SELECTION AND INDUCTION Our recruitment and selection procedures ensure that prospective employees are given the opportunity to participate equally in the recruitment process. Interview questions and processes have been reviewed over the last 12 months to ensure that the selected applicant’s skills and abilities are the best ﬁt with the position and organisation. This includes appropriate support during the recruitment process for Mäori and Paciﬁc peoples and people with English as a second language. In the second half of the year ending 30 June 2007, we introduced a new welcome and induction programme. This programme runs quarterly and is led by our Executive team. It includes a cultural component which explores the signiﬁcance of aspects of tikanga Mäori for our organisation, and includes mihi and waiata training. Tourism New Zealand has continued with an active Mäori Graduate Recruitment programme, which speciﬁcally targets young Mäori graduates with a desire to develop their careers within the tourism industry. The aim of this programme is to increase the involvement of Mäori in our organisation, and to provide work and learning opportunities and experiences to enable young Mäori to effectively contribute to other organisations within the tourism sector. EMPLOYEE DEVELOPMENT, PROMOTION AND EXIT Tourism New Zealand has an active management and leadership programme, including an annual development programme for those identiﬁed with potential for leadership and management development. Other training and development needs are identiﬁed on an individual basis and are agreed between the manager and employee. Te Wiki o Te Reo Mäori and Matariki are also actively supported by Tourism New Zealand with a planned programme to provide additional skills training and learning opportunities. Tourism New Zealand also has a programme to develop and grow our organisational capability in tikanga Mäori. This programme provides an opportunity for all staff, including those in our international ofﬁces, to learn more about tikanga Mäori, Te Reo, and the implementation of our Mäori Tourism strategy. FLEXIBILITY AND WORK DESIGN Tourism New Zealand has an active programme of supporting ﬂexible working arrangements and job design. In the last 12 months, in support of this, we have: • supported parents in their return to work by offering part-time and gradual return to full-time arrangements and ﬂexi-time to accommodate child care needs, • supported expectant parents by granting additional paid time away from work to attend appointments associated with the pregnancy, • supported staff with responsibilities for child and eldercare by offering ﬂexible working arrangements. REMUNERATION, RECOGNITION AND CONDITIONS The annual salary review and internal promotions are based on individual skills and experience, and recognise performance regardless of ethnicity, gender or physical ability. Individuals identiﬁed as not meeting the requirements of their role are provided with support, training and development where required to assist them to achieve success in their role. HARASSMENT AND BULLYING PREVENTION Tourism New Zealand has a strictly adhered-to policy and procedure for dealing with workplace harassment and bullying. In the last 12 months, there have been no reported allegations relating to harassment and/or bullying. SAFE AND HEALTHY ENVIRONMENT Tourism New Zealand has a good and safe working environment, and we have published and well-understood policies with regard to this, which have actively encouraged staff involvement. Additional support for people, particularly those with disabilities, has over the last 12 months included specialist work place assessments and the provision of special equipment to ensure that employees are able to contribute effectively in all aspects of their working life. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 35 IMPACT OF TOURISM NEW ZEALAND OUTPUTS ON INTERNATIONAL VISITOR ARRIVALS AND EXPENDITURE Visitor arrivals and expenditure are dependent on many variables including the marketing activities of competing destinations, changes in consumer behaviour and expectations affecting travel and expenditure decisions, private sector spend and pricing strategies employed, seat capacity on air routes, exchange rates and the general economic conditions in countries of origin as well as the efforts of other National Tourism Ofﬁces. Whilst the range and nature of these variables mean that it is not possible to determine the degree to which the activities undertaken by Tourism New Zealand impact directly on visitor arrivals and expenditure, the outputs delivered during the year by Tourism New Zealand will have impacted through: • raising the proﬁle of New Zealand as a visitor destination • providing potential visitors with reasons and motivations to travel to New Zealand • assisting the industry to more effectively convert visitor interest into actual travel • assisting the industry to better target its activities through providing market insights into the needs and motivations of international visitors • contributing to the enhancement of the quality, delivery, distribution, promotion, depth and competitiveness of New Zealand tourism product. International visitor arrivals for the year ending 30 June 2007 were 2.46 million, a 3.4 percent increase over the previous year. International visitor expenditure (from the International Visitor Survey, excluding airfare receipts) for the year ended 31 March 2007 was $6.3 billion, an increase of 0.2% ($16 million) on the previous year. The dawn ceremony opening of the ‘Mauri Ora’ art exhibition in Tokyo was attended by media with a combined circulation of over seven million people. 