Tourism New Zealand ADS China Monitoring Unit Progress Report
November 2007 to June 2009
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Table of Contents
1. 1.1 Introduction..................................................................... 3 Shift of Administration from ITOC to TNZ ............................ 3
2. TNZ Administration of the ADS Code of Conduct: Results Summary .................................................................................. 6 2.1 2.2 2.3 2.4 The key “objective standards”............................................ 6 How has TNZ assessed compliance?.................................... 6 Key partnering organisations ............................................. 6 Overview results from the assessments............................... 7
Accommodation .................................................................7 Tour Coaches.....................................................................8 Tour Guides..................................................................... 10 Tour Inclusions ................................................................ 10 Shopping ........................................................................ 11
2.4.1 2.4.2 2.4.3 2.4.4 2.4.5
3. 3.1 3.2
Administration of the Code: ADS Code breaches ............ 13 Code breaches............................................................... 13 Action taken by TNZ ....................................................... 14
4. Ministry of Tourism International Visitor Survey - “No” and “Main” disappointments .................................................. 15 4.1 International Visitor Survey – Chinese Holiday Visitors vs. All Holiday Visitors ...................................................................... 15 5. 5.1 5.2 5.3 Challenges, Action taken by TNZ, and Next Steps .......... 17 Challenges .................................................................... 17 Action taken by TNZ ....................................................... 17 Next Steps .................................................................... 17
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1. Introduction
The purpose of this report is to examine the progress made by Tourism New Zealand (“TNZ”) towards meeting each of the objectives outlined in section 2.1 (“purpose”) of the ADS Code of Conduct (“the Code”). This report will review the methods adopted by TNZ to administer the Code, and will provide the outcomes of TNZ’s administration of the Code. The purpose of the Tourism New Zealand ADS Code of Conduct is as follows: 1. to prescribe a set of procedures and standards which, if complied with by the ITOs will ensure that Chinese visitors receive a good quality tour experience in New Zealand; 2. to improve New Zealand’s competitive position in the China outbound tour market and encourage sustainable growth of China inbound tours to New Zealand; and 3. to enable effective management, administration and enforcement of the China ADS system by TNZ and TMT and in conjunction with the other New Zealand government agencies with functions and enforcement powers in areas relevant to the China inbound tour market. Section 2.2 of the Code states that the intended purpose is to be achieved by stipulating an integrated series of objective standards and measures which, if they are implemented, applied and adhered to by the ITOs, will result in the ITO providing a good quality tour experience for the Chinese visitors.
1.1
Shift of Administration from ITOC to TNZ
Early 2007: Cabinet decides to transfer responsibility for the ADS system from ITOC to TNZ. September 2007: TNZ ADS Code of Conduct is published on the TNZ website and the Tourism New Zealand China Monitoring Unit is established. 01 November 2007: The TNZ ADS Code of Conduct takes effect. Reasons the shift of administration from ITOC to TNZ of the ADS system took place are as follows: ■ Concern over the impact on visitor satisfaction of low value Chinese ADS tours involving excessive commission based shopping and low cost tourism products and service (figure 1 shows the trends of “no disappointments” for China market for the period 2003 to 2006, figure 2 shows the Chinese visitors survey results in “no disappointment” in 2006). Acknowledgement that ITOC found it difficult to address the quality issues associated with ADS tours being: 1) lack of financial resource; 2) lack of
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dedicated people resource; and 3) lack of willingness to take penalty actions against its own members.
Figure 1: “No disappointments” survey between China market and all other markets for the period 2003 to 2006
For the period 2003 to 2006 there was a significant reduction in the numbers of Chinese holiday visitors reporting “no disappointments” concerning their New Zealand tourism experience.
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Figure 2: “Disappointments” in Chinese visitor survey 2006
The “top 4” disappointments for the year ended March 2006 were as follows: 1. Not enough time in New Zealand or a specific place in New Zealand: 24% 2. Accommodation substandard: 21% 3. Restaurants substandard: 17% 4. Difficulty at airport: 13%
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2. TNZ Administration of the ADS Code of Conduct: Results Summary
This section summarises the key objective standards, ways TNZ assessed these standards, and the overview results received from these assessments.
2.1
The key “objective standards”
TNZ has focussed on six key areas that impact on the China visitor experience in New Zealand: ■ ■ ■ ■ ■ ■ Accommodation Activities Itineraries Shopping Tour guides Transportation
2.2
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How has TNZ assessed compliance?
