to questionnaires meant working from small sub-samples in some ...... identified as being spent on hosting 'famils' and similar media promotional activities.
An Investigation into the Economic Impact of Tourism in the Rangitikei Region
Tracey Evans and Chris Ryan Department of Tourism Management The University of Waikato Private Bag 3105 Hamilton New Zealand
ii
Disclaimer of Liability
The authors of this report disclaims any liability from any losses or damages, which may be a result of using this report. Nor does The University of Waikato take any responsibility or accountability for the content of this report and disclaims any liability.
i
EXECUTIVE SUMMARY
Any survey of a rural tourism district like the Rangitikei where tourism is embedded within other economic activities like farming, and where the district is an intermediate point between other larger, more developed tourism destinations, poses problems. These include:
a)
while there is a distinct summer season for accommodation providers, this is less marked in other economic sectors affected by general tourism flows;
b)
businesses located on State Highway One derive benefits from flows of tourists who do not, however stay within the district, and
c)
many businesses affected by tourism do not necessarily perceive themselves as part of the tourism industry and therefore response rates to questionnaires meant working from small sub-samples in some instances.
Additionally, the remit was to assess tourism impacts arising from the attractions of the Rangitikei.
Therefore the researchers attempted to assess ‘value added’ by
tourism. This meant not including local usage made of retail outlets and assets like cafes, bars and restaurants that might otherwise be included as tourism or a tourism related activity.
The sample of businesses which generated the data used in the study accounted for 15 percent of all businesses in the Rangitikei, 20 percent of all targeted businesses, and between 15 to 33 percent of various sub-samples of tourism businesses.
The data sets were examined on the basis of best estimates due to some discrepancies within the dataset. These yielded the following results:
ii
Direct economic impacts - Tourist ‘added value’ expenditure is $7.4 million.
Indirect impacts - as measured by tourism related business spending in the local economy was $1.5 million.
Induced impacts - as measured by estimated employee expenditures in the local economy were $5.6 million.
Local employment - attributed to tourism businesses was approximately 180 full-time equivalent staff, but some seasonality exists.
The total net economic impact of the Rangitikei tourism industry was therefore estimated as being about $14.5 million. It was also estimated that direct and indirect revenues resulting from tourism operations in the Rangitikei was about $32 million – this latter figure including those operations that service traffic that passes through the region and utilising tourist assets outside of the region, and the indirect flows that arise from those revenues. The difference is largely accounted for by additional sales within cafes and restaurants, including those involved with coach traffic, additional garage sales, and the use of tourist assets by the local population. It must be stressed that this latter figure does not represent the true net added value of tourism to the local economy inasmuch as it includes substitution effects and derived demand effects.
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TABLE OF CONTENTS Liability Statement………………………………………………………
Page i
Executive Summary……………………………………………………..
ii
Table of Contents………………………………………………………..
iv
List of Figures…………………………………………………………...
vi
List of Tables……………………………………………………………
vi
INTRODUCTION………………………………………….
1
1.1
Problem Statement……………………………..
1
1.2
Purpose…………………………………………
1
1.3
Objectives………………………………………
1
1.4
Background……………………………………..
2
METHODOLOGY………………………………………….
3
Primary Research…………………………….....
3
2.1.1
Questionnaire Construction………...
3
Methodological Issues…………………………..
4
DATA ANAYLSIS AND FINDINGS………………………
9
Findings…………………………………………
9
Description of Sample………………
9
1.0
2.0
2.1
2.2
3.0
3.1
3.1.1
3.2
Direct Tourism Expenditures in the Rangitikei…
10
3.2.1
Accommodation Sector………………..
10
3.2.2
Cafes and Restaurant Sector……….......
11
3.2.3
Garage and Ancillary Services Sector…
13
3.2.4
Retail Sector……………………………
14
3.2.5
Tourist and Visitor Enterprises Sector….
16
3.2.5.1 Breakdown of Customer Origins…..
17
iv
3.3
Total direct impact of tourism expenditure………
18
3.4
Indirect economic impacts resulting from tourism.
19
3.4.1
Accountancy Sector………………….. 19
3.4.2
Banking and Financial Services Sector. 19
3.4.3
Construction, Decorating, Plumbing and Related Services Sector………….. 19
3.5
3.4.4
Professionals Sector………………….. 20
3.4.5
Indirect sector expenditure…………… 20
3.4.6
Employment patterns………………… 22
Additional evidence of the impact of tourism…….
23
3.5.1
Operating Hours……………………… 23
3.5.2
Turnover……………………………… 24
3.5.3
Advertising and Promotion…………… 25
3.5.4
Respondents views on tourism in the Rangitikei……………………… 28
4.0
CONCLUSIONS……………………………………………….……
31
Appendix A
……………………………………………… 34
Appendix B
……………..……………………………….. 37
Appendix C
…………………………………..………….
42
Appendix D
. …………………………………………….
44
v
LIST OF FIGURES Page Figure One:
The difference approach to estimating economic impact of tourism………………………………………
6
Figure Two:
Simple illustration of Input-Output matrix…………….
7
Figure Three:
Number of respondents by location within the Rangitikei………………………………………………
9
Figure Four:
Monthly pattern of Serviced accommodation………….
10
Figure Five:
Monthly turnover for Cafes and Restaurants…………..
12
Figure Six:
Service station, garage and breakdown sales…………..
13
Figure Seven:
Monthly retail sales in the Rangitikei………………….
15
Figure Eight:
Tourist attractions and activities total sales…………….
17
Figure Nine:
Opening Hours and days of Retailers…………………..
24
Figure Ten:
Turnover in relation to previous year…………………..
25
LIST OF TABLES Page Table One:
Estimated expenditure by the tourism industry on other economic sectors………………………………….
21
Table Two:
Domestic Media Effectiveness scores………………….
27
Table Three:
Indirect sectors – respondents’ views of tourism in the Rangitikei……………………………………………….
Table Four:
28
Direct sectors - respondents’ views of tourism in the Rangitikei……………………………………………….. 29
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1.0 INTRODUCTION
1.1
PROBLEM STATEMENT
Like any organisation Tourism Rangitikei requires specific valid market research. The reasons this market research has been required includes: 1) currently Tourism Rangitikei has to sustain and justify funding for tourism visitor information centres within the region; 2) to provide current market information, for now and the future; and 3) to analyse the economic impacts that tourism has on the region.
1.2
PURPOSE
The purpose of the research will justify funding for the support of tourism as a source of income creation and will highlight the impact that tourism has on businesses with the Rangitikei region. This investigated has been commissioned with the purpose of addressing the economic linkages between tourism and other industry sectors, and to assess the economic impact the tourism industry is having on the Rangitikei region.
1.3
OBJECTIVES
More specifically the main objectives for this research were to:
Assess the economic impact that tourism is having on the region
Identify economic linkages between tourism and other industry sectors
Ascertain businesses that are recipients of tourism expenditure (both direct and indirect)
Ascertain the views of local businesses on the effect that tourism has on their operations
1
1.4
BACKGROUND
The Rangitikei District is located at the heart of the North Island of New Zealand, where State Highway One provides a passage through the middle of the district. Despite the accessible location, the wonders of the Rangitikei are still often referred to as ‘New Zealand’s undiscovered secret’. The Region is part of New Zealand’s ‘River Region’, which also includes the Manawatu, Horowhenua and Wanganui regions.