36 WWW.TOURISMNEWZEALAND.COM ? FINANCIALS S TAT EMEN T O F R E SP ON SIBIL I T Y We acknowledge responsibility for the preparation of these ﬁnancial statements and for the judgements used in them. Internal control procedures are considered to be sufﬁcient to provide a reasonable assurance as to the integrity and reliability of ﬁnancial reporting. In our opinion these ﬁnancial statements fairly reﬂect the ﬁnancial position, cash ﬂows and operations of the New Zealand Tourism Board Group for the year ended 30 June 2007. WALLY STONE SUSIE JOHNSTONE Chairman Deputy Chair 30 October 2007 30 October 2007 TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 37 GUIDE TO THE MAIN FUNCTIONS OF TOURISM NEW ZEALAND The New Zealand Tourism Board, trading as Tourism New Zealand, Public Relations-International Media: Targeting quality international is a Crown Entity established on 1 November 1991 under the media to produce motivating, accurate and inspirational coverage of provisions of the New Zealand Tourism Board Act 1991. Its New Zealand as a quality tourist destination. functions under the Act are to: Product Marketing: Working with the industry to develop and – develop, implement and promote strategies for tourism, and enhance products and services to meet identiﬁed consumer need. – advise the Government and the New Zealand tourism industry Marketing Research: The provision of high quality marketing on matters relating to the development, implementation and research and intelligence that will be used to inform the promotion of those strategies. organisation’s marketing strategy. In the year ended 30 June 2007, Tourism New Zealand delivered Trade Training & Facilitation: The provision of training to trade the majority of its services in the one output class of Marketing which promote and sell New Zealand within their markets and the of New Zealand as a Visitor Destination. In addition, Tourism facilitation of trade and consumer travel shows. New Zealand received $135,000 for implementation of the Tourism Stakeholder Communications: Communicate with the tourism Strategy under a separate output class. The Marketing activities industry and key stakeholders to promote a broader understanding undertaken within output class Marketing of New Zealand as a of tourism development and associated issues Visitor Destination were: Tourism Development: The provision of strategic support and advice Marketing Communications: The delivery of the global campaign for Tourism New Zealand’s subsidiary commitments, policy and and consumer collateral in off-shore markets. planning functions and Mäori cultural strategy. Internet: The development and maintenance of a well structured The direct spend for each of these activities is provided in Note 3 (consumer deﬁned) site that enhances decision-making by providing to the Financial Statements. strong motivational content coupled with simple navigation and holiday planning capability. Events: The delivery of support at selected high proﬁle events to establish awareness and interest in New Zealand as a tourist destination. 38 WWW.TOURISMNEWZEALAND.COM STATEMENT OF ACCOUNTING POLICIES FOR THE YEAR ENDED 30 JUNE 2007 REPORTING ENTIT Y (v) Receivables The ﬁnancial statements are for the reporting entity the Receivables are stated at their estimated realisable value after New Zealand Tourism Board trading as Tourism New Zealand (the providing for doubtful debts. Bad debts are written off during the Parent) and its subsidiaries (the Group). Tourism New Zealand was year in which they are identiﬁed. established under the New Zealand Tourism Board Act 1991. The (vi) Property, plant and equipment ﬁnancial statements have been prepared in accordance with the All items of property, plant and equipment are recorded at cost requirements of the Crown Entities Act 2004 and depreciated as outlined below. MEASUREMENT BASE Depreciation of property, plant and equipment is calculated on a The ﬁnancial statements have been prepared on the basis of straight-line basis to allocate the cost of an asset over its estimated historical cost except for certain items for which speciﬁc accounting useful life. The estimated useful lives of property, plant and policies are identiﬁed. equipment are: ACCOUNTING POLICIES Ofﬁce equipment 5 years The following speciﬁc accounting policies which materially affect Motor vehicles 4–5 years the measurement of ﬁnancial performance and ﬁnancial position Furniture and ﬁttings 5–8 years have been applied. Computer equipment 3 years Leasehold improvements Term of the lease (i) Revenue recognition Grants received from the Crown are recognised in the Statement of When an item of property, plant and equipment is disposed Financial Performance as revenue on their receipt. Other revenue is of, the gain or loss is recognised in the Statement of Financial recognised when earned. Performance. (ii) Leases (vii) Foreign currencies Tourism New Zealand leases ofﬁce premises, ofﬁce equipment and Where transactions have been hedged by forward exchange motor vehicles. As the majority of risks and beneﬁts of ownership contracts, the forward rates speciﬁed in those contracts are used are retained by the lessor, these leases are classiﬁed as operating to convert the transactions into New Zealand currency. Otherwise, leases. Operating lease payments are recognised as an expense in transactions in foreign currencies are converted at the exchange the Statement of Financial Performance on a straight-line basis rate at the date of the transaction. over the lease term. Foreign currency receivables, payables, accommodation bonds and (iii) Goods and services tax (GST) cash balances at balance date are translated at exchange rates The Statement of Financial Performance and Statement of Cash current at balance date. Exchange gains and losses are brought to Flows have been prepared so that all components are stated account in determining the surplus or deﬁcit for the year. exclusive of GST. All items in the Statement of Financial Position (viii) Financial instruments are stated net of GST, with the exception of receivables and