Spot checks: 31 conducted - TNZ (8), TNZ + NZTA (7), TNZ authorised investigators (16). Itineraries: received regularly from Immigration New Zealand China branches. Audit visits: 2 rounds completed. Mystery shoppers: 6 completed.
2.3
Key partnering organisations
New Zealand Transport Agency (NZTA) TNZ and NZTA have cooperated in the following areas: ■ Joint “spot check” operations out of Auckland and Rotorua. The NZTA has provided invaluable technical expertise in the areas of vehicle and driver licensing as well as vehicle maintenance and repair, during the course of these operations. ■ The verification of vehicle and driver licensing information. Aviation, Tourism and Travel Training Organisation (ATTTO) TNZ and ATTTO have cooperated in the training and accreditation of ADS tour guides. There are currently 91 ADS accredited guides. Bus and Coach Association (BCA) TNZ and BCA have cooperated in the following areas: ■ The update of the coach star rating system in order to incorporate (amongst other requirements) minimum standards in terms of general maintenance and appearance of star rating coaches. This new system took effect from 01 June 2009,
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The verification of star rated coaches sighted by Tourism New Zealand during “spot check” operations, General information sharing concerning coach standards.
Immigration New Zealand (INZ) TNZ and INZ have cooperated in the following areas: ■ The supply of ADS tour itineraries by Chinese INZ branches to TNZ on a weekly basis, ■ The supply of Chinese tour group visa application statistics by INZ to TNZ on a monthly basis, ■ General information sharing concerning ADS tourism market.
2.4
Overview results from the assessments
2.4.1 Accommodation
2.4.1.1 Code requirements
11.10 From 01 December 2008, The ADS approved ITO must use as accommodation for ADS tours only hotels that hold a Qualmark rating of 3 stars or higher or self-contained accommodation that holds a Qualmark rating of 4 stars or higher.
2.4.1.2 ■
2.4.1.2
Improvements/Key findings
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There appears to have been an increase, from 2008 to 2009, in the number of 4 star hotels being used to accommodate ADS tours. This is based on information obtained by TNZ during the course of “on the road” spot checks of ADS tours. There appears to have been a reduction in the number of Chinese visitors reporting accommodation as a “main disappointment” - from 16% for the year ended June 2008 to 7% for the 9 month period July 2008 to March 2009. This is based on information obtained by the Ministry of Tourism from Chinese holiday visitors to New Zealand (figure 3).
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Figure 3: Accommodations being used in 2008 vs. 2009
2.4.2 Tour Coaches
2.4.2.1
11.5
Key code requirements
From 01 May 2008, the ADS approved ITO must use as transport for ADS tours only buses and coaches: 11.5.1 11.5.2 condition: which are clean, in good operating condition and in good repair; standard: which have been assessed for and issued with the Bus & Coach Association (NZ) Inc 3 star standard grading certificate (the current version of which is set out in Schedule 7) by Vehicle Testing New Zealand (VTNZ) and which have affixed to the body of the vehicle the star rating decal issued by the Bus and Coach Association licence: which have a current certificate of fitness and all other vehicle licences required by Land Transport for a vehicle transporting tour groups ; driver: which are driven by an experienced driver who: (a) licenses etc: holds all current licences or certificates required by Land Transport for the driver of a vehicle transporting tour groups; and
11.5.3
11.5.4
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(b)
residence, work permit etc: currently holds New Zealand citizenship, New Zealand residence status or a permit to work in New Zealand.
2.4.2.2 ■
Improvements/Key findings
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There appears to have been an increase in the number of newer coaches (i.e. those less than 5 years old) being used to transport ADS tour groups. This is based on information obtained by TNZ during the course of “on the road” spot checks of ADS tours. Star rated coaches now need to go through annual recheck which includes an assessment on coach presentation and general maintenance. There has been a 30% increase, over the 12 month period May 2008 to May 2009, in the number of 3-star or higher rated coaches available in NZ. As of 4 June 2009 there were 548 3-star or higher rated coaches available compares with 383 back in May 2008. Over the 12 month period May 2008 to May 2009, the New Zealand Transport Agency has found that: “It is the view of the NZTA staff who participated in these operations that the
combined approach taken in Rotorua throughout 2008/09 has resulted in improved vehicle compliance and safety, and compliance with licensing requirements. NZTA is of the opinion that the advisory approach taken has been very successful. In most cases there was a willingness to resolve any vehicle fault detected early. ”
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The Bus and Coach Association has recently incorporated minimum standards in terms of coach maintenance/appearance into its star rating system. These requirements took effect on 1 June 2009.