For the purpose of this research the following towns in the Rangitikei (and surrounding areas) were surveyed through the research questionnaire; Marton, Ohingaiti, Mataroa, Mangaweka, Kimbolton, Turakina, Bulls, Taihape, Waituna West and Hunterville.
The Rangitikei Region:
2
2.0 METHODOLOGY
2.1
PRIMARY RESEARCH
The primary research for this investigation consisted of a questionnaire, which involved surveying different business sectors within the Rangitikei region.
2.1.1 Questionnaire Construction
Businesses were identified from the Rangitikei Business Database held by the Rangitikei District Council. The questionnaire was constructed to gather information about the business; its location in the Rangitikei area, turnover and employment figures, and how the business feels tourism benefits them from an economic and social perspective.
The design of the questionnaire was broken down into different types of business sectors, including: accommodation, accountants, banking, cafes and restaurants, construction, decorating, plumbing and related services, garage and ancillary services, professionals, retail, and tourist and visitor enterprises. See Appendix A. All businesses in the following economic sectors received a questionnaire and an explanatory letter and became the sectors upon which the research concentrated.
From these a number of economic sectors were excluded, for example, schools, counselling services, funeral directors and dentists. Some business sectors such as farm equipment suppliers failed to respond to any request for information. In other cases, like hairdressers, only one or two replies were received and thus were eliminated from the calculations.
3
2.2
Methodological Issues
It is usual to define a tourist or visitor, as someone who is away from home for over 24 hours and who therefore needs accommodation. Such accommodation need not be in the serviced sector as the definition includes those who travel away from home in order to stay with family and friends. However, the use of this definition in the Rangitikei would underestimate the nature of recreational activities linked to tourism in the Rangitikei because the district offers not only activities and attractions based upon a tourist demand but also meets the needs of day visitors from nearby centres of population like Wanganui and Palmerston North. It is, in the view of the authors, legitimate to include estimates of day visitor expenditure in any estimate of tourism impacts because: a)
Such day visitor expenditure represents revenue to local operators, who in turn spend such revenues within the local economy;
b)
Such day visitors would not visit the Rangitikei were it not for the existence of tourist attractions such as, for example, the numbers of gardens that exist.
2.2.1
Nonetheless, it is difficult to assess the nature of the impact of tourism
upon the Rangitikei District for a number of reasons, including:
a)
While there is a distinct summer season for accommodation providers, this is less marked in other economic sectors affected by general tourism flows;
b)
Businesses located on State Highway One derive benefits from flows of tourists who do not, however stay within the district;
c)
Many businesses affected by tourism do not necessarily perceive themselves as part of the tourism industry and therefore response rates to questionnaires meant working from small sub-samples in some instances.
2.2.2
The implications of these reasons for assessing the economic impacts of
tourism can easily be demonstrated. The main method used to estimate the economic impacts from tourism on the local economy was through a survey of local businesses.
4
However, those businesses that derive indirect benefits from tourism pose problems for analysis. Examples of issues considered include: a)
One method of calculating economic impacts would be to compare high season revenues with low season revenues. It can be argued that the low or off-peak tourism season revenue represents the basic level of demand due to local domestic demand. Therefore during peak tourist seasons the impact of tourism upon the local economy is the difference between total annual revenues and an aggregation of the mean monthly revenues attributed to local demand.
However for a number of businesses located along State Highway One a secondary ‘blip’ in off-season tourist demand exists. This is arguably due to increased traffic flow from the south from tourists passing through the district on their way to the North Island ski-fields. Thus, for example, some difference was discernable in monthly patterns of some businesses in Taihape due to this effect that did not exist for similar businesses in other locations like Marton (not located on State Highway One).
b)
Some businesses not directly involved with tourism may derive monies from tourism businesses in the off-peak tourism season. For example firms associated with activities like plastering, decorating and construction may receive a demand from the serviced accommodation season during the off-peak tourism demand.
2.2.3
Such factors have an impact on the main mode of analysis adopted for this
report. This was the difference approach referred to above, and its logic is described in Figure one.
Figure one shows a hypothetical flow of revenues received by
businesses in a region. The total revenues received are $202,500. However it can be seen that off-season revenues are approximately $15,000 per month. This spending is attributed to local, domestic, non-tourism demand. Multiplying this figure by 12 produces annual revenue of $180,000. The economic impact therefore attributed to tourism is $202,500 less $180,000, namely $22,500, or 11.1 percent of the local revenues flowing through the district’s economy.
5
Figure One: The Difference Approach to Estimating Economic Impacts of Tourism
25000 20000 15000 10000 5000 0 Jl y Au g Se pt O ct N ov D ec
Total Revenue
Ja n Fe b M ar Ap l M ay Ju n
Revenue
Monthly Total Tourism Revenue
Month
2.2.4
For the reasons indicated above, modifications had to be made to this
approach. For example it was important to clearly distinguish between not only types of businesses, but the locations of businesses. One issue was whether to include businesses that while within the tourism sector were primarily associated with passing through coach borne traffic. However this issue was settled in that some of the major enterprises specifically meeting this type of demand did not return completed questionnaires. This must be taken into consideration when interpreting the results as it means this report may under-estimate total tourism impacts upon the Rangitikei as far as indirect impacts are concerned. The validity of any calculations depends upon at least two factors; 1) the size of sample and 2) the nature of the sample. The sample varies from 15 to 33 percent of the identified target populations when classified by industry type and location. The sample was not entirely representative as some key concerns did not respond, but a decision was made to exclude some from the results. The commission received was to assess the impact of the Rangitikei tourism industry, and this was interpreted as meaning that industry which attracted visitors to the Rangitikei. So, for example, businesses that specifically catered for a passing coach borne traffic that stop in the Rangitikei, but which do not generate overnight stays were not included in the analysis.
6
2.2.5
Within the sub-samples it is thought that respondents were generally
typical of their type. However, another limitation is that some sections of the industry are embedded in other economic sectors, for example, farming, and thus it is difficult to disentangle the cost structures from the parent business. Indeed for tax reasons the tourism business might be included within the earnings of the parent business.
2.2.6
On the whole, the tourism businesses in the Rangitikei, like most other
businesses other than agriculture, tend to be small and local in nature. Nonetheless, a growing number of international visitors mean that tourism in the Rangitikei is one of a small number of exporting business sectors.
2.2.7
Finally, it should be noted that the area studied was defined as that which
is covered by the Rangitikei District Council. Tourist flows do not recognise administrative local council regions, and one implication of this is that a number of tourism enterprises that impact upon the Rangitikei economy will have been omitted from the study. Examples would include farmstays around Mangaweka and flows related to the Wanganui and Ruahepu regions.
2.2.8
It might be argued that if in the case of the Rangitikei, the approach posed
some problems, why not adopt a different method of assessment? A conventional approach in calculating the economic impacts of tourism is to utilise an input-output approach wherein the relationships between economic sectors of the economy are mapped out through the patterns of trade relationships that exist between them. This is usually represented in the form of a matrix.