Tourism New Zealand uses foreign exchange instruments in order payables which include GST. to manage its exposure to ﬂuctuations in foreign currency exchange (iv) Income tax rates on normal operating activities. Tourism New Zealand does not Tourism New Zealand is exempt from income tax under the use ﬁnancial instruments for speculative purposes. New Zealand Tourism Board Act 1991. Tourism New Zealand’s Financial instruments in the Statement of Financial Position subsidiaries are subject to income tax. include cash and bank balances, receivables and trade payables. The income tax expense charged to the statement of ﬁnancial These instruments are generally carried at their estimated fair performance includes both the current year’s provision and the value. The particular recognition methods adopted are disclosed income tax effect of timing differences calculated using the liability in the individual policy statements associated with each item. method. Tax effect accounting is applied on a comprehensive Full disclosure of ﬁnancial instruments to which Tourism basis to all timing differences. A debit balance in the deferred tax New Zealand is a party is provided in note 20. account, arising from timing differences or income tax beneﬁts from income tax losses, is only recognised if there is virtual certainty (ix) Promotional activity of realisation. Promotional and advertising costs are expensed when the service is provided. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 39 STATEMENT OF ACCOUNTING POLICIES FOR THE YEAR ENDED 30 JUNE 2007 (x) Joint venture marketing (xv) Associate Companies Obligations under joint venture contracts are expensed when Associates are investees (but not subsidiaries) in which Tourism incurred. Tourism New Zealand derives no ﬁnancial beneﬁt as a New Zealand has the capacity to affect substantially, but not result of these joint venture activities and therefore no investment unilaterally determine, the operating and/or ﬁnancial policy is recognised. decisions. Associates have been reﬂected in the consolidated ﬁnancial statements on an equity accounting basis which (xi) Segment information recognises Tourism New Zealand’s share of retained surpluses Tourism New Zealand’s primary function is to market New Zealand in the consolidated statement of ﬁnancial performance and its as a tourism destination. To achieve this, Tourism New Zealand share of post acquisition increases or decreases in net assets in maintains ofﬁces in a number of overseas countries. However, the consolidated statement of ﬁnancial position. In the Parent’s all Tourism New Zealand’s activities are co-ordinated from ﬁnancial statements investments in associates are recognised at New Zealand. cost. (xii) Employee entitlements (xvi) Intangible Assets Provision is made in respect of Tourism New Zealand’s liability for Intangible assets, such as domain names, are recorded at cost at annual leave. Annual leave entitlements are calculated on an actual acquisition date. Where there is no active market for these assets, entitlement basis. or they are determined to hold no future economic beneﬁt, they (xiii) Commitments are written off in the year of acquisition. Commitments disclosed include those operating and capital (xvii) Comparatives commitments arising from non-cancellable contractual obligations. Some comparative ﬁgures may have been restated to ensure Commitments relating to employment contracts are not included. consistency with the current year’s presentation (xiv) Basis of Consolidation – Purchase Method (xviii) Changes in accounting policies Subsidiaries are entities in which Tourism New Zealand has the There have been no changes of accounting policies during the year. capacity to determine the ﬁnancing and operating policies and from All policies have been applied on a consistent basis. which it has an entitlement to signiﬁcant ownership beneﬁts. The consolidated ﬁnancial statements include Tourism New Zealand and its subsidiaries, which are accounted for using the purchase method. The effects of all signiﬁcant inter-company transactions between entities that have been consolidated are eliminated on consolidation. In the Parent’s ﬁnancial statements investments in subsidiaries are recognised at cost. 40 WWW.TOURISMNEWZEALAND.COM STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT 2007 2007 2006 2007 2007 2006 Notes Actual Budget Actual Actual Budget Actual $000s $000s $000s $000s $000s $000s Revenue Crown revenue 1 74,246 74,136 79,358 74,246 74,136 79,358 Interest 866 502 750 859 500 745 Other revenue 2 2,298 2,287 2,779 246 200 930 Total revenue 77,410 76,925 82,887 75,351 74,836 81,033 Expenditure Marketing expenses 3 56,285 55,427 64,043 55,795 55,718 63,658 Other expenses 4 20,026 21,806 18,796 18,415 19,460 17,427 Depreciation & Impairment 5 772 752 604 738 718 552 Total expenditure 6 77,083 77,985 83,443 74,948 75,896 81,637 Net operating surplus (deﬁcit) before taxation 327 (1,060) (556) 403 (1,060) (604) Income tax expense 15 0 0 0 0 0 0 Minority interests in proﬁts/(losses) of subsidiaries 7 18 0 40 0 0 0 Share of loss/(gain) of associate company 8 (5) 0 0 0 0 0 Net surplus (deﬁcit) for the year 314 (1,060) (596) 403 (1,060) (604) STATEMENT OF MOVEMENTS IN EQUITY FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT 2007 2007 2006 2007 2007 2006 Notes Actual Budget Actual Actual Budget Actual $000s $000s $000s $000s $000s $000s Equity at beginning of the year 4,349 3,186 4,905 4,306 3,202 4,910 Movement in minority interest 7 18 0 40 0 0 0 Net operating surplus (deﬁcit) 314 (1,060) (596) 403 (1,060) (604) Equity at end of the year 4,681 2,126 4,349 4,709 2,142 4,306 The notes and accounting policies on pages 39 to 40 and 44 to 54 form part of and are to be read in conjunction with these ﬁnancial statements TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 41 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2007 