Figure 4: Tour coaches being used in 2008 vs. 2009
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2.4.3 Tour Guides
2.4.3.1
11.7.2 11.7.4
Key code requirements
English: meets the minimum standard of English (with effect from 1 May 2008)… geographical, tourism knowledge: From 01 December 2008 for all ADS tours conducted and administered by the ITO, have passed the Aviation Tourism and Travel Training Organisation (ATTTO) administered [tour guiding qualifications] immigration status: who currently hold New Zealand citizenship, New Zealand residence status or a permit to work in New Zealand experience: who have at least six months’ experience guiding inbound tours in New Zealand.
11.7.5 11.7.6
2.4.3.2
Improvements/Key findings
There are currently 93 ADS accredited tour guides: ■ 85% are NZ residents or citizens and 15% are on valid work permits. ■ All meet minimum English language standards. ■ All have successfully completed ATTTO tour guide training. ■ All have a minimum of 6 months experience working as tour guides in New Zealand. The tour guides encountered by TNZ conducting ADS tours have had in average of 3 years guiding experience.
2.4.4 Tour Inclusions
2.4.4.1 Code requirements
8.2.3 tour content: that each ADS tour conducted or administered by the ADS approved ITO and completed during the return period must include: (b) minimum tour inclusions: no less than the number of tour inclusions set out below: (i) (ii) North Island tour: for a North Island tour two paid inclusions ; and South Island tour :for a South Island tour one of the following: (A) (B) paid inclusions: two paid inclusions; or paid and optional inclusions: one paid inclusion and one optional inclusion; or
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(C) (iii)
optional inclusions: two optional inclusions: and
North Island/South Island tour: for a North Island/South Island tour, one of the following: (A) (B) (C) paid inclusions: four paid inclusions; or paid and optional inclusions: three paid inclusions and one optional inclusion; or optional inclusions: two paid inclusions and two optional inclusions; and
2.4.4.2 ■
Improvements/Key findings
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During the period 01 November 2007 to 31 May 2009, a total of 319 ADS tour itineraries have been checked during the course of review visits and spot checks conducted by TNZ. 305 (96%) itineraries have been found to include minimum required number of tour inclusions during this period. All mystery shoppers indicated that they enjoyed visits to tour inclusion providers. The majority of cases of non-compliance occurred during the period 01 November 2007 to 29 February 2008.
2.4.5 Shopping
2.4.5.1 Code requirements
8.2.3 tour content: that each ADS tour conducted or administered by the ADS approved ITO and completed during the return period must include: (a) maximum organised shopping time: no more than: (i) (ii) 1.5 hours of organised shopping time for each full day spent in New Zealand plus one Duty Free Shop visit per visit to New Zealand, or 3 hours of organised shopping time over two consecutive full days spent in New Zealand plus one Duty Free Shop visit per visit to New Zealand. The amount of time spent at any single organised shopping venue may not exceed 1 hour and 30 minutes. For example. Day Two: 2 hours of organised shopping at two souvenir shops (1 hour at each shop); Day Three: 1 hour of organised shopping at one souvenir shop
11.2.2 specific duties: without limiting the generality of section 11.2.1, the general duty of care in section 11.2.1 includes the following specific duties – i.e. to ensure that the Chinese visitors on an ADS tour:
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(f)
exploitation: are not exploited for financial gain including, but limiting the generality of paragraph (f), that the without visitors: (iii) (iv) forced shopping: are not made to shop in retail shopping outlets against their wishes; fake goods: are not taken to retail shopping outlets which sell goods to Chinese tourists that are fake or misdescribed; and inflated prices: are not taken to retail shopping outlets which charge more than a fair market price for goods offered for sale to Chinese tourists
(v)
2.4.5.2
Improvements/Key findings
During the period April 2008 to May 2009, as the result of spot and mystery shopper checks, the following is noted: ■ 89% of organised shopping activities investigated by TNZ were scheduled in the ADS tour itinerary. ■ 91% of organised shopping activities excursions met the maximum organised shopping time limit. ■ While mystery shopper feedback about shopping in NZ is mixed, the mystery shoppers have reported that overall the shopping experience in NZ is less pressured than that in Australia.