To illustrate the principle a very simplified model is shown in Figure Two. Figure Two: Simple Illustration of Input-Output Matrix Accommodation Garages Accommodation Garages Food Stores Farms Total
300 0 80 0 380
700 100 400 800 2000
Food Stores 12000 800 100 1200 14100
Farms
Total
2000 15000 100 1000 10000 10580 1000 3000 13100 29580
7
What Figure Two shows is that, for example, Food Stores spend $80 on accommodation services, $400 with garages, $100 between Food Stores and $10,000 on farm products for a total expenditure of $10,580. The matrix can be converted into a series of coefficients, for example of total Food Store expenditure, 94.5 percent (0.945) is spent on farm produce. It now becomes possible to estimate the flows through the local economy of any external increase in expenditures. In this example, if there was an increase in tourist expenditure of $100 on foods sold through food stores, then the indirect impact of this additional expenditure is not solely the initial $100, but of this, farms would now receive and extra revenue of $94.50. It is this form of modelling that lies behind the calculation of multipliers and the recently introduced Tourism Satellite Accounts where tourism related industries are introduced as an economic sector within the economy.
Nonetheless this simple example shows that considerable amounts of data are required for this approach to be adopted. Two immediate problems present themselves for any calculation of tourism impacts on the Rangitikei economy. First, data of this detail are not made available by Statistics New Zealand, and second, no surveys of visitor expenditures specific to the Rangitikei exist.
2.2.9
However, as a check on data, the questionnaire did adopt this approach in
part. Rather than adopt the method used by PriceWaterHouseCooper in the Northland study where respondents were asked to complete a very detailed list of expenditures, the approach adopted by Tourism Waikato was followed whereby respondents were asked to identify for themselves their major areas of business expenditure and how much they spent on those areas on an annual basis. One reason for adopting this latter method is that it permits simpler questionnaires to be adopted with a view to increasing the response rate.
8
3.0 DATA ANALYSIS AND FINDINGS
The first stage of the analysis was to collate all surveys and code the results from respondents. The coded data was entered into and analysed using Microsoft Excel and SPSS programmes.
3.1
FINDINGS
3.1.1 Description of Sample
Of the 295 businesses surveyed, 54 questionnaires were sent back completed, thus giving an overall response rate of 18 percent.
Figure Three shows were those
respondents were located, within the Rangitikei region.
It indicates that a large
amount of respondents came from Marton (35 percent), Taihape (28 percent) and Hunterville area (11 percent), with smaller amounts responding from surrounding areas.
Figure Three: Number of respondents by location within the Rangitikei
20 15 10
Hunterville
Taihape
Bulls
Turakina
Kimbolton
Mangaweka
Mataroa
0
Ohingaiti
5
Marton
No. of Respondents
Number of Respondents by Location
Location
9
3.2 Direct Tourism Expenditures in the Rangitikei 3.2.1 Accommodation Sector
The Business Directory lists 13 Holiday Accommodation Businesses (these include farmstay operations), Three Holiday Parks and Seven Motels in the Rangitikei. These were all combined into one serviced accommodation sector and the estimated annual turnover for this sector was $504,400. Respondents for the accommodation sector generally came from the Taihape, Marton and Mangaweka areas, and either ran a Bed and Breakfast (B&B)/ Farmstay or Motels.
For purposes of estimating the economic impact of tourism on the Rangitikei, all revenue received by the serviced accommodation sector is attributed to the tourism sector.
Figure Four: Monthly Pattern of Serviced Accommodation
Serviced Accommodation Sector 120000 100000 80000 60000 40000 20000 0
Revenue
Jan Feb Mar Apl May Jun
Jly
Aug Sept Oct Nov Dec
As shown in Figure four the data shows that there is a distinctive seasonal pattern of business emerging within the five months November to March, accounting for 63 percent of total turnover. 10
Three quarters of the respondents indicated that they had experienced an increase in turnover since last year. It was indicated that this turnover had increased between two and four percent since the previous year.
3.2.2 Cafes and Restaurant Sector
Respondents for this sector generally came from Taihape, Marton and the Mangaweka areas. When looking at the pattern of business generated by cafes and restaurants in the Rangitikei a slightly different picture begins to emerge. Nineteen cafes and restaurants were identified by the Rangitikei Business Database and in addition 12 takeaway businesses, including a McDonald’s restaurant. The data for takeaways is far from complete and did not include information from operations that would be expected to account for a significant proportion of this sectors turnover.
The
estimates for this part of the industry can only be regarded as ‘suspect’ and must be treated with a high degree of caution. A monthly analysis for takeaways is therefore not provided. The total turnover for the café and restaurant sector (less the takeaway sector) was estimated as being $10,659,000.
3.2.2.1
Cafes and restaurants are obviously frequented by both the local people,
as well as by visitors to the area and therefore not all the turnover from this sector can be attributed to tourism. Figure Five implies that about $650,000 per month appears to be a minimum turnover that is being achieved by this sector. If this is thought to represent the level of demand generated by local people, then this would represent a total local demand worth $7.8 million. It could also be argued that some of the summer business gained by cafes and restaurants is also attributable to local demand. One way to allow for this is to weight some of the summer peak season additional revenue towards local demand, and a weighting factor of 10 percent was used.
11
Figure Five: Monthly turnover for Cafes and Restaurants
Cafes and Restaurants 1400000 1200000 1000000 800000 600000 400000 200000 0
ec D
ct
ov N
O
g
y
pt Se
Au
Jl
n Ju
ay
l
M
Ap
ar M
b Fe
Ja
n
Revenue
The end calculation was that $2,573,100 (that is 24 percent of all turnover) is attributable to tourism.
3.2.2.2
It must be emphasised however that this mean for the Rangitikei hides
significant amounts of variance.
For example, it was evident that the café and
restaurant sector outlets in Taihape in particular had strongly marked differences in patterns of trade when compared to other areas in the district. This ‘flatter’ annual monthly pattern of restaurant trade for many parts of the Rangitikei is reflected in Figure Four by the pattern of sustained trade throughout the period of October to April, only beginning to fall when the shorter days of winter begin to impact. Additionally too, there was evidence of shorter opening hours existing during the winter months, with a number of cafes and restaurants closing on Sundays. 3.2.2.3
Figure five also illustrates a distinctive seasonal trend, and also indicates
that there is an increase in turnover during the winter month of July. Reasons for this may include that the month of July coincides with the New Zealand school holidays and the beginning of the North Island skiing season. This would indicate that travellers are stopping through the district on their way to Mount Ruapehu, or other popular travelling spots. (The July impact of the ski-season/school holiday period is also discernable.)
12
3.2.2.4
As already noted the dataset for takeaway operations if far from complete
and thus is difficult to estimate. The figure of $1 million within this sector that is attributable to tourism is an assumption, and thus must be treated with great caution.
3.3.3 Garage and Ancillary Services Sector
With significant flows of traffic passing through the district on State Highway One between Bulls and Taihape it was thought important to include sales by garages within the dataset. A total of 23 service stations, garage and motor repairs and breakdown services were identified and all were sent a questionnaire. Just under half responded to the questionnaire, and respondents came from across all regions of the Rangitikei, and mainly undertook business styles of petrol, workshops, car sales, breakdown services, and panel beating and spray painting. However, significantly garages based in Taihape and Bulls were under-represented in the sample, and it is thought that this may explain a lack of a July winter ‘upsurge’ to reflect the skiseason, as is demonstrated in Figure Six.
Figure Six: Service station, garage and break down sales. Garage and Ancillary Services 500000 400000 300000 Sales 200000 100000
3.3.3.1
ov N
Se pt
Jl y
M ay
M ar
Ja n
0
Nonetheless it can be seen that the summer, tourist months represent an
increase in sales compared to the off-peak season. Again, allowing for some of the summer increase in demand to be due to a greater propensity of local residents to also increase their travel and hence demand for car related products and services. It was estimated that out of regional tourist demand accounted for about $514,000
13
expenditure for the services of this sector. This represents about 14 percent of the sales from garages, service stations and breakdown services.