GROUP PARENT 2007 2007 2006 2007 2007 2006 Notes Actual Budget Actual Actual Budget Actual $000s $000s $000s $000s $000s $000s Current Assets Cash 9 3,435 2,204 6,265 3,272 2,179 6,086 Receivables 10 1,193 1,035 913 1,135 1,000 882 Prepayments & other current assets 2,726 511 299 2,719 500 275 7,354 3,750 7,477 7,126 3,679 7,243 Non-current Assets Property, plant and equipment 11 1,616 1,620 1,510 1,609 1,613 1,469 Investment in associate 8 10 5 5 0 0 0 Accommodation bonds 12 275 300 340 275 300 340 1,901 1,925 1,855 1,884 1,913 1,809 Total Assets 9,255 5,675 9,332 9,010 5,592 9,052 Current Liabilities Payables & accruals 4,126 3,064 4,576 3,900 3,000 4,389 Employee entitlements 370 370 380 347 350 357 Payments received in advance 78 115 27 54 100 0 4,574 3,549 4,983 4,301 3,450 4,746 Total Liabilities 4,574 3,549 4,983 4,301 3,450 4,746 Equity Shareholder’s equity 1,805 1,805 1,805 1,805 1,805 1,805 Retained earnings 2,765 321 2,451 2,904 337 2,501 Minority interests 7 111 0 93 0 0 0 4,681 2,126 4,349 4,709 2,142 4,306 Total Liabilities and Equity 9,255 5,675 9,332 9,010 5,592 9,052 For and on behalf of the Board of Directors, which authorised the issue of the ﬁnancial statements on 30 October 2007 WALLY STONE SUSIE JOHNSTONE Chairman Deputy Chair 30 October 2007 30 October 2007 The notes and accounting policies on pages 39 to 40 and 44 to 54 form part of and are to be read in conjunction with these ﬁnancial statements 42 WWW.TOURISMNEWZEALAND.COM STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT 2007 2007 2006 2007 2007 2006 Notes Actual Budget Actual Actual Budget Actual $000s $000s $000s $000s $000s $000s Cash ﬂows from operating activities Cash was provided from: Crown revenue 74,246 74,136 79,358 74,246 74,136 79,358 Interest received 870 502 738 863 500 733 Other revenue 2,028 2,244 1,827 6 150 9 Goods and services tax received 14 0 242 0 0 242 77,158 76,882 82,165 75,115 74,786 80,342 Cash was disbursed to: Payments to suppliers and employees 78,466 76,885 82,669 76,409 74,799 80,819 Goods and services tax paid 100 0 15 100 0 0 78,566 76,885 82,684 76,509 74,799 80,819 Net cash outﬂow from operating activities 13 (1,408) (3) (519) (1,394) (13) (477) Cash ﬂows from investing activities Cash was provided from: Sale of property, plant and equipment 9 0 4 9 0 4 Repayment of accommodation bonds 13 0 42 13 0 42 22 0 46 22 0 46 Cash was applied to: Purchase of property, plant and equipment 683 808 835 681 808 828 Payments for accommodation bonds 29 0 104 29 0 104 712 808 939 710 808 932 Net cash outﬂow from investing activities (690) (808) (893) (688) (808) (886) Net decrease in cash held (2,098) (811) (1,412) (2,082) (821) (1,363) Effects of exchange rate on foreign (732) 0 776 (732) 0 776 currency balances Opening cash brought forward 6,265 3,015 6,901 6,086 3,000 6,673 Cash at end of year 9 3,435 2,204 6,265 3,272 2,179 6,086 The notes and accounting policies on pages 39 to 40 and 44 to 54 form part of and are to be read in conjunction with these ﬁnancial statements TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 43 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT Note 1 Crown Revenue 2007 2006 2007 2006 $000s $000s $000s $000s Crown revenue 70,301 54,772 70,301 54,772 During the year, additional funding was provided by the Crown for the following: America’s Cup Challenge 5,000 11,250 5,000 11,250 Visitor Information Network (trading as i-SITE New Zealand) 135 152 135 152 Qualmark New Zealand Ltd 124 250 124 250 Additional Campaign Funding 0 10,000 0 10,000 USA Campaign 0 5,000 0 5,000 China Market Development 0 384 0 384 Total revenue received from the Crown 75,560 81,808 75,560 81,808 Less GST 1,314 2,450 1,314 2,450 Net revenue received from the Crown 74,246 79,358 74,246 79,358 Note 2 Other Revenue 2007 2006 2007 2006 $000s $000s $000s $000s Other revenue includes: Foreign currency gains 131 456 131 456 Gain on sale of property, plant and equipment 7 0 7 0 Note 3 Marketing Expenses of Parent 2007 2006 $000s $000s Direct spend on marketing activities comprise: Marketing Communications: Australia 6,185 4,546 North America 8,096 9,918 UK & Europe 5,696 7,676 Japan 3,371 5,334 Asia 1,121 595 New Zealand (a) 14,236 17,256 Total Consumer Advertising 38,705 45,325 44 WWW.TOURISMNEWZEALAND.COM NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT Note 3 Marketing Expenses of Parent (continued) Internet 2,858 3,325 Information Servicing 471 685 Events 1,881 2,274 Public Relations – International Media 4,775 5,193 Marketing Research 874 824 Trade Training & Facilitation 3,816 3,504 Stakeholder Communications 739 761 Product Marketing 107 289 Tourism Development 1,569 1,478 Total Direct Spend by Parent on Marketing Activities 55,795 63,658 (a) New Zealand Marketing Communications represents the cost of servicing the 100% Pure New Zealand Campaign that cannot be accurately allocated to markets. The America’s Cup Challenge is also included. For deﬁnitions of Marketing Activities see the Guide on page 38. Note 4 Other Expenses 2007 2006 2007 2006 $000s $000s $000s $000s Other expenses include: New Zealand Personnel Expenses – Tourism New Zealand 5,475 5,403 5,475 5,403 New Zealand Personnel Expenses – Subsidiaries 923 878 0 0 Offshore Personnel Expenses 5,284 4,693 5,284 4,693 Auditor’s remuneration: Auditing ﬁnancial statements 81 74 67 65 Other services 0 2 0 2 Total Auditor’s Remuneration 81 76 67 67 Lease expense 2,215 2,032 2,079 1,868 Loss on foreign currency cash balances 732 (776) 732 (776) Loss on foreign currency accommodation bonds 82 (50) 82 (50) Directors’ remuneration for Parent (See also note 22) 183 153 183 153 Loss on sale of property, plant and equipment 39 26 37 26 Compensation or other beneﬁts paid to ceased staff 79 155 54 155 Number of staff Number of staff Number of staff Number of staff Number of permanent and ﬁxed term staff 134 139 113 118 Number of ceased staff paid