James Higham I Robin Gauld I Craig Stobo I David C. Adeloye I Parisa Saadat

Directors: Higham, J.E.S., Gauld, R. & Stobo, C.Title: White paper: Tourism and Sustainability: Volume vs ValueVenue: Queenstown Resort CollegeDate: 7–8 March 2019

ISBN 978-0-473-48875-8

Tourism and SustainabilityVolume vs Value?

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CONTENTS

Introduction 2

Opening Speech, Hon Kelvin Davis (Minister of Tourism) 2

Session 1: New Zealand and Global Tourism: The Issues 3

Tourism in New Zealand, Government Priorities, Iain Cossar (MBIE Principle Policy Advisor – Tourism) 3

Industry challenges, Issues and Opportunities, Paul Anderson (CEO nzski.com) 4

A Global View from Switzerland, Urs Eberhard (Head of Markets Switzerland Tourism) 5

Roundtable 1: What are the emerging global issues? 5

Session 2: Environmental Sustainability: Challenges And Opportunities 6

Tourism and global environmental change: the IPCC special report October 2018, Prof. Stefan Gössling (Lund University) 6

What about the New Zealand environment? Judy Chen (Tourism Export Council New Zealand CEO). A commercial tourism operator perspective 7

Domestic Responses to Global Issues: Tourism and the Sustainable Development Goals, Professor Jonathan Boston (Victoria University Wellington) 8

Roundtable 2: What about the environment? 8

Session 3: Managing Growth: Opportunities for Disruption 9

Global Tourism: Managing Explosive Growth, Elizabeth Becker (Freelance Journalist: Author of ‘Overbooked’) 9

Local Government Priorities - Dealing with Central Government, Dave Cull Mayor, President of Local Government New Zealand 9

Who pays for change; who pays for no change? Jason Krupp (LGNZ) 10

Indigenous Business Model, Quinton Hall (CEO Ngāi Tahu Tourism) 10

Roundtable 3: Opportunities for disruption 10

Summary 11

Emerging research agenda 11

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INTRODUCTION

The Inaugural University of Otago Tourism Policy School (Queenstown, 7-8 March, 2019) was devoted to Tourism and Sustainability – Volume vs Value? A key goal of the Tourism Policy School was to bring together policy makers, industry and academia to discuss and debate critical challenges facing the sector with a focus on generating practical outcomes: policy advice; guidelines and directions for the sector; and indications for where research is needed. Keynote and plenary discussions were organised into three sessions. Each session addressed specific topic areas followed by roundtable discussions, with priority given to participant questions and comments, and the exchange of ideas. The sessions were:

• Session 1: New Zealand and Global Tourism: The Issues.

• Session 2: Environmental Sustainability: Challenges and Opportunities.

• Session 3: Managing Growth: Opportunities for Disruption.

Opening Speech, Hon Kelvin Davis (Minister of Tourism)

The opening keynote addressed the significance of tourism to the New Zealand economy as well as some of the issues associated with sustained high growth in the tourism sector. The Minister began by laying emphasis on the importance of embracing the uniqueness of Māori offerings in New Zealand tourism. Tourism is New Zealand’s largest export industry, contributing 21% of foreign exchange earnings. Despite record success, the New Zealand tourism sector faces growth issues. At the centre of these issues are sustainable growth, uneven regional distribution of tourism growth and some aspects of tourist behaviour. The Minister observed that the environment sits at the heart of every decision and action taken, and highlighted some of the initiatives taken to address these issues. These initiatives are built around productivity, sustainability and inclusiveness through:

• Commitment to value while managing volume;

• Improving collaboration among stakeholders;

• Developing regional tourism products;

• Encouraging and investing in responsible camping;

• Ensuring re-investment in conservation and tourism; and,

• Managing inclusive tourism with New Zealanders encouraged to be a part of the tourism system.

Fundamentally, the Minister’s clear message from the outset of the Tourism Policy School was the set the challenge “to be bold”. The tourism industry faces global challenges that can not be ignored. Key actors in the tourism system must work together to boldly address the challenges that we face and the opportunities arising.

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SESSION 1: NEW ZEALAND AND GLOBAL TOURISM: THE ISSUES

The first session addressed global tourism issues. The session included three invited speakers on tourism in New Zealand, industry challenges and issues as well as a global tourism view from Switzerland.