3.3.3.2
Trading for this sector varied greatly with the earliest establishment
opening in 1965, with a larger percentage opening between 1979 and 1996 and one business opening in 2001. Operating hours were generally seven days a week, and were between nine and 10 hours a day, with some respondents choosing to stay open longer hours on Friday.
3.3.3.3
Majority of respondents indicated that turnover stayed at the previous
level since last year, with two indicating an increase of 10 percent and a one a decrease of 20 percent. Respondents were asked to indicate where they thought most of their tourist business came from, either to tourist business and operators or directly to visitors to the region. Sales directly to visitors were indicated to have more of a profit than selling to tourist businesses and operators (three percent to operators and eight percent to visitors), hence indicating little tourism impact on this sector.
3.3.4 Retail Sector
In addition to expenditure on accommodation, food and activities a major recipient of tourism expenditure tends to be the retail sector. Indeed in some studies it has been shown that as much as 60 percent of tourist expenditure is based on shopping. Therefore an attempt was made to assess the impact of tourism on the retail sector in the Rangitikei. The Rangitikei does possess some retail outlets that are specifically related to tourist traffic, from ski-gear hire stores to shops selling ceramics, pottery and arts and crafts to visitors.
Additionally though visitors will buy everyday
requirements such as food and newspapers from local stores when staying in the area, especially if self catering.
3.3.4.1
A total of 20 varying retail outlets responded to the questionnaire and
came from the towns of Marton, Ohingaiti, Mataroa, Turakina, Bulls, Taihape and Hunterville. It is estimated that these respondents formed about one-fifth of the number of retail outlets not already included in the previous sub-samples. This subsample therefore includes a range of various types of outlets including liquor stores, 14
pharmacies, grocers, hairdressers and the like as well as gift shops. Main respondents indicated the following business styles: Antiques, clothing, dairy/grocer, gifts, plants and gardens and books and stationary.
3.3.4.2
Initially it was thought that the difference method between off and on
peak season sales could be used to estimate the value of additional business that tourism brought to the retail sector of the Rangitikei. However, as seen in Figure seven, it appeared that the level of retail sales in the Rangitikei tended to be fairly constant throughout the whole year (respondents indicated that hours of opening was generally 12 to 13 hours, and was not effected by the tourism season, with a majority of the retailers still closing on Sunday’s, off and on peak), and while there is a summer peak in December, much of the increase in retail sales in that month are more likely to be associated with Christmas shopping by local residents rather than being caused by tourism patterns and flows. In addition there could also be a slight impact from family and friends that travel to the region for the Christmas season, which can be reinforced through the increase of numbers and turnover in December for the accommodation sector.
Figure Seven: Monthly Retail Sales in the Rangitikei
Retail Sales 6000000 5000000 4000000 3000000 2000000 1000000 0
3.3.4.3
y Au g Se p O ct N ov D ec
Jl
n Ju
Ja
n Fe b M ar Ap l M ay
Retail Sales
In consequence, to estimate direct tourism sales upon the retail sector of
the Rangitikei required an examination of the nature of the sample data and identifying those most related to tourism, and, as indicated below, undertaking an estimate of indirect impacts. Adopting a conservative approach to the calculations, it
15
was estimated that the direct impact of tourist shopping in the general retail sector accounted for about $1.3 million.
3.3.4.4
There was a general increase in turnover for retailers from the previous
year. This ranged from a 0.5 percent increase through to a 60 percent increase. Six respondents indicated that they had a decrease in turnover.
3.3.5 Tourist and Visitor Enterprises Sector
While the Rangitikei may benefit from traffic though its area generated by tourism within and around its region, its main business as a tourist destination must be generated through its own tourist attractions and enterprises. This sector involved looking at attractions and activities in the Rangitikei region. Six adventure operators and eight gardens were among the tourist attractions and enterprises that were identified from not only the Rangitikei Business Database but also other sources including the internet and brochures picked up from Visitor Information Centres. Among other operators were; guided fishing tours and activities associated with farm stay operations. However, the data associated with these last were incorporated in the accommodation data as there was no way of separating the datasets.
3.3.5.1
Respondents generally came from the Taihape and Kimbolton regions,
and involved activities and attractions such as rafting and gardens.
Again the
revenues associated with these businesses can be included in their entirety as an economic impact upon the Rangitikei. The estimated total sales accruing to this sector was estimated as being $2,531,000.
Figure eight shows the seasonality
associated with these sectors sales.
16
Figure Six: Tourist Attractions and Activities Total Sales
Tourist Attractions and Activities 400000 300000 200000
Revenue
100000
3.3.5.2
Jl y Au g Se p O ct N ov D ec
Ja
n Fe b M ar Ap l M ay Ju n
0
Turnover indicates that there is a strong tourism impact on the businesses,
with the busiest months being October through to March. The highest turnover month is during January, which does not coincide with the highest accommodation turnover (which is December); reasons for this may include day trips from major centres such as Palmerston North, and stopovers from tour operators such as Kiwi Experience, who are just engaging in the activity.
3.3.5.3
Tourist enterprises indicated that they all had an increase in turnover since
the previous year. This increase ranged from 10 percent through to 20 percent increases. These businesses have been operating for a varied amount of time, starting in 1958, through to opening in 1982. Opening hours were seven days a week with mean hours from 10 to 13 per day. Hours were not altered for the tourism season, and sometimes depended on bookings and consumer demand.
3.3.5.4
Breakdown of customer origins
Generally visitors to the tourist enterprises business sector came from districts surrounding the Rangitikei region (Ruapehu, Wanganui, Manawatu, Horowhenua, Wairarapa and Wellington), with smaller numbers coming from Auckland, Waikato and Nelson. One gardening business indicated that 96 percent of business came from national visitors, with small numbers coming from Australia and Japan, compared to
17
one adventure company that indicated that most of their business came from international visitors (90 percent), and only 10 percent from national visitors. International visitor origins generally were from the United Kingdom and Ireland and other European countries, with smaller numbers coming form Australia, Japan, Germany and the United States of America, with the mean number of travellers to these businesses being around 6500 per year.
3.4 Total Direct Impact of Tourist Expenditure
It can be concluded that the direct tourism expenditure in the Rangitikei comprises:
Business Sector
Dollars ($)
Accommodation
504,400
Cafes and Restaurants
2,573,000
Garage and Ancillary
514,000
Retail
1,300,000
Tourist and visitor enterprises
2531000
Total
7,422,400
To this might be added a further million dollars in takeaway food sales, but as previously noted this is very much more an assumption rather than a survey based estimate. It must be emphasised that the total of $7.4 million has been based upon very conservative modes of estimation, but the total represents the small number of accommodation units in the Rangitikei and the comparative shortage of high priced tourist attractions in the district. Apart from some adventure operations many of the other attractions like the gardens have comparatively modest entry fees, being geared to domestic markets that cannot afford high prices rather than targeted at international visitors.
3.4.1
However, direct impacts do not measure the total impact of tourism. The
receipts earned by tourism businesses in the Rangitikei are subsequently spent in the district on other services such as those offered by the professional sector like accountancy and legal services, while employees of tourism businesses will also tend
18
to spend most of their earnings in the Rangitikei region. Consequently an attempt was made to estimate the nature of these expenditure flows.