compensation or other beneﬁts 4 6 2 6 TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 45 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT Note 5 Depreciation and Impairment 2007 2006 2007 2006 $000s $000s $000s $000s Depreciation by asset class: Furniture and ﬁttings 85 80 81 76 Leasehold improvements 245 232 220 195 Ofﬁce equipment 92 84 92 84 Motor vehicles 16 27 16 27 Computer equipment 208 181 203 170 Total Depreciation 646 604 612 552 Impairment Losses 126 0 126 0 Total Depreciation and Impairment 772 604 738 552 Note 6 Total Expenditure of Parent 2007 2006 $000s $000s Total expenditure by geographic region: Australia 8,098 6,256 North America 10,859 12,176 UK & Europe 9,931 11,839 Japan 5,825 7,719 Asia 5,323 4,617 Other markets 120 152 New Zealand (a) 34,792 38,878 Total Expenditure of Parent 74,948 81,637 (a) New Zealand expenditure includes costs that cannot accurately allocated to markets including the America’s Cup Challenge, the cost of servicing the 100% Pure New Zealand Campaign, the International Media Programme and the newzealand.com website 2007 2006 $000s $000s Total expenditure by the three strategic categories outlined in the Statement of Service Performance: Campaign 39,891 44,311 Channel 15,653 15,980 Capability 14,404 11,346 69,948 71,637 America’s Cup Challenge which does not form part of the Statement of Service Performance 5,000 10,000 Total Expenditure of Parent 74,948 81,637 46 WWW.TOURISMNEWZEALAND.COM NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT Note 7 Subsidiary Companies Interest Held Interest Held 2007 2006 2007 2006 Qualmark New Zealand Limited 60% 60% 60% 60% Visitor Information Network Incorporated (trading as i-SITE NZ) 0% 0% 0% 0% The ﬁnancial year-end of both subsidiaries is 30 June. Tourism New Zealand has a 60 percent shareholding in Qualmark New Zealand Limited with the other 40% held by the New Zealand Automobile Association. Tourism New Zealand has control of Visitor Information Network Incorporated (VIN Inc), trading as i-SITE New Zealand, effective 21 August 2002. Qualmark New Zealand Limited is New Zealand tourism’s ofﬁcial quality agency. It is a government - private sector partnership between Tourism New Zealand and New Zealand Automobile Association. Qualmark licenses professional and trustworthy New Zealand tourism businesses to use the Qualmark® – tourism’s ofﬁcial quality mark – to help international and domestic travellers select places to stay, things to do and ways to get around. Qualmark’s core activities are based around determining the eligibility of businesses to enter the licensing system. This is achieved by way of assessment, promoting and working with Qualmark® licencees and working closely with other organisations and sectors within the tourism industry. By doing so, quality standards are raised and New Zealand tourism businesses improved based on best-practice. Tourism New Zealand and i-SITE New Zealand have a relationship agreement that recognises the importance of having an effective and high quality network of visitor information centres, dedicated to delivering free, comprehensive and objective information. The terms and conditions of the relationship agreement mean that Tourism New Zealand meets the criteria determined in FRS-37 for consolidating investments in subsidiaries. The i-SITE brand creates a distinctive look, which distinguishes the ofﬁcial network from other information centres. The i-SITE Visitor Centres provide on-the-ground information to ensure the visitor experience is as enjoyable as possible. Note 8 Associate Company Interest Held Interest Held 2007 2006 2007 2006 The New Zealand Way Limited 50% 50% 50% 50% The ﬁnancial year-end of The New Zealand Way Limited is 30 June. Tourism New Zealand has a 50% shareholding in The New Zealand Way Limited. This Company is the operating entity of a joint venture between Tourism New Zealand and New Zealand Trade & Enterprise. All contributions have been treated as marketing expenditure in accordance with accounting policy x. The New Zealand Way Brand provides marketing opportunities to those companies which meet quality and environmental standards. The Brand is promoted as a mark of outstanding quality, superior service and unique New Zealand characteristics. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 47 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT Note 9 Cash 2007 2006 2007 2006 $000s $000s $000s $000s Cash Holdings by Currency: New Zealand Dollar 574 994 411 815 United States Dollar 158 208 158 208 British Pound 1,238 774 1,238 774 Australian Dollar 685 258 685 258 European Euro 57 1,246 57 1,246 Japanese Yen 179 329 179 329 Hong Kong Dollar 46 378 46 378 Singapore Dollar 141 808 141 808 Taiwan Dollar 12 17 12 17 Canadian Dollar 88 121 88 121 Indian Rupee 171 688 171 688 Thai Baht 69 444 69 444 China Yuan Renminbi 17 0 17 0 3,435 6,265 3,272 6,086 Cash Holdings by Bank: HSBC Bank 2,793 5,057 2,766 5,003 National Bank of New Zealand 243 326 243 326 Bank of New Zealand 207 482 71 357 Deutsche Bank 39 72 39 72 Tokyo Mitsubishi 153 328 153 328 3,435 6,265 3,272 6,086 Note 10 Receivables 2007 2006 2007 2006 $000s $000s $000s $000s Receivables 1,200 916 1,138 885 Less: Provision for doubtful debts (7) (3) (3) (3) 1,193 913 1,135 882 Receivables for the Group include GST/VAT refunds comprising 57% (71% in 2006) of total receivables as follows: GST Refund due from NZ Inland Revenue Department 604 504 604 503 GST Refund due from Australian Taxation Ofﬁce 24 51 24 51 VAT Refund due from UK Customs & Excise 56 97 56 97 684 652 684 651 48 WWW.TOURISMNEWZEALAND.COM NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT Note 11 Property, Plant and Equipment 2007 2006 2007 2006 $000s $000s $000s $000s Furniture and Fittings At cost 876 787 838 740 Accumulated depreciation (369) (417) (336) (380) Net carrying amount of furniture and ﬁttings 507 370 502 360 Leasehold Improvements At cost 1,896 1,556 1,786 1,446 Accumulated depreciation (1,210) (966) (1,100) (881) Impairment (126) 0 (126) 0 Net carrying amount of leasehold improvements 560 590 560 565 Ofﬁce Equipment At cost 589 542 589 542 Accumulated depreciation (420) (351) (420) (351) Net carrying amount of ofﬁce equipment 169 191 169 191 Motor Vehicles At cost 115 115 115 115 Accumulated depreciation (83) (66) (83) (66) Net carrying amount of motor vehicles 32 49 32 49 Computer Equipment At cost 2,296 2,289 2,258 2,225 Accumulated depreciation (1,948) (1,979) (1,912) (1,921) Net carrying amount of computer equipment 348 310 346 304 Total Property, Plant and Equipment 1,616 1,510 1,609 1,469 Note 12 Accommodation Bonds Accommodation bonds are refundable deposits or key money paid for the lease of ofﬁce and housing premises. 