Iain Cossar (General Manager, Tourism and Economic Development, MBIE)Tourism in New Zealand, Government Priorities

Discussions addressed the government’s role in coordinating New Zealand’s tourism sector with the overall aim of enriching Aotearoa New Zealand through sustainable tourism growth (i.e. the economy, visitors, the environment, New Zealanders, and regions). To this effect, the New Zealand government has a role to play as both tourism system stewards and tourism system actors. As stewards, the government sees to it that the tourism system is able to deliver productive, sustainable and inclusive growth by shaping visitors demands, helping the market respond effectively to demand, and calibrating the system to deliver for visitors and New Zealanders. As actors, the government optimizes distribution of tourism across regions through investments and interventions, such as public conservation amenities and public goods used by visitors. The presentation also addressed the tourism regional investment framework. A successful government coordination considers how to:

• Raise visitors’ Awareness of regions;

• Ensure visitors have the Amenities and Attractions that visitors want;

• Ensure visitors can Access regions; and,

• Ensure the Attitudes of people who live in the regions make for a positive visitor experience.

Strategic priority work areas were addressed, including enhanced data and insight, improving destination management planning at a regional level and implementing the International Visitor Conservation and Tourism Levy (IVL). Funds from the IVL will aim to:

• Contribute to government’s aims for tourism and conservation;

• Contribute to a broader tourism system change;

• Have flexibility to respond to changes over time;

• Complement existing funding mechanisms, rather than duplicate; and,

• Contribute to government’s overall economic strategy of productive, sustainable and inclusive growth.

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Paul Anderson (CEO nzski.com) Industry challenges, Issues and Opportunitiesotago.ac.nz/tourism-policy/panderson.pdf

This presentation addressed the industry challenges, issues and opportunities. To tackle the impending issue of overcrowding (i.e. high demand, less supply), a proactive approach was suggested as it is easier to prevent a problem than to recover from it. As visitor experience is key to providing value, the following points were highlighted and discussed:

• The need for government to oversee/regulate the affairs of the several agencies involved in New Zealand’s tourism operations;

• The need for certainty of direction and process;

• The need for accountability for time frames and delays;

• The need to improve biodiversity and birdlife;

• The need for tourism organizations to align with the government’s vision;

• The need to hold tourism operators to account; and,

• The importance of visionary leadership.

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Urs Eberhard (Head of Markets Switzerland Tourism) A Global View from Switzerlandotago.ac.nz/tourism-policy/ueberhard.pptx

The tourism sector should be result-oriented as it influences tourism policy making. Attention should be given to results, that is, analysing implemented strategies that have been effective and those that have not. Encouraging visitors to stay longer was a key strategy. This can be achieved through product development, creation of special destinations (e.g. first ski experience and destination wedding), and promoting plans (e.g. Stopover Switzerland) with the overall aim of making travel easier and holistic for tourists. In addition, four major key areas were highlighted:

• Promoting entrepreneurship: with the aim of increasing productivity, boosting skills and competencies, supporting structural change, and strengthening the tourism labour market.

• Improving framework conditions: through coordination amongst all government agencies and the facilitation of a tourism-friendly regulatory environment.

• Making use of digital opportunities: Social media provides a platform for a range of new and emerging opportunities, including the detailed performance reporting.

• Market diversification: The need for product development and product diversification as it ensures balance across regions and year-round demand.

Roundtable 1: What are the emerging global issues?

The plenary discussion addressed emerging global issues. Some of the issues raised included the need for a strong tourism voice at the global level, the role of universities in training future employees and creating clear career paths, overtourism and destination management, and the need to focus more on the local market and community. Emphasis was particularly placed on the relationship between volume and value and the yardstick for measuring value. It was agreed that value should not be measured only on fiscal terms, rather, it should include other variables such as host community wellbeing, quality of life, quality of visitor experience, investment in workforce, social benefits and intellectual exchange. There is a clear need for a more critical and unambiguous definition and understanding of ‘value’, as an important step towards being able to more comprehensively measure the full value of such a dynamic industry sector. Switzerland Tourism offered valuable insights into a highly integrated model that brings together government and business funding and both international and domestic marketing strategies, in a results-oriented approach that seeks to achieve outcomes that are measured in terms of the full value of tourism.

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SESSION 2: ENVIRONMENTAL SUSTAINABILITY: CHALLENGES AND OPPORTUNITIES

Discussions in session two centred on environmental sustainability. The session included three keynotes that addressed tourism and global environmental change, the New Zealand environment and domestic responses to global issues with regards to the United Nations (2015) Sustainable Development Goals (SDGs).