3.5 Indirect economic impacts resulting from tourism It is felt that the following business sectors are seen as having an indirect impact from tourism; Accountants, Banking and Financial, Construction, Decorating, Plumbing and Related Services, Professionals, and the Garage and Ancillary Services sector. In many cases these sectors were unaware that they have an indirect impact from tourism (thinking that they have no economic benefit).
3.5.1 Accountancy Sector
A survey of accountancy services within the Rangitikei obtained a 33 percent response rate. From this it was estimated that tourism businesses generated a total of about $45,900 for this sector of the district’s economy. No significant differences between the respondents from accountancy firms were noted. There was also no impact on the opening hours of these businesses during the tourism season.
3.5.2 Banking and Financial Services Sector Like accountancy firms a lot of information was withheld due to the large role that head offices play.
Opening hours stayed constant throughout the year, with no
increase or impact with the tourism months.
3.5.3 Construction, Decorating, Plumbing and Related Services Sector
These respondents gave minimal turnover information, which caused difficulty to analyse whether they are impacted by the tourist season. Percentage figures indicated that a majority of the businesses turnover had either stayed constant since last year or had a slight increase of around three to 10 percent.
Respondents indicated a mean
score of 0.71 when asked what percentage of their business is undertaken by those in the tourist industry. This indicates that respondents felt that a very small amount of business is done by tourist operators, thus minimal benefits for this sector.
19
Due to insufficient data from this sector, the best estimate that could be permitted indicated that tourism businesses accounted for about $100,000 of their business, although this would vary from year to year, and is admittedly an estimate.
3.5.4 Professional Sector
Professional businesses included those undertaking, legal services, physiotherapy and real estate agencies. These businesses began trading in 1985 through to 1996 and 1998, with operating hours not being effected by the tourism season. Hours of operation were six days a week, with an average opening of six hours. Due to the wide range of business types in this category, turnover varied greatly, with some indicating that turnover had decreased by 19 percent since last year, with others indicating no change to an increase of around 10 percent. This sector indicated no impact from the tourism industry.
3.5.5 Indirect Sector Expenditure
A major source of data for this study for tracing the indirect impacts of tourism within the Rangitikei came from significant questions that were presented to businesses, through the desired questionnaire.
Businesses were asked to identify the major
classifications of their own expenditure. Table One indicates the key findings. From these findings it was possible to indicate where the indirect impacts of tourism were being spent. Table One: Estimated Expenditure by the Tourism Industry on other Economic Sectors Sector
Expenditure ($)
Sector
Expenditure ($)
Supermarkets
556,000
Petrol purchases
61,000
Liquor purchases
333,000
Printing services
77,000 38,000
Butchery purchases
34,000
Cleaning materials
Accountancy
55,000
Council rates
145,000
Wholesalers
28,000
Telecom
125,000
Equipment hire
76,000
Electricity
100,000
20
Bank fees
24,000
Vehicle maint.
22,000
Postal services
50,000
Travel services
5,000
General repairs
15,000
Photographic work
50,000
Stationery supplies Commissions
Hardware
13,000
Plumbing
144,000 213,000 6,000
Appendix D further illustrates where some sectors are spending.
3.5.5.1
It must be noted that some discrepancies within the data exist.
Accountancy services datasets between estimated expenditure by tourism enterprises and estimated revenue derived by accountants from industry clients vary by about $5,000. More seriously, estimated expenditure by the industry on elements relating to general repairs, plumbing and associated activities falls significantly below the estimated $100,000 derived from the builders, construction sector. Re-examing the dataset indicated an over-reliance on one major contractor who estimated that 10 percent of their revenue was derived from the tourism industry. If this respondent is excluded then the discrepancy may be less.
Additionally, any major one off
construction by a tourism operator within the last 12 months would have created a bias within the data. In as much as the tourism businesses were responding to a question about operating costs as distinct from capital costs, it was thought more appropriate to retain the $100,000 estimate from the builder’s survey as being more appropriate as including both operating and capital costs.
3.5.5.2
By simply using rounded estimates, it is thought that the indirect
economic impact of the Rangitikei tourism businesses was worth around $2.6 million. However, an important caution to note is that not all of this money is retained by the local economy. For example, of the petrol purchases it is obvious that much of this expenditure then flows outside of the local economy, and the economic benefit retained by the district is to be seen through the employment that is created within local petrol stations and gross profits made by the concerned service stations. Other complicating factors also exist with reference to commissions being paid. Some of these monies will relate to payments to Visitor Information Centres and others in the tourism distribution chains that are located outside of the local economy. However,
21
without detailed examination of the cost structures of other businesses it is not possible to be precise about the indirect added value created by the tourism industry in the Rangitikei. If, however, it is argued that wage costs account for about 50 percent of business costs, and a gross profit of 10 percent is assumed, then indirect added value of the tourism industry might be said to be $1.5 million.
3.5.6 Employment patterns
Levels of employment in the serviced accommodation sector appeared to be fairly constant throughout the year and seemed to primarily comprise of management and immediate family members. The numbers of additional employees seemed to be few in number and the number of full-time staff in the identified accommodation suppliers was estimated as being about 50 in number. In addition to this number there was evidence of additional part-time employment during the peak periods of the tourism season and the number of full-time equivalent (FTEs) staff being employed was estimated as being about 60 during the main season.
3.5.6.1
Cafes and restaurants on the other hand were more significant employers
of labour and about 190 full-time staff were identified with an additional estimate of 50 FTEs part-time staff being employed.
A distinct seasonal pattern emerged,
indicating the importance of tourism to this sector of the Rangitikei economy, and about 15 percent additional staff were appointed during the high season. Given that only part of the turnover of this sector is being attributed to tourism flows, then using the same assumptions as before, it can be said that tourism was directly responsible for about 50 FTEs in this economic sector.
3.5.6.2
The pattern of employment in the tourism sector itself reflected the same
pattern as within the serviced accommodation sector in that the numbers of full-time staff being employed remained fairly constant throughout the year.
This again
represents the family nature of many of the enterprises throughout the district. There was some evidence of a seasonal pattern of part-time employment being offered, but it was not as great as what had been predicted.
It was estimated that this sector
accounted for about 55 FTEs, but it is difficult to be precise about this sector because of the informal nature of many of the working relationships that include family 22
members and volunteers, some of whom might also be occupied within the agricultural sector (as their main source of income).
3.5.6.3
Given, as already noted, that the tourism industry also has an indirect
economic impact on the turnover of retailers and other industries in the district, an estimate was made of the number of jobs in these economic sectors that could be attributed to tourism. For the retail sector it was estimated that in total tourism could account directly for about 17 FTEs, in the building and construction industries, very conservatively about 5 FTEs could be attributed to tourism, while in the garage and ancillary sector about two such jobs could be attributed to tourism.
3.5.6.4
In short about 180 FTEs were attributed to tourism.
If, for sake of
argument, an average of $15 per hour was earnt by these employees, this would imply a total wages cost of about $5.6 million dollars being paid by the Rangitikei tourism industry, much of which, can be assumed, is being spent within the local economy.