2007 2006 2007 2006 $000s $000s $000s $000s UK & Europe 9 11 9 11 Japan 128 173 128 173 Asia 138 156 138 156 275 340 275 340 TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 49 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT Note 13 Reconciliation of Surplus (deﬁcit) with Cash Flow from Operating Activities 2007 2006 2007 2006 $000s $000s $000s $000s Net Operating Surplus (deﬁcit) 327 (556) 403 (604) Add/(Deduct) /Non-cash Items Depreciation & Impairment 772 604 738 552 Net Loss/(Gain) on foreign currency cash balances 732 (776) 732 (776) 1,504 (172) 1,470 (224) Add/(Deduct) Movements in Working Capital (Increase)/decrease in receivables (276) 241 (253) 251 (Increase)/decrease in prepayments & other current assets (2,430) 312 (2,444) 325 Increase/(decrease) in payables & accruals (452) (272) (489) (179) Increase/(decrease) in employee entitlements (9) 26 (10) 24 Increase/(decrease) in payments received in advance 51 (74) 54 (46) (3,116) 233 (3,142) 375 Add/(Deduct) Investing Activity Items Net Loss/(Gain) on disposal of property, plant and equipment 32 26 30 26 Deduct capital accruals (237) 0 (237) 0 Net Loss/(Gain) on foreign currency accommodation bonds 82 (50) 82 (50) (123) (24) (125) (24) Net Cash Inﬂow (Outﬂow) from Operating Activities (1,408) (519) (1,394) (477) Note 14 Contingent Liabilities and Contingent Assets There are no known contingencies for the Group or Parent as at 30 June 2007 (2006: Nil). Note 15 Income Tax Tourism New Zealand is exempt from income tax under the New Zealand Tourism Board Act 1991. Tourism New Zealand’s subsidiaries are subject to income tax. The Group has tax losses unrecognised that can be used to offset future assessable income of $190,038 (2006: $252,690) Note 16 Management of Risk Tourism New Zealand has developed a risk management framework and has undertaken a full risk assessment of its business. Management is required to sign off on a half yearly basis that no new exposures have arisen and that existing risks are being properly managed. Written policies and procedures exist covering those aspects of business which have the potential to generate risk for Tourism New Zealand. Adherence to these policies minimises potential risk to Tourism New Zealand. Employees are required as part of employment contracts to adhere to Tourism New Zealand policies and procedures. 50 WWW.TOURISMNEWZEALAND.COM NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT Note 16 Management of Risk (continued) Tourism New Zealand carries comprehensive insurance covering all normal business risks including Public Liability. Tourism New Zealand has purchased insurance to provide Directors and Ofﬁcers Liability, Employers Liability and Professional Indemnity cover for board members and employees. Tourism New Zealand also provides cover for its staff for offshore travel. Insured values are reviewed annually and adjusted to reﬂect changes in business operations. Note 17 Capital Commitments 2007 2006 2007 2006 $000s $000s $000s $000s Total capital expenditure contracted for at balance date but not provided for in the ﬁnancial statements 0 1 0 0 Note 18 Operating Commitments Operating commitments include non-cancellable lease payments for premises, motor vehicles and ofﬁce equipment and non-cancellable contracts for services like equipment maintenance and public relations. Operating Commitments payable after balance date on: 2007 2006 2007 2006 $000s $000s $000s $000s Non-Cancellable Accommodation Leases: Up to One Year 1,585 1,737 1,520 1,666 One to Two Years 993 1,367 993 1,316 Two to Five Years 2,117 2,052 2,117 2,052 Over Five Years 4,217 53 4,217 53 8,912 5,209 8,847 5,087 Non-Cancellable Motor Vehicle & Equipment Leases Up to One Year 175 192 147 139 One to Two Years 105 110 99 85 Two to Five Years 97 104 88 104 Over Five Years 0 1 0 1 377 407 334 329 Non-Cancellable Contracts for Goods & Services Up to One Year 105 145 105 145 One to Two Years 0 4 0 4 Two to Five Years 0 0 0 0 Over Five Years 0 0 0 0 105 149 105 149 Total Commitments 9,394 5,765 9,286 5,565 TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 51 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT Note 19 Related Party Information Tourism New Zealand is a wholly owned entity of the Crown. The major portion of funding for Tourism New Zealand is received through Vote: Tourism. Other than this, all transactions entered into with Government Departments, State Owned Enterprises and other Crown entities are at normal commercial rates. Tourism New Zealand has expensed contributions to Qualmark New Zealand Limited of $716,000 (2006: $722,222), i-SITE New Zealand (VIN Inc) of $250,000 (2006: $250,000) and The New Zealand Way Limited of $15,000 (2006: $10,000). No related party debts have been written off or forgiven during the year. Note 20 Financial Instruments (i) Currency Risk Tourism New Zealand uses foreign exchange instruments in order to manage its exposure to ﬂuctuations in foreign currency exchange rates on normal operating activities. The instruments are matched with anticipated future cash ﬂows in foreign