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3. Administration of the Code: ADS Code breaches
3.1 Code breaches
Since the Code of Conduct took effect on 1 November 2007, 47 confirmed breaches of the Code have been identified by Tourism New Zealand. Examples include: ■ Lack of visible ADS signage on tour coaches, ■ Unscheduled, excessive or overpriced organised shopping, ■ Coach drivers without “P” endorsement, ■ Poorly maintained tour coaches (figure 5), ■ The supply of company letterhead by ADS approved ITOs to non-ADS approved ITOs, ■ False information supplied to TNZ investigator by tour guide.
Figure 5: coach spotted being used for ADS tour during joint operation with NZTA
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3.2
1. ■ ■ ■
Action taken by TNZ
Corrective action (x21) has generally applied to: Single breaches of the Code, “First time” breaches of the Code, Breaches of sections 11.3 and 11.8 of the Code.
2. Probationary action (x7) has generally applied to: ■ Multiple breaches of the Code. ■ Repeated breaches of the same section of the Code (excluding sections 11.3 and 11.8). 3. Suspension (x3) /revocation (x1) of ADS approval has generally applied to: ■ Breaches of sections 12.13 and 12.14 of the Code. 4. ITOs under investigation (x2)
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4. Ministry of Tourism International Visitor Survey - “No” and “Main” disappointments
This section presents the International Visitor Survey (IVS) results conducted by the Ministry of Tourism, comparing the Chinese holiday visitors and all holiday visitors on “No Disappointments” survey, as well as that for ADS tour groups alone for the period July 2008 to March 2009.
4.1 International Visitor Survey – Chinese Holiday Visitors vs. All Holiday Visitors
There has been an encouraging increase during the period 2006 to March 2009 of Chinese holiday visitors reporting “no disappointments” with their New Zealand tourism experience. These figures are derived from information obtained in the IVS from Chinese holiday visitors to New Zealand for the period 2003 to March 2009 (figure 6).
Figure 6: International Visitor Survey – “No Disappointments”
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4.2
International Visitor Survey – ADS Groups
78% of Chinese “holiday visitors” surveyed during July 2008 to March 2009 categorised their travel type as “tour” or “package”. These people are most likely to have travelled with ADS tour groups. These people describe their main disappointments as follows (figure 7): ■ ■ ■ ■ ■ ■ ■ No disappointments: 43% Not enough time in New Zealand or specific places in New Zealand: 29% Shopping: forced / too expensive / too much time / no standard for pricing or quality: 14% Didn’t visit the South Island: 10% Substandard accommodation: 7% Substandard meals: 4% Other (airport/customs, no Chinese language signs, “too expensive”, tour guide, tour leader, transport, weather): 10%
Figure 7: International Visitor Survey: ADS Groups
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5. Challenges, Action taken by TNZ, and Next Steps
5.1
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Challenges
Organised shopping activities still a major source of dissatisfaction amongst Chinese holiday visitors. NZ tour operators still heavily reliant on souvenir shops to cover costs, due to non-payment of full tour fee by Chinese travel sellers. Chinese travel sellers not providing visitors with complete and accurate information about their NZ tour. False information supplied by Chinese travel sellers and tour guides. Parts of the ADS Code of Conduct are redundant or difficult to administer. Accommodation continues to be reported as a major disappointment by approximately 1 in 14 Chinese tour group holiday visitors. A further increase in the number of ADS accredited tour guides is required to meet “peak season” demands.
5.2
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Action taken by TNZ
A printed shopping guide was developed for Chinese visitors and is currently being distributed TNZ has filed some specific complaints with the Commerce Commission concerning activities of souvenir shops. These complaints are currently under investigation.
5.3
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Next Steps
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The current ADS Code of Conduct will be revised and simplified before the end of 2009 following a review that will take place in conjunction with the Ministry of Tourism. Industry feedback will be sought during this process, TNZ is evaluating a proposal to train tour guides based in Southern China to the New Zealand ADS standard. This will enable the use of throughguides during peak demand periods. Funding is being sought for this pilot scheme which if approved will run initially for one year to allow for initial evaluation. TNZ will shortly be evaluating the case for Chinese travel agents who are involved in the New Zealand ADS system to be required to comply with some basic undertakings that relate to itinerary compliance and transparency, payment terms to NZ Inbound Operators and fair shopping practices. TNZ will be seeking assistance from The China National Tourism Administration (CNTA) in implementing such measures, many of which are now covered by new Chinese travel legislation.
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Best regards
Cici Huang China Market Development Coordinator China Monitoring Unit Tourism New Zealand
Andrew Johns China Market Development Manager China Monitoring Unit Tourism New Zealand
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