Prof. Stefan Gössling (Lund University) Tourism and global environmental change: the IPCC special report October 2018otago.ac.nz/tourism-policy/sgossling.pptx

The issue of global environmental change in relation to the Intergovernmental Panel on Climate Change (IPCC) 1.5°C report and its implications for tourism were addressed in confronting detail in the first keynote. The report suggests that global warming is likely to reach 1.5°C between 2030 and 2052 if it continues at the current rate. As the tourism industry is heavily dependent on the environment, global warming has become a rapidly emerging threat for tourism. For New Zealand, many activities are weather-dependent and therefore susceptible to medium- and long-term risks such as loss of assets (e.g. skiing, beaches), market stability and climate change mitigation policy. As tourism contributes about 8% of global CO2, it has a role to play in tackling climate change concerns such as, rapid decarbonation, reduction of emissions in significant areas (e.g. cruises, aviation), removal of fossil fuel subsidies and removal of aviation subsidies. Other actions to tackle climate change were addressed:

• Encouraging strengthened sector-wide engagement and support for emission reduction targets and alignment to Paris Agreement commitments;

• Encouraging all countries to proactively engage in decarbonisation based on Nationally Determined Contributions (NDC) in order to impart a collective tourism voice in policy development and investment in the transition to a decarbonised economy, and to assess the differential implications of alternate emission pathways for tourism;

• Encouraging tourism operators to adopt an internal price of carbon for all operations and strategic planning decisions, with a minimum initial price guided by International Energy Agency price projections for 2020 and national ‘best practice’ guidance;

• Encouraging all major tourism operators to measure and disclose emissions according to ‘best practice’ guidelines and establish emission reduction targets consistent with targets set out in their country’s NDC;

• Encouraging all Parties of the Paris Agreement to review policy and research and development programmes to build new partnerships with the tourism industry (not solely aviation) and science organisations to accelerate the development of commercially scalable, sustainable low-carbon fuels for aviation;

• Encouraging all countries to accelerate the deployment of ‘best practice’ energy efficiency retrofits and renewable energy investment in the accommodation sector;

• Encouraging the development of new decision support tools by tourism organisations that incorporate climate change mitigation and adaptation considerations into destination management planning and scale up ‘best practice’ strategic planning and partnerships for implementing low-carbon and climate-resilient pathways;

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• Encouraging all national tourism organisations (NTOs) and destination marketing organisations (DMOs) to consider the implications of new market developments. Tourism should be developed based on spending or length-of-stay, with a view to seek growth from closer markets;

• Taking a global leadership position to develop and implement a tourism sector emissions monitoring system so that progress could be reported on during the 2023 global stocktaking cycle of the Paris Agreement. All European countries should be encouraged to further collaborate with other Parties to the Agreement to design emissions monitoring systems that could be expanded globally; and,

• Establishing, under the auspices of the ETC, WTTC or another body, an expert panel/task force to assess how the transition to a decarbonised tourism economy can be accomplished starting immediately and over the coming years. The panel should include industry, policy leaders and scientists, and develop a policy framework to enable this transformation and assess the differential regional implications and associated inequalities. This would include consideration of transnational impacts and responses that will influence European strategic tourism interests, such as the implementation modalities of ICAO’s carbon neutral growth 2020 strategies.

Judy Chen (CEO Tourism Export Council New Zealand). What about the New Zealand environment? A commercial tourism operator perspectiveotago.ac.nz/tourism-policy/jchen.pptx

There is a willingness among tourism operators to contribute to environmental sustainability. However, they sometimes lack the know-how or where to start from. In addition, most SMEs focus on profitability (especially during economic uncertainties) which poses a challenge. Other challenges identified included cost/benefit analysis, lack of incentive to act immediately as well as lack of infrastructure to support initiatives (e.g. biodegradable waste collection/procession). Several key recommendations were presented:

• The government working closely with industry to establish policies that will accelerate positive change;

• More government investment in public campaign to educate/create awareness and build better infrastructures that supports key initiatives;

• The need to allow sufficient lead-in time for implementation especially when costs are associated/disruption to operations;

• The need for systems to recognise good practices which could be used as a competitive advantage among operators;

• The need for partnership between government and the industry; and,

• Learning from successful case studies around the world.