currencies. Tourism New Zealand does not use ﬁnancial instruments for speculative purposes. At balance date Tourism New Zealand had foreign exchange contracts maturing at various dates over the next 12 months. The fair value of the contracts is based on their agreed New Zealand Dollar settlement value. Off-balance Sheet Exposure 2007 2006 2007 2006 $000s $000s $000s $000s Foreign currency forward exchange contracts: Australian Dollar 8,200 7,500 8,200 7,500 United States Dollar 10,500 10,400 10,500 10,400 Singapore Dollar 1,400 500 1,400 500 European Euro 2,600 1,000 2,600 1,000 Hong Kong Dollar 400 0 400 0 Thai Baht 250 0 250 0 Japanese Yen 4,100 5,300 4,100 5,300 British Pound 7,000 9,000 7,000 9,000 Korean Won 0 16 0 16 34,450 33,716 34,450 33,716 (ii) Interest Rate Risk Tourism New Zealand has no interest rate risk. (iii) Credit Risk Financial assets which potentially subject the Group to concentrations of credit risk consist principally of cash, short-term deposits and receivables. The Group’s cash equivalents and short-term deposits are placed with major trading banks. Receivables are presented net of the allowance for estimated doubtful receivables. Credit risk with respect to receivables is limited due to the generally high credit quality of customers and the Group’s credit policy. Accordingly the Group has no signiﬁcant concentration of credit risk. 52 WWW.TOURISMNEWZEALAND.COM NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT Note 20 (continued) Financial Instruments With respect to foreign exchange instruments, the Group reduces its risk by limiting the counter parties to major trading banks and does not expect to incur any signiﬁcant losses as a result of non-performance by these counter parties. (iv) Fair Values The carrying amount of cash, receivables and payables reﬂect their fair values. The fair value of the foreign currency purchases under forward exchange contracts at balance date was $31.92 million (2006: $36.18 million). These contracts are fair valued by comparing the contracted rate to the market rates for contracts with the same length of maturity. Information on the fair value of all other ﬁnancial instruments recognised in the ﬁnancial statements is included in the relevant notes to the ﬁnancial statements. Note 21 Remuneration of Employees During 2006/2007 33 employees received remuneration and beneﬁts which exceeded $100,000 per annum as follows: $ 2007 2006 100,000–109,999 7 1 110,000–119,999 4 2 120,000–129,999 3 4 130,000–139,999 4 2 140,000–149,999 1 2 150,000–159,999 1 3 160,000–169,999 1 0 170,000–179,999 2 1 180,000–189,999 1 2 190,000–199,999 1 0 200,000–209,999 1 0 210,000–219,999 0 3 220,000–229,999 2 3 240,000–249,999 2 0 280,000–289,999 1 0 290,000–299,999 1 0 380,000–389,999 1 1 33 24 Average remuneration of above employees $164,341 $171,920 Note: A number of Tourism New Zealand employees are based offshore and are paid in local currency at appropriate remuneration levels within the respective countries. This remuneration has been translated at the exchange rates of forward exchange contracts used to hedge this expenditure. TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 53 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 GROUP PARENT Note 22 Remuneration of Directors of Parent Board members’ fees are set by the responsible Minister in accordance with the fees framework (pursuant to S47(1) of the Crown Entities Act 2004). Board members earned the following fees during the year: 2007 2006 $000s $000s Current Board Members W Stone (Chairman) 35 29 S Johnstone 18 15 P Bingham 18 15 K Guy 18 15 S Murray 18 15 G Coughlan 8 0 K McKelvie 8 0 J Barrett 8 0 Retired during 2006/2007 P Stubbs 22 19 M Boyd 10 15 K Johnston 10 15 M Tamaki 10 15 183 153 Up until 26th June 2007 the position of deputy chair was held by P Stubbs, who retired as at that date. S. Johnstone was appointed deputy chair at a meeting of the Board on 21st August 2007. Note 23 Impact of Adopting New Zealand Equivalents to IFRS The New Zealand Accounting Standards Review Board announced on 19 December 2002 that New Zealand International Financial Reporting Standards (NZ IFRS) will apply for reporting periods commencing on or after 1 January 2007. Tourism NZ is adopting NZ IFRS from the ﬁnancial year ending 30 June 2008 and has a project underway to manage the process of converting to NZ IFRS. Transition from existing NZ GAAP to NZ IFRS will be made in accordance with NZ IFRS 1 “First-time Adoption of New Zealand Equivalents to International Financial Reporting Standards.” Upon adoption of NZ IFRS, comparative information will be restated to conform with the requirements of NZ IFRS and the impact that adoption of NZ IFRS has had on the ﬁnancial statements will be set out. The adoption of NZ IFRS will result in changes to the recognition and measurement of the results in Tourism New Zealand’s ﬁnancial statements. The main impact will be on derivative ﬁnancial instruments such as foreign currency contracts which Tourism New Zealand uses to hedge risks associated with foreign currency ﬂuctuations. Derivatives will be recognised in the Statement of Financial Position at fair value with fair value gains or losses recognised in the Statement of Financial Performance. This is likely to result in increased volatility in ﬁnancial performance as fair value movements on the derivatives are recognised. The net fair value loss on foreign currency derivatives during the year was $2.52 million (2006: a gain of $2.47 million). These contracts are fair valued by comparing the contracted rate to the market rates for contracts with the same length of maturity. 