Islands Business - Interview: TONY EVERITT, SPTO CEO

Chinese Market and regional brand key to tourism growth

Duncan Wilson

Tony Everitt...“The reputation of the South Pacific globally is in good shape and the Pacific has continued to be viewed as an idyllic dream destination.”

South Pacific Tourism Organisation is targetting China’s travelling elite as the organisation aims for an annual US$2 billion industry by 2010.

New chief executive Tony Everitt says these sophisticated and worldly Chinese are willing to travel longer distances and spend more for unique experiences.

“Out of the 1.4 billion Chinese, we probably want to talk with less than a million individuals, so it’s a very fine percentage and a fine target market,” Everitt says.

This emphasis mirrors the organisation’s shift in focus from the number of annual visitors to dollars spent in the region.

“The bulk of visitor tours—one night in a hotel and then home again—are not really what the Pacific is into. Our research shows that if our clients can stay longer, it gives them the opportunity to learn about the local culture and enjoy many other opportunities.

“These clients are willing to pay more, which means that businesses here can be more profitable long-term and the visitors themselves will also return home more satisfied.”

This approach will rely on a reinvigorated regional South Pacific brand, cost-effective internet and direct-marketing programmes.

This South Pacific brand is an umbrella marketing tool for the region—“a rifle shot between the eyes,” in Everitt’s words—crucial to identifying the area to potential visitors.

In China, this is promoted by boutique travel agencies, a Chinese-language internet portal and direct electronic marketing.

“The sophisticated top-of-the-development pyramid Chinese visitors that we are after will go to an experienced and specialist travel agent when planning their holiday. This agency is small, it perhaps costs a little more and it retains consultants with travel and cultural experience of niche markets such as the South Pacific,” Everitt says.

The South Pacific Tourism Organisation (SPTO) has recently launched a Chinese language version of their tourism website, which enables that tech-savvy Chinese visitor or travel agent to plot their holidays (www.spto.cn)

Since last November, the South Pacific’s sole Chinese language travel portal has also developed an electronic direct marketing programme and database of Chinese travel agents and journalists with an interest in the region.
Everitt says the South Pacific’s efforts are not hampered by lack of resources: “The notion that you need to spend millions of dollars to create a global brand is history. For very little money—the website, the electronic marketing programme—we can leverage conventional media.

“For example, we are now facilitating a visit of China’s top glossy travel magazine to the region and that contact came through our database. This shows how we can obtain very, very significant and targeted exposure in the Chinese market without spending one cent on advertising.”

Everitt also maintains that South Pacific tourism is not restricted by the lack of direct air routes from China, especially as the region targets the more experienced travellers.

There are several ports which Chinese visitors use to access the region—Korea, Japan, Australia and New Zealand—although Everitt anticipates direct air links to develop over time.

But he points out that Chinese visitors to New Zealand, which numbered 100,000 in 2006, lacked a direct air service until November last year.

In this spirit, Everitt also identifies India as a target market (along with an emerging traveller class in Brazil and Russia), though he says development may be a few years away.

SPTO’s approach, as in China, would rely on strong regional South Pacific branding, selective demographic targets, along with specific markets and service development within the Pacific Islands.

Excerpts of interview:
Tourism brought US$1.5 billion to the region in 2004, but more than 2/3 of that goes to just three countries—Fiji, Tahiti (French Polynesia) and New Caledonia. Is this a concern and what will you do to develop tourism in other Pacific countries?

“That’s a very relevant question and concern. The needs of some of these destinations that are just starting in tourism are quite different to the needs of some of the more experienced players. Essentially, our work with areas that are new to tourism such as Tuvalu, Niue, and Kiribati, is very much about assisting them develop skills and capabilities as well as developing country-specific tourism strategies which identify particular strengths and weaknesses. With the more established destinations, we work differently, we tend to work with them in the marketing area and to support their efforts in the long-haul markets of Europe, Asia and North America. The newer destinations are quite air route dependent and Australia and New Zealand provide immediate opportunities for these destinations.”

Australasian visitors account for about 80% of the South Pacific’s tourists. What is your role in increasing visitors from other countries, especially from North America and Europe?

“This high proportion of Australasian visitors is not an ideally sustainable business portfolio, as much as we appreciate those visitors and want those numbers to continue. If something were to happen to those economies, such as a rapid depreciation of currency, that would create risks. We’re working with the industry to balance that portfolio a little, particularly by developing some of the very large North Pacific Rim market—the US, Japan, China and even India potentially along with Brazil and Russia—and building on the historical market in Europe.”

Why would Brazil and Russia be markets of interest to the Pacific?

“Russia is enjoying a lot of economic growth. Russian people are starting to travel, including long-haul, which brings us within their scope. It’s fair to say that the numbers are quite small at this stage, but Russia is a large country. Brazil has potential for similar reasons. And the BRICS [Brazil, Russia, India, China] are all in the top eight countries of the world and their combined population is three billion. China is the most immediate opportunity out of those four BRIC countries. India would be the second priority, although our work in that area is mostly research-based at this stage, and of course, we would love to work on Russia and Brazil but it’s going to depend on resources. And in terms of India, we understand that a couple of airlines relevant to the Pacific, Air New Zealand and Air Pacific, have on order the Boeing 787, the Dreamliner, an elite long-haul aircraft. Air New Zealand for example, has noted that it gives them the capacity to fly non-stop from India to New Zealand. They take delivery of that aircraft about 2010, and Air Pacific a few months afterwards. Technology is helping the Pacific in so many ways, not only in communication and marketing, but also with improvements in aviation technology as well. This will enable longer and longer flying times and bring some very, very big markets within in range of the South Pacific.”

What sort of tourist experiences do these emerging markets favour and what are you doing to encourage these services?

“There is a market for classic resort-style accommodation that caters to the family vacation from say, Australia and New Zealand. That is always going to be a market which needs products. But we need to develop new products; that is a very, very important part of our market portfolio. Ecotourism, nature and culture-based tourism, is a great opportunity to provide experiences that are not just about viewer relaxation and recharging, though that is of course also very valuable. In terms of developing ecotourism, one thing we are developing is a concept we’re calling the ‘green hub’. This will be a collection of resources to assist ecotourism development, including research, case studies, consumer studies, and so forth. This would be available to businesses here that want to incorporate some ecotourism element, so they can easily and quickly access relevant information and make that venture seem a little less daunting.”

South Pacific Tourism is also pushing for a focus on visitor spending, rather than visitor numbers—how will you do this?

“There are a number of strategies. The first one is targeting. In any country, you will find some people who are experienced travellers and you will also find people at the other end of the spectrum that are taking their first holiday. The South Pacific is a niche destination, only 1.2 million international visitors, half of what New Zealand gets, so our target needs to be on that experienced traveller. I’ve already mentioned our target market for China, which numbers about one million high-end, sophisticated, experienced travellers. We will work with travel agents who cater to this sector. Education within the industry is crucial as well, assisting our businesses to understand the reasons for this targeting and prevent the marketing from becoming shotgun. Standards and services on offer are also important. We need to develop an understanding that quality is important and work on improving that quality of the visitor experience. That’s largely about training and skills development and we have a constant stream of programmes in that area.”

Is instability in the region a significant problem for the tourist industry?

“No, the reputation of the South Pacific globally is in good shape. Having been in South East Asia, China, Japan, and the United States over the last few months as part of my own research, I can say that our reputation is very, very high and the Pacific has continued to be viewed as an idyllic dream destination where the people are friendly and it’s just a very, very relaxing, charming place to visit that is remote from the problems of the world.
“Any instability in recent times and its potential effects on tourism need to be put in the global context. If we look at the events of the last 12 months or so in North America, Europe or Asia, there’s been SARS, tsunami, violence.
“On my recent trips to other countries, I’ve seen that people are not perturbed by some of the things that have happened here over the last few months. In global terms, the South Pacific is still seen as a fantastic place to visit. The assets that are available to us here—the destinations, the environment, the cultures and the people—are fantastic and highly sought-after.”

And it is these assets that will be highlighted with the new regional brand for the South Pacific?

“Yes. This umbrella brand for the region will be the rifle shot between the eyes that catches the attention of people far away. Those two words ‘South Pacific’ are actually magic words. It’s an existing, classic brand that is three centuries old and started with Cook and D’Urville.
“This brand will highlight the region to visitors far away, and the appeal and attractions of the area as a whole. It will work in tandem with country-specific campaigns.
“It is this brand and targeted, researched campaigns in specific markets, supported with quality products, that could ensure our target by 2010 of an annual US$2 billion tourist spend.
“Two billion US dollars in the South Pacific context is a lot of money, and this is where we are getting excited because I believe we have, as an industry, the greatest sustainable growth potential and we are already the largest industry in the region. This target for South Pacific tourism, if it’s done in a proper and planned way, is achievable and will be of huge benefit to the region.”