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Professor Jonathan Boston (Victoria University Wellington) Domestic Responses to Global Issues: Tourism and the Sustainable Development Goalsotago.ac.nz/tourism-policy/jboston.ppt

Domestic responses to global issues from an SDGs standpoint were discussed and some of the key points focused on the unsustainability of the current global and local life styles and how tourism is a major contributor to global environmental degradation and biodiversity loss. Radical policy changes are vital in order to provide a framework to guide humanity’s response to the looming crisis. The aim of the draft Aotearoa New Zealand Tourism Strategy is “to enrich New Zealand through sustainable tourism growth” and the fundamental aim should be to ensure that all aspects of the tourist industry and its value chain, locally and globally, are truly sustainable – environmentally, socially and culturally.

Roundtable 2: What about the environment?

The focus of this roundtable was on the urgency of progress in tackling environmental challenges and leadership through agility and adaptability. Speakers discussed the need for the tourism sector to effectively communicate tourism problems to academics, government or other industry leaders. The need for cross-sectorial collaborations and exchange of ideas and also encouraging bio-technology and hybrid solutions for carbon issues (e.g. bio-fuels, electric options) was also evident. Significance of the domestic market as a ‘more sustainable’ strategy through the reduction of long-haul market was highlighted.

The Tourism Sustainability Commitment initiative was also addressed. The TSC was grounded on the UN’s Sustainable Development Goals. While the Goals do not directly map across into the TSC, the balanced approach of the SDGs certainly has. The TSC was launched in November 2017 and has been supported by two TIA-employed Sustainability Advocates. To the time of the TPS, 815 businesses had signed up. The TSC is comprised of 14 Commitments sitting underneath eight Goals - two each for the four central elements: Economic, Community, Visitor and Environment. These Commitments are the most important, as they set out what businesses can do to become more sustainable and thereby make a difference at the industry level. The most pressing issue facing the TSC was considered to be energy intensity, carbon emissions and climate change. Within current technologies, the industry cannot solve the carbon challenge, but can push for improvements and can work with technologies that, when applied widely, can make a big difference, whether it is electrification of fleets or hydrogen technologies, which seem the most likely.

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SESSION 3: MANAGING GROWTH: OPPORTUNITIES FOR DISRUPTION

The third and final session addressed issues of growth and its management. The initial discussion addressed the issue of overtourism and how it could be managed. Other discussions in the session included local government priorities, who pays for change, and indigenous business models.

Elizabeth Becker (Freelance Journalist: Author of ‘Overbooked’) Global Tourism: Managing Explosive Growth.

The growth of the middle class has brought with it significant global growth in tourist numbers across destinations. Beautiful destinations bear the brunt of this explosive growth in tourist numbers as tourists mostly visit these destinations in what was termed “loving a place to death”. It is therefore necessary to carefully manage visitor numbers. The role of good governance in managing explosive growth was emphasised. Among some of the recommendations suggested were:

• Learning from other destinations that have been successful in managing explosive growth in visitor numbers;

• Adopting indigenous perspectives as a way to manage tourism landscapes and environments;

• Figuring out each destination’s critical limits of elements of capacity;

• Findings ways to ensure that tourism is regionally dispersed;

• Using visa control to regulate total visitor arrivals; and,

• To pursue forms of tourism and discrete markets that are most sustainable.

Dave Cull (Mayor of Dunedin, President of Local Government New Zealand)Local Government Priorities - Dealing with Central Governmentotago.ac.nz/tourism-policy/dcull.docx

Among the key points mentioned was the need for governments to be aware and sensitive to local communities. Tourism should not be a burden to the local community. Therefore, governments must be sensitive to the capacity of tourist arrivals that local communities are able to absorb. The question of decision making was also raised. Who makes the decisions – the central government, the local government or both? A consistent national decision-making framework was suggested. However, it was mentioned that there should be room for flexibility as each destination is peculiar in its needs and challenges.

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Jason Krupp (Deputy Chief Executive Advocacy, Local Government New Zealand) Who pays for change; who pays for no change?

Emphasis was placed on the role of the central government in investing in infrastructures largely due to the fact that the central government gets the benefit from international tourist spend while local government pays for the infrastructural demands associated with tourism growth. Two main central government funding systems for dealing with this challenge are the Tourism Infrastructure Fund (TIF) and International Visitor Conservation and Tourism Levy (IVL). It was, however, noted that these funding systems, although good in themselves, are not enough to compensate for the infrastructural challenges associated with sustained tourism growth. An appeal was made to the government to invest more in tourism infrastructures across the regions. In addition to this, the government was also encouraged to determine the type of tourists they want – tourists that will provide optimum value for both the economy and the environment. Consistency and rational discussions between central government and local councils is also key to the success of a sustainable tourism growth.