54 WWW.TOURISMNEWZEALAND.COM FIVE YEAR FINANCIAL SUMMARY FOR PARENT Statement of Financial Performance 2003 2004 2005 2006 2007 Actual Actual Actual Actual Actual $000s $000s $000s $000s $000s Revenue Government grants 60,201 60,230 69,754 79,358 74,246 Interest 664 419 627 745 859 Other revenue 1,339 310 289 474 246 62,204 60,959 70,670 80,577 75,351 Expenditure Marketing expenses 44,277 47,498 52,213 63,202 55,795 Other expenses 19,231 15,841 16,808 17,427 18,415 Depreciation & impairment 655 714 667 552 738 64,163 64,053 69,688 81,181 74,948 Net Operating Surplus (Deﬁcit) (1,959) (3,094) 982 (604) 403 Statement of Financial Position 2003 2004 2005 2006 2007 Actual Actual Actual Actual Actual $000s $000s $000s $000s $000s Current Assets Cash 7,625 4,062 6,673 6,086 3,272 Receivables 1,299 655 1,133 882 1,135 Prepayments & other current assets 466 684 600 275 2,719 9,390 5,401 8,406 7,243 7,126 Non-current Assets Property, plant and equipment 2,123 1,725 1,223 1,469 1,609 Accommodation bonds 315 298 228 340 275 2,438 2,023 1,451 1,809 1,884 Total Assets 11,828 7,424 9,857 9,052 9,010 Current Liabilities Payables & accruals 3,818 2,401 4,568 4,389 3,900 Provisions 626 626 0 0 0 Employee entitlements 362 371 333 357 347 Payments received in advance 0 98 46 0 54 4,806 3,496 4,947 4,746 4,301 Equity Shareholder’s equity 1,805 1,805 1,805 1,805 1,805 Retained earnings 5,217 2,123 3,105 2,501 2,904 7,022 3,928 4,910 4,306 4,709 Total Liabilities and Equity 11,828 7,424 9,857 9,052 9,010 TOURISM NEW ZEALAND ANNUAL REPORT 2006–2007 55 AUDIT REPORT TO THE READERS OF THE NEW ZEALAND TOURISM BOARD AND GROUP’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 The Auditor-General is the auditor of the New Zealand Tourism – verifying samples of transactions and account balances, Board (“the Board”) and group. The Auditor-General has appointed – performing analyses to identify anomalies in the reported data, me, Marcus Henry, using the staff and resources of Ernst and Young, to carry out the audit of the ﬁnancial statements of the – reviewing signiﬁcant estimates and judgements made by the Board and group, on his behalf, for the year ended 30 June 2007. Board of Directors, Unqualiﬁed Opinion – conﬁrming year-end balances, In our opinion the ﬁnancial statements of the Board and group – determining whether accounting policies are appropriate and on pages 14 to 33 and 39 to 54: consistently applied, and – comply with generally accepted accounting practice in – determining whether all ﬁnancial statement disclosures are New Zealand; and adequate. – fairly reﬂect: We did not examine every transaction, nor do we guarantee – the Board and group’s ﬁnancial position as at complete accuracy of the ﬁnancial statements. 30 June 2007; We evaluated the overall adequacy of the presentation of – the results of their operations and cash ﬂows for the information in the ﬁnancial statements. We obtained all the year ended on that date; and information and explanations we required to support our – the service performance achievements measured against opinion above. the performance targets adopted for the year ended on Responsibilities of the Board of Directors and the Auditor that date. The Board of Directors is responsible for preparing ﬁnancial The audit was completed on 30 October 2007, and is the date statements in accordance with generally accepted accounting at which our opinion is expressed. practice in New Zealand. Those ﬁnancial statements must fairly reﬂect the ﬁnancial position of the Board as at 30 June 2007. They The basis of our opinion is explained below. In addition, we outline must also fairly reﬂect the results of their operations and cash ﬂows the responsibilities of the Board of Directors and the Auditor, and and service performance achievements for the year ended on that date. explain our independence. The Board of Directors’ responsibilities arise from the Crown Entity Act Basis of Opinion 2004 and the New Zealand Tourism Board Act 1991. We carried out the audit in accordance with the Auditor-General’s We are responsible for expressing an independent opinion on Auditing Standards, which incorporate the New Zealand Auditing the ﬁnancial statements and reporting that opinion to you. This Standards. responsibility arises from section 15 of the Public Audit Act We planned and performed the audit to obtain all the information 2001 and the Crown Entity Act 2004. and explanations we considered necessary in order to obtain reasonable assurance that the ﬁnancial statements did not have Independence material misstatements, whether caused by fraud or error. When carrying out the audit we followed the independence requirements of the Auditor-General, which incorporate the Material misstatements are differences or omissions of amounts and independence requirements of the Institute of Chartered disclosures that would affect a reader’s overall understanding of the Accountants of New Zealand ﬁnancial statements. If we had found material misstatements that were not corrected, we would have referred to them in our opinion. Other than the audit, we have no relationship with or interests in the Board or any of its subsidiaries. The audit involved performing procedures to test the information presented in the ﬁnancial statements. We assessed the results of those procedures in forming our opinion. Audit procedures generally include: MARCUS P. HENRY – determining whether signiﬁcant ﬁnancial and management Ernst and Young controls are working and can be relied on to produce complete On behalf of the Auditor-General and accurate data, Wellington, New Zealand 56 WWW.TOURISMNEWZEALAND.COM Tourism New Zealand Manaakitanga Aotearoa, PO Box 95, 80 The Terrace, Wellington, New Zealand Tel : +64 4 917 5400 www.tourismnewzealand.com www.newzealand.com This Annual Report has been printed using vegetable oil based ink on 100% recycled waste paper. The paper is manufactured using a chlorine free process (PCF) and has been sourced from an ISO14001 certiﬁed mill. It bears a number of additional environmental accreditations including Blue Angel, Nordic Swan and the Austrian Environmental Label.
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