3.6 Additional evidence of the Impact of Tourism 3.6.1 Operating Hours
One simple means of assessing whether tourism is having an impact upon local economies is to evaluate the hours of operation (hours of opening for business/trading) during the different months of the years. Figure nine charts the difference in daily numbers of operating hours for which businesses were open. For this sample retail outlets were used to provide this information. It can be clearly seen that these businesses tended to remain open for longer hours during the main tourism season than during the off-peak season, with Saturday for example showing an increase in trading hours. Overall it might be said that the tourism season accounted for a six percent increase in trading hours, with a large amount of businesses still choosing to limit hours on Sundays. A lesser increase in trading hours of about two to three percent was found to exist for the service stations.
23
Figure Nine: Opening Hours and Days of Retailers
Operating days and hours
Daily hours
200 150 Out seas In Season
100 50 0 Sun
Mon
Tues
Wed Thurs
Fri
Sat
Days of the week
3.6.2 Turnover
Another area that can indicate if tourism has had an impact on the region is through turnover figures.
Through the questionnaire respondents were asked to indicate
whether their turnover had an increase, decrease or stayed constant since the last economic year. The results are shown below in Figure ten.
Figure Ten: Turnover in Relation to Previous Year
Turnover in Relation to Previous Year 13%
Same as Last Year 52% 35%
Up on Last Year Down on Last Year
24
3.6.2.1
Results indicated that over half of the respondents experienced a turnover
that was constant with their previous year’s figure, while 35 percent of respondents indicated that they had experienced an increase of turnover since the previous year. These increases ranged greatly with one respondent indicating an increase of 0.55 percent, with another indicating an increase of 60 percent.
3.6.2.2
These figures can indicate that there has been economic growth in the
region, which can also possibly be associated with increases in the tourist industry in the region, and hence increased tourist numbers. However only about a third of the responded businesses in the region indicated and experienced the benefits of these increased visitors and turnover.
3.6.3 Advertising and promotion by the Rangitikei Tourism Industry
Details and assessments of advertising was provided by a small sub sample that represented about one-third of the tourism enterprises in the Rangitikei, and thus the sample data was multiplied by three to represent the total levels of expenditure. Little direct spending on international tourism promotion was found to exist (See Appendix B). For example none of the sample spent directly in buying promotional spaces in Tourism New Zealand’s overseas publications.
A small amount was spent on
Tourism Rangitikei tourism publications that were thought to be used in overseas promotions but all together only about $9000 was identified in this particular area of advertising.
Those International Promotion methods used by businesses in the
Rangitikei include; Tourism Rangitikei publications, Magazine advertising, International media hosting, video clips and other types of promotions (specifically not noted). On the other hand respondents indicated a total spend of about $9,000 on advertising in the Rangitikei Tourism brochure and a not dissimilar amount was identified as being spent on hosting ‘famils’ and similar media promotional activities. 3.6.3.1
A greater effort went into spending on New Zealand based promotional
books, brochures and other media. Almost $40,000 was stated to have been allocated to newspaper advertising, $7,500 for magazine advertising and $5,000 on radio advertising. The usual guides like Jasons featured strongly, with $12,000 spent on advertising in the AA guide, $7,000 in various bed and breakfast guides, and $6,000
25
in Jasons’ various guides.
The importance of the internet is indicated in that
respondents specified an industry spend of $27,000 on internet advertising and related services.
Nonetheless separate business brochures remained the major basis of
promotional effort with over $33,000 being spent on these.
Other domestic
marketing efforts included Product Manuals, Rangitikei Regional brochure, Conference and events planners, Photo CD Rom, and Touring Maps
3.6.3.2
Respondents were asked to assess the effectiveness of their advertising
effort using a seven-point scale where one indicated no impact at all and seven represented the highest score. Table two shows the scores for the media effectiveness with reference to domestic tourism. Very few cited international tourism promotional material, and thus these scores have not been included.
Table Two – Media Effectiveness Scores for Domestic Tourism Media
Score
Newspapers
2.7
Magazines
2.8
Radio
2.5
AA Guide
4.3
Bed and Breakfast Guides
4.6
Jasons
4.0
Web sites
3.1
Brochures
3.7
Famils' (media hosting)
4.8
Rangitikei brochure
4.0
Other methods used included; New Zealand Trade shows, Links to other websites, Road signage, Newsletters, Giveaways, Video clips and Posters.
3.6.3.3
The above scores are notable for being in the mid-range and evidence
exists that the main source of promotion effectiveness is simply ‘word of mouth’. A majority of respondents indicated minimal scores for all marketing efforts, feeling that they have minimal effects for their business. If resource capacity is low and the business has a significantly long enough history to have built up both a record and 26
customer database, then for an individual business, low promotional budgets may in the short to medium term, make sense. However, in the longer term it will mean an ever increasing dependence upon the loyalty of past customers. An inability to attract new customers in changing markets, and even for existing customers, a loss of clear brand image may appear when any one business is compared to others. One of the purposes of advertising is brand and market share defensiveness as well as acquisition of new markets. At the very least there should continue to be advertising of the ‘Rangitikei brand’ to ensure the wider market and the industry itself that the district is vibrant over time – letting others discover New Zealand’s undiscovered secret. 3.6.4 Respondents’ Views on Tourism’s Economic Benefits on the Rangitikei
Those business sectors that had an indirect, or small direct impact from tourism were asked to evaluate to what extent they believed tourism was benefiting the Rangitikei region and their business from an economic perspective, and also if tourism was benefiting the region, their business from a social perspective and other perspectives. A seven-point scale ranging from one to seven was used, with one being that it has no impact at all, to seven that indicates that it has a very strong and significant impact.
3.6.4.1
Table three illustrates a summary of how respondents felt about the
surveyed question and tourism in the Rangitikei. See Appendix C for individual sectors views. Table Three: Indirect sectors – Respondents’ views of tourism in the Rangitikei To what extent do you believe: Tourism is benefiting the Rangitikei from an economic perspective Tourism is benefiting the Rangitikei from other perspectives Tourism is benefiting me from an economic perspective Tourism is benefiting me from a social perspective
Mean Scale 3.52 2.97 1.63 2
From the above table it is evident that those sectors that have minimal impact and/or indirect impacts feel that tourism has little value from any perspective. Some petrol
27
stations however indicated that a lot of their business relied on through traffic of travellers. However this did not benefit other areas of their business, such as the workshop (which is utilised by rural farmers), which bought the mean scale down of those indirect sectors.
4.6.4.2
This can then be compared with those sectors that have a direct impact
with the tourism industry. The retail sector has been used to illustrate direct impacts. Those respondents from the retail sector indicated higher mean scores (than those indirect sectors), which emphasises that they have more of a benefit from the tourism sector. Table Four: Direct tourism sectors – Respondents’ views of tourism in the Rangitikei To what extent do you believe: Tourism is benefiting the Rangitikei from an economic perspective Tourism is benefiting the Rangitikei from other perspectives Tourism is benefiting retail services in the Rangitikei Tourism is benefiting me from an economic perspective Tourism is benefiting me from a social perspective
Mean Scale 4.36 4.50 4.36 3.11 3.29
Retail respondents believed that tourism was playing some role in benefiting the Rangitikei region and retail services in the region, with a mean score of 4.36, however respondents indicated that there was more of a benefit from other perspectives (not indicated). Retailers also felt that tourism was not benefiting them personally from a social or economic perspective.