Quinton Hall (CEO Ngāi Tahu Tourism)Indigenous Business Modelsotago.ac.nz/tourism-policy/qhall.pdf

The central importance of an inter-generational approach both for tourism and cultural sustainability was outlined and explained. In addition, it was suggested that the focus of tourism should not only be on the tourist but also on the people (i.e., the local communities). Looking after people emerged as a central theme of the presentation (e.g., paying staff the living wage); as was the important of kaitiakitanga (stewardship). Other major focus areas included:

• Sustainable business;

• Visible commitment to sustainable tourism growth;

• Focus on core strengths;

• Continuous improvement, investment and development;

• Preserving the Maori language;

• Community development; and,

• Investment in the people (e.g. through scholarships).

Roundtable 3: Opportunities for disruption

Speakers discussed the need for data in understanding, predicting and shaping future tourist flows. In addition, they discussed the need for consistent but flexible local council strategies that can be passed on from one government to the other, the importance of engaging non-tourism players, the need for the measurement of tourism spend against cost of impact and the need for alignment between central and local government. This roundtable discussion highlighted the need to take modest steps towards disruption in order to advance the sustainability interests of the tourism sector, as most widely defined.

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SUMMARY

There is a need for sustainable tourism growth. However, this comes in small pieces. Each tourism stakeholder playing their part eventually results in the big changes we desire. There is, therefore, a need to take a bold approach in addressing some of the challenges. In addition, the Tourism Policy School provides a platform through which the government, academia and tourism business operators connect, exchange ideas, and find solutions to imminent problems facing the tourism sector. There is a need to continually build better links between industry and academia, to deliver improved outcomes for tourism that benefit New Zealand and New Zealanders by combining our shared networks, knowledge and experience. The Tourism Policy School serves as an effective mechanism to advance this objective, which is more important than ever in times of global challenges and rapid change.

Emerging research agenda

The consistent message from presenters throughout the day was that there is a demand for evidence that can inform decision-making, policy and planning. The call for evidence-based decision making was expressed in association with various important avenues of research:

1. Understanding tourism value: Moving beyond volume to a detailed and critical understanding of value. Transparent data on the value of visitors (e.g., cruise passengers and other discrete markets). Understanding emerging high value tourism markets. Measuring tourism value (beyond visitor spend). Measuring the net value of tourism. How to boost long-term value (e.g., seasonal employment; critical skills gaps). What is the leakage of tourism income at different regional destinations?

2. Tourism labour productivitySome destinations have double New Zealand tourism worker productivity. What are the differences, are they systemic or can worker productivity be improved in New Zealand?

3. Building valuesVarious values are expressed within tourism, marketing and communication campaigns (e.g., The Tiaki promise, Tourism New Zealand campaigns, TIA Sustainability Commitment, Ngai Tahu values, and DOC campaigns). How do these fit together, and what role should values play in the industry? What values-based approaches work well (or not)? 

4. Urgent environmental sustainability challengesManaging tourism and conservation. Tourism and species protection. Industry sustainability leadership. Carbon policy impacts on the tourism industry. Pathways to decarbonisation. The impacts of climate change on tourists, visitor preferences, and visitor behaviour.

5. Social sustainabilityManaging the impacts of tourism on host communities. Responding to overtourism concerns. Local government funding deficit. Central government policy-tourism levy and tourism infrastructure fund.

6. Tourism industry structureTourism industry structure. Moving towards an integrated approach for domestic and international tourism following the Swiss Tourism model (rather than an atomistic private sector with no industry levy; overseas promotion by central government and domestic visitor promotion by local government). Central government systems to ensure that major mixed-use infrastructure decisions support sustainable tourism (e.g., airports, roads, ports).

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Tourism Policy School 2020

19-20 March 2020Topic: Decarbonising tourism

Acknowledgements:

The Directors of the inaugural Tourism Policy School (8-9 March 2019) acknowledge the support of the following organisations and individuals: Air New Zealand, Millennium Copthorne, Otago Business School, Richard Blaikie (DVC Research and Enterprise, University of Otago), Urs Eberhart (Swiss Tourism), Peter Harris (Queenstown Lakes District Council); Charlie Phillips (Queenstown Resort College), Laura Billyard (Events Coordinator), Jenna Anderson (Marketing Services), and Petra Dobesova (Event Manager, QRC). We also gratefully acknowledge the student helpers from QRC who assisted in the hosting of this event.

ISBN 978-0-473-48875-8