Week 5 – Private Sector as Tourism Stakeholder (TOUR101)

Lecture Objectives

• Identify the private sector’s “stake” in Aotearoa New Zealand tourism and highlight key complexities
• Distinguish between sectors and subsectors of the tourism industry
• Illustrate private-sector distinctions with NZ examples
• Introduce Case Study Report (Tarras Airport)
• Hear guest lecture (Bruce Bassett, Chief Adviser Policy & Strategy, TIA)

Tourism System Context

• Tourism flows between three regions
– Tourist-Generating Region (origin; demand, money, bookings)
– Transit Route Region (transport corridors; economic, socio-cultural, physical linkages)
– Tourist Destination Region (supply; experiences consumed, information returned)
• Linkage dimensions:
– Economic
– Physical/Environmental
– Socio-Cultural

Stakeholder Framework (High-Level)

• Public sector
• Private sector
• Third sector (non-profits, NGOs)
• Employers & Employees
• Tourists
• Host Community

Private Sector in Tourism – Definition & Significance

• Synonymous with the “tourism industry”
• Leiper (2000:306) definition: “collections of business firms, organisations and resources which foster/support tourist activity, particularly by providing services”
• Predominantly located in the destination region, yet profits may flow out (e.g., foreign ownership)

Complexities of the Private Sector

• Spatial: mainly at destination but marketing often needs international reach
• Ownership spectrum
– Locally owned ⟶ Regionally ⟶ National chains ⟶ Transnational corporations
• Size spectrum
– One-person micro-ventures ⟶ SMEs ⟶ large multinationals
• Mixed management models (e.g., locally managed franchise of a foreign chain)

Ownership × Size Matrix (condensed)

• Local, small, owner-operator (e.g., Seal Coast Safaris)
• Regional SME (e.g., Weta Workshop Tours)
• National chain (e.g., Bluebridge Ferries)
• Foreign-owned transnational (e.g., Sofitel/Accor Hotels, Emirates airline)

Roles of the Private Sector

• Provide majority of tourism “products” (goods + services)
• Act as development agent – introduce tourism to new or economically depressed regions
• Create employment at multiple skill levels
• Shape tourist demand geographically and product-specifically through innovation & marketing

Interests & Concerns of Private Firms

• Business viability – often sole income source
• Resource protection – must not degrade attractions they depend on (beaches, rivers, heritage, culture)
• Need marketing support from public sector (esp. for international reach)
• Need publicly funded research (Tourism Dashboard) for strategy & HR planning

Special Nature of Tourism Products

• Require consumer to travel to the product
• Key characteristics:
– Intangible
– Uncertain purchase (cannot be sampled)
– Perishable (cannot be stored)
– Experiential (creates satisfaction rather than ownership)

Direct vs Indirect Providers

• Direct/Core sectors (produce the tourist experience)
– Transport
– Accommodation
– Attractions
– Tour operators
– Hospitality (restaurants, cafés)
– Travel agents, destination organisations
• Indirect/Supporting industries
– Support services (construction, cleaning, insurance, petrol stations, agriculture)
– Developmental orgs (financial institutions, industry training organisations)
– Public services that become tourism-relevant (utilities, education, health, police)

Key Subsectors with NZ Examples

Transport (commercial only)

• Water: Cruise ships, Ferries (Bluebridge Cook Strait), water taxis, charters
• Land: Rail, rental cars, coaches, campervans, bicycles
• Air: Scheduled airlines (Emirates CHC-EDI route), charter flights

Accommodation (commercial only)

• Hotels (Sofitel Wellington)
• Motels
• B&Bs / Home-stays / Farm-stays
• Backpacker hostels
• Cruise-ship cabins

Attractions

• Natural: Zealandia ecosanctuary, beaches, mountains, glaciers
• Human-made (purpose-built): Te Papa National Museum, Weta Workshop, theme parks, casinos
• Human-made (non-purpose): monuments, religious buildings, castles, battlefields
• Events/Festivals: sports events, music & arts festivals

NZ Product Snapshots Shown in Lecture

• Te Papa Tongarewa – free for NZ residents, fee for internationals
• Zealandia Te Māra a Tāne – 2023 NZ Tourism Awards Supreme Winner
• Weta Workshop Tours – “Discover imaginary worlds”
• Seal Coast Safaris – coastal wildlife experience
• Bluebridge Ferries – Cook Strait crossings (one-way or return)
• Sofitel Wellington – luxury accommodation
• Ortega Fish Shack – restaurant philosophy “love of food, wine, good times”
• Hays Travel – example of travel agency platform
• Emirates – global airline connecting NZ

Case Study Report (Assessment)

• Due: Friday 19\,\text{Sep}, 4 pm (online via Nuku)
• Length: 2000\ \text{words} \pm 10\% (references excluded)
• Weight: 40\% of final course grade
• Topic: Apply stakeholder framework to proposed Tarras (Central Otago) Airport
– Analyse diversity of perspectives (public, private, third sector, community, tourists)
– Conclude with clear recommendation (+ rationale) on whether airport should proceed
• Preparation timeline
– Weeks 5–9: stakeholder theory exploration
– Week 7 tutorial: report guidelines
– Week 9 tutorial: support session

Background: Tarras / Central Otago Airport Proposal

• Announced July 2020 by Christchurch International Airport Ltd (CIAL)
• Ownership of CIAL: 75\% Christchurch City Council, 25\% central government
• Land acquired: 750\,\text{ha} at State Highway 8 × 8A intersection
• Rationale: capacity limits at Wānaka & Queenstown Airports; needs to handle wide-bodied jets
• Controversies: environmental impact, community consent, regional development trade-offs

Stakeholder Framework Example – “Hilton on Queen’s Wharf” (Wellington)

• Proposal: \$45\text{m} five-star, 142-room hotel
• Public Sector
– Support: Mayor