3.6.4.3
The individual scores from the responded retailer’s ranged greatly with
some indicated that tourism was important, compared to some who believed that it had no impact at all. Some businesses recognised the ‘trickle down’ and flow on effects that tourism does for their business, “the more tourists into our region the more money in their pockets to pay their bills. Trickle down effect works on this region, as it works in the New Zealand economy, and is very important to everyone”. Due to the large range of businesses in the retail sector, it is evident that some businesses will
28
find tourism to have more of an impact than on others. For example a clothing store found tourism to be greatly beneficial for retail services, and a pharmacy found there to be little impact to the business.
3.6.4.4
Generally a large percentage of respondents, from all sectors, indicated
that tourism was highly important to New Zealand, and the Rangitikei region could benefit greatly from this.
Many expressed their concerns for more working
relationships between businesses, which can strengthen the region, and the limited amount of tourism related promotion for the region. Another respondent indicated that the increase in tourism related activities has helped the declining population in the region. Respondents’ views indicated the following as areas of improvement for tourism in the Rangitikei:
Increase promotion – further develop the regions image
Increased investment
Improve town facilities e.g. toilets
Try to maintain benefits within the region
Council involvement – area coordinator
However such comments were not sustained in detail
29
4.0 CONCLUSIONS
4.1
It can be stated that the economic impact of tourism in the Rangitikei region is
through: Direct economic impacts - Tourist ‘added value’ expenditure, $7.4 million.
Indirect impacts - as measured by tourism related business spending in the local economy, $1.5 million.
Induced impacts - as measured by estimated employee expenditures in the local economy, $5.6 million.
Local employment - attributed to tourism businesses was approximately 180 fulltime equivalent staff, with some seasonality existing.
Therefore the total economic impact to the Rangitikei region from the tourism industry was estimated as being around $14.5 million. However these figures are to be regarded as ‘best estimates’ given the nature of the assumptions that were previously made. These assumptions include:
An exclusion of local demand for cafes and restaurants
An exclusion of some tourism assets directed at certain types of passing through tourist traffic, and
4.2
The use of simple assumptions for the assessment of employee income.
The evidence also seems to imply that levels of profitability are not great,
although specific questions aimed at profitability were only minimally assessed. Large assessments were not included in the study, on the grounds that it would reduce the response rate further. It is suggested that given high levels of proprietor managed businesses, ‘profits’ are being subsumed into wage costs.
Additionally some
businesses are closely associated with other economic activities and thereby shared
30
cost functions might exist, making it difficult to clearly define costs attributed to one or other business even if revenues are clearly separate.
4.3
It is the researcher’s understanding that this is the first attempt to assess the
economic impact of tourism in the Rangitikei. Past experience indicates that first attempts are often bedevilled by various problems, one of which is the comparatively low response rate that can occur. Hence some debate about the accuracy of the data occurs.
Subsequent surveys then gain significantly in accuracy as potential
respondents become more aware of the importance of replying to requests for information. The above estimates remain just that, ‘best estimates’ given the data that existed. The researchers have tended to the cautious and conservative side as there seems little point in over-estimating economic implications that mislead. What does emerge however is that the comparatively small accommodation base within the district does negatively impact upon the local economy. However, this apparent lack can be tackled in various ways, from encouraging new accommodation providers to an extension of existing accommodation.
The relationship between type of
accommodation and product integrity needs to be examined. For example eco-lodges might better fit the brand of Rangitikei tourism than standard motel accommodation, but given the high flow of traffic on State Highway One, further motel accommodation might be considered. Again though, a balance between individual entrepreneur’s interests and the interests of the wider district need to be considered.
4.4
Finally, one way of looking at the impact of tourism within the Rangitikei is to
compare the value being added to the local economy divided by the number of households. It is understood that there are about 16,000 people living in the district. If this is correct then it means tourism is generating about $906 per person extra to the local economy.
31
6.0
APPENDICES
Appendix Title
Page
A
Copy of Questionnaire……………………………………….
34
B
Marketing and Promotional efforts in the Rangitikei…………
38
C
Respondents views on tourism………………………………..
42
D
Purchases and Spending – Sectors directly involved with tourism…………………………………………………… 44
32
Appendix A: Copy of Questionnaire RANGITIKEI TOURISM ECONOMIC CONTRIBUTION SURVEY May 2001 This questionnaire is being distributed to all retail and ancillary service activities throughout the Rangitikei region. The purpose of the project is to obtain information that will better enable Tourism Rangitikei and Rangitikei District Council to better understand the nature of linkages between tourism and the visitor industry with other sectors of the local economy.
Additionally, any growth in tourism produces a
subsequent demand for retail and other services from enterprises in tourism. We would very much appreciate your help and support with this survey. The more who participate, the more valuable and accurate will be the information.
Your responses to this survey will be kept strictly confidential. You are asked to directly post the completed questionnaire to the University of Waikato as a further means of ensuring confidentiality. A pre-paid envelope is enclosed for your use. No other person will see individual replies.
1). Please circle the area in which your business is located or closest to:
Marton
Mangaweka
Ohingaiti Kimbolton Mataroa
Bulls Tutira
Taihape
Hunterville
Waituna West
Turakina
2). Please describe the main type of retail or other service that you provide (e.g. diary, supermarket, gifts etc). ___________________________ 3). what are your regular hours of operations? Outside the tourist season? During the tourist season? (That is from May to September) (That is, from September to April of the following year)
33
Sunday ___________________________ Sunday ___________________ Monday ___________________________ Monday ___________________ Tuesday ___________________________ Tuesday ___________________ Wednesday_________________________ Wednesday_________________ Thursday_________________________
Thursday___________________
Friday _________________________
Friday_____________________
Saturday _________________________
Saturday___________________
4). When did your business first start trading?
(Please state the year).
____________________________________________________________ 5). Please fill in the table below showing your approximate turnover before tax and number of staff employed for the past 12 months. (Full-time equivalent staff (FTE) are based on the total number of hours worked by all part-time staff per week, divided by 40). Turnover Before Number of Full Number of Part Tax Time Staff Time Staff Employed Employed (FTE equivalent) January 2000 February 2000 March 2000 April 2000 May 2000 June 2000 July 2000 August 2000 September 2000 October 2000 November 2000 December 2000
6). Compared to the previous year, by what percentage is your annual turnover? Up compared with last year
___ or
Down compared with last year
___
34
7).What percentage of your sales do you think are to tourist businesses ______ %
8). what percentage of your sales do you think are to visitors to the region ____%
9). if you employ additional staff during the tourist season are these: (Please tick all those boxes which apply). Local people Students whose family are residents in your area Students from outside the area Others outside the area 10) And how many volunteer staff, if any, work for your business? ______________________________ 11). Using the following scale where Has a very significant impact 7 Has no impact at all 1 I have no opinion 0 To what extent do you believe: Tourism is generally benefiting the Rangitikei from an economic perspective
1 2 3 4 56 7
0
Tourism is generally benefiting the Rangitikei from other perspectives
1 2 3 4 56 7
0
Tourism is generally benefiting retail services in the Rangitikei.
1 2 3 4 56 7
0
Tourism is generally benefiting me from an economic perspective
1 2 3 4 56 7
0
Tourism is generally benefiting me from a social Perspective
1 2 3 4 56 7
0
35
Please use this space for any comments you may wish to make on how important you feel tourism to be to New Zealand, the Rangitikei and/or to yourself.
Please use the enclosed envelope – there is no need to pay postage.
