Booming Chinese visitor numbers present a huge opportunity to create new agritourism products and experiences, according to ANZ Bank.
Developing specialised NZ food retailers or combining agritourism with adventure activities are among a raft of suggestions in the bank’s bi-monthly Agri Focus publication.
The report, Tourism and its Connection to New Zealand’s Countryside, also suggests developing new products with the international tourist in mind, or making NZ-centric My Food Bag-style deliveries to tourists’ home countries.
The recommendations were made following an analysis of international visitor numbers that predict China will become NZ’s most valuable market within the next two years.
China to overtake Australia
At present, Australia tops total spend taking 25% due to the sheer number of arrivals. It is our largest source of international visitors at 41%. China is second in volume at 12% but clocks up 17% of total spending.
This translates into a Chinese visitor spend of $4,750 on average per person compared with our Tasman neighbours who spend $2,000.
It is this differential that will see China’s 17% of total spend overtake Australia within two years and propel it to $5.3bn by 2022, according to ANZ.
The bank also looked closely at what Chinese visitors spend their money on to reveal areas of improvement and opportunity for agritourism.
It found non-food and fuel retail sales make up the largest share of Chinese visitor spend at 35%, followed by 22% on accommodation.
It added that just 11% is being spent on food and beverage (F&B) services by this group – far less than visitors from other countries.
Finally, ANZ considered the growth of agri-related tourism, revealing a considerable increase in the past couple of years.
Of total visitors in the year to June 2016, 27% said that they had visited a farm or orchard, 20% visited a vineyard or wine-trail, and 11% attended a food or wine event. Back in the year to June 2010, these shares were just 3.6%, 11% and 0.4% respectively.
Interestingly, close to 65% of Chinese visitors said that they visited a farm or orchard in the year to June 2016, while visitors from the UK and US are much more likely to visit a vineyard or wine-trail or attend a food and/or wine event.
“This suggests segmentation and targeting of message and services to the different markets is just as important when consumers visit, as well as when selling a product in their home market,” the report states.
Challenges and opportunities
Based on this analysis, ANZ outlined both the challenge and the opportunity for the F&B and farming sectors.
If nothing is done the F&B sector will benefit from a forecast uplift in total visitor numbers but will get a smaller slice of the pie. However, the opportunity lay in extracting its share of the extra spend.
“Effective strategies should be implemented to either lift this area of spending by Chinese visitors, or look at alternative ways of leveraging or piggy-backing off the expected growth in Chinese visitor spend for the F&B sector.” The report added this shouldn’t come at the expense of other countries.
- Investigating the development of specialised stores or unique shopping experiences related to the NZ F&B sector questioning whether at present it is effectively tapping into the Chinese tourist retail spend.
For example, developing more speciality stores in high-volume tourism thoroughfares and areas that stock only uniquely NZ F&B products. This could be a range of products or a focus on specific categories such as dairy, meat, honey and seafood.
Equally, ANZ pointed to opportunities to give tourists a controlled experience of the entire process (growing, harvesting, processing etc) of specific foods and beverages that is then followed up with a shopping, dining or other event experience.
- The report highlighted the need to showcase and market NZ unique dishes but also emphasised it is not just about the one-off sale and products need to be available to purchase and take home or to be delivered.
An online presence was seen as a necessity given the way products are being marketed and sold.
ANZ gave the example of a tourist doing a wine tasting who currently can sign up to the winery’s online sale platforms to receive a case of product each year. A step further, the report said, would be wineries who offer a dining experience, with tourist being able to sign up to receive all the products available on the menu on a regular basis, including cooking instructions and demonstrations.
- The development of entirely new products with the international tourist specifically in mind or F&B joint ventures with high-end farm stays or eco-accommodation providers was also suggested.
- An opportunity to encourage or incentivise tour operators to include agritourism experiences within their packages as an “all NZ” experience was suggested as a possibility. Encouraged by the high number of Chinese tourists already visiting farms and orchards, including visits to these locations or vineyards and tasting rooms or developing dedicated farms for visits was seen as a growth area.
- Combining agritourism with an adventure activity is also highlighted as an area to exploit, especially considering the “natural fit” of the activities.
“There would seem to be increased opportunities for the agriside to tap into those attracted by adventure activities by offering bush treks, visiting of caves, horse riding, bike riding, hunting opportunities ad other such activities.”
This, alongside offering other services such as accommodation, allows new sources of income to be generated in certain situations.
More broadly, ANZ noted that creating lasting, authentic experiences based on Maori traditions or the great outdoors for example, help drive future product loyalty.
It suggested that some of the smaller regions may be better placed to highlight NZ’s unique primary produce doubling as a way to encourage travellers to broaden their travel beyond the traditional hotspots.
Click here to download the report.