tourism new zealand by sihem13

VIEWS: 9 PAGES: 60

More Info
									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.

								
To top