THANK YOU FOR YOUR HELP
36
Appendix B: Marketing and Promotional efforts in the Rangitikei
Accommodation Advertising and Effectiveness Ratings The following table indicates the main method of national promotion used by the respondents, the mean amount spent on each promotion and how effective the respondent felt about the promotion method. The effectiveness scale starts at 1 (Not at all effective/ waste of money) through to 7 (Very Effective/ high response rate). Method of Promotion Newspaper Magazine AA Guide B and B Guide Jasons Guide Other Websites Links to other websites NZ Trade shows Brochure Development Brochure Distribution costs Brochure Display fees (visitor centres) Road Signage Newsletter Customer Giveaways Video Clips
Dollars Spent (mean) 200 510 1480 625 690 1100 600 180 350 600
Effectiveness
370 100 590 200
International Promotion Method of Promotion Dollars spent per annum Tourism NZ publications Tourism Rangitikei publications Magazine advertising 500 International Media Hosting Off-shore tradeshows Video clips Other 2500
Effectiveness
2.5
6
37
Domestic Marketing Method of Promotion
Mean dollars spent per Effectiveness annum Product Manuel 350 2 Rangitikei Regional brochure 255 2.5 Free of Charge (media 800 4 hosting) From this table it is evident that the respondents do not utilise domestic marketing. The most common method is through the Rangitikei regional brochure; however respondents feel that this has minimal effectiveness.
Cafes Advertising and Effectiveness Ratings The following table indicates the main method of national promotion used by the respondents, the mean amount spent on each promotion and how effective the respondent felt about the promotion method. The effectiveness scale starts at 1 (Not at all effective/ waste of money) through to 7 (Very Effective/ high response rate).
Method of Promotion
Dollars Spent per annum Effectiveness (mean) 500 166 116 83 66 116
Newspaper Radio AA Guide B and B Guide Jasons Guide Websites Links to other websites Brochure Development 1017 Brochure Distribution 83 costs International Promotion
None of the main methods were used, indicating that they were not appropriate to their businesses. On Café used coffee promotions and found these to be highly effective.
38
Domestic Marketing Method of Promotion Conference and Events Planner Rangitikei Regional brochure Photo CD-Rom Other
Dollars spent per annum 500
Effectiveness 4
500 250
4 4 7
Tourist and Visitor Enterprises Advertising and Effectiveness Ratings The following table indicates the main method of national promotion used by the respondents, the mean amount spent on each promotion and how effective the respondent felt about the promotion method. The effectiveness scale starts at 1 (Not at all effective/ waste of money) through to 7 (Very Effective/ high response rate).
Method of Promotion Newspaper Magazine Radio AA Guide B and B Guide Jasons Guide Other Websites Links to other websites NZ Trade shows Brochure Development Brochure Distribution costs Brochure Display fees (visitor centres) Other macrogroup activities Road Signage Posters Newsletter Customer Giveaways Photography Video Clips
Dollars Spent (mean) 6000 1500 1200 1000
Effectiveness 4.5 6 4 5
400
4
1500 350
3.33 2.5
2567 650
5.33 5
237.5
3.5
500
3
50 2000 6250 5000 600 1000
6 4 5 6 5 5
International Promotion Method of Promotion
Mean dollars spent per Effectiveness annum
Tourism NZ publications Tourism Rangitikei 367
2.67
39
publications Magazine advertising International Media 550 Hosting Off-shore tradeshows Video clips 1000 Other 17000
3.5
5 5
Domestic Marketing Method of Promotion
Mean dollars spent per Effectiveness annum
Product Manuel Rangitikei Regional brochure 334 Free of Charge (media 500 hosting) Touring Maps 100
2.67 3 4
40
Appendix C: Respondents’ views on tourism Accounting Tourism Benefits To what extent do you believe: Tourism is benefiting the Rangitikei from an economic perspective Tourism is benefiting the Rangitikei from other perspectives Tourism is benefiting accountancy services in the Rangitikei Tourism is benefiting me from an economic perspective Tourism is benefiting me from a social perspective
Mean Scale 3.5 2 1.5 1.5 1.5
Mean scores illustrate that accountancy firms believe that tourism has no impact on the Rangitikei region and their business, or on themselves.
Banking Tourism Benefits This category felt that tourism played some role in benefiting the Rangitikei region economically, with a mean score of 4.75. However low mean scores indicated that they felt tourism was not benefiting them socially of economically, of even services like theirs. To what extent do you believe: Tourism is benefiting the Rangitikei from an economic perspective Tourism is benefiting the Rangitikei from other perspectives Tourism is benefiting services like mine in the Rangitikei Tourism is benefiting me from an economic perspective Tourism is benefiting me from a social perspective
Mean Scale 4.75 4.5 2.67 1.5 3.33
Construction Tourism Benefits To what extent do you believe: Tourism is benefiting the Rangitikei from an economic perspective Tourism is benefiting the Rangitikei from other perspectives Tourism is benefiting car and garage
Mean Scale 2.07 1.83 1.84
41
services in the Rangitikei Tourism is benefiting me from an 1.55 economic perspective Tourism is benefiting me from a social 1.9 perspective Garage and Ancillary Tourism Benefits To what extent do you believe: Tourism is benefiting the Rangitikei from an economic perspective Tourism is benefiting the Rangitikei from other perspectives Tourism is benefiting construction and related services in the Rangitikei Tourism is benefiting me from an economic perspective Tourism is benefiting me from a social perspective
Mean Scale 3.60 3.20 2.50 1.60 1.60
Professional Tourism Benefits To what extent do you believe: Tourism is benefiting the Rangitikei from an economic perspective Tourism is benefiting the Rangitikei from other perspectives Tourism is benefiting services like mine in the Rangitikei Tourism is benefiting me from an economic perspective Tourism is benefiting me from a social perspective
Mean Scale 3.67 3.33 1.33 2 1.67
Professional Services believe that tourism is making a small economic contribution to the Rangitikei region, and other similar services.
42
Appendix D: Purchases and Spending – Sectors directly involved with tourism Accommodation Purchases Respondents were asked to identify types of suppliers they use in their day-to-day operations, and also to indicate the value of these purchases over 12 months.
Item / Supplier Supermarket Petrol Liquor Printer Cleaners Council – Rates Telephone Electricity Bank Vehicle Expenses Accountant Stationary Meat products Hardware Plumber
Mean amount spent 8000 2500 2500 400 5800 2100 3900 3850 1525 1500 1700 1800 5000 500 400
Cafes and Restaurant Purchases Item / Supplier Supermarket Petrol Liquor Wholesale goods Small goods Council – Rates Repairs Electricity Bank Vehicle and Travel Expenses Uniforms Administration Butcher Equipment
Mean amount spent 101400 2650 44000 15200 7800 5252 20000 15305 5581 2000 2600 15286 3120 2897
The Cafes and Restaurants always purchases their milk, meat, vegetables and dairy products from wholesalers rather than purchasing through farmers.
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Tourist and Visitor Enterprises Purchases Respondents were asked to identify the main types of suppliers that they use in their day-to-day operations, and also to indicate the value of these purchases over 12 months.
Item / Supplier Supermarket Petrol Liquor Printer Butcher Other Telephone Hireage Equipment Treks Wholesale Spinning Mill Accountant Stationary and Postage Photos Commission
Mean amount spent 41769 8000 94000 12534 500 10150 13000 12600 170 45000 1667 80000 4234 10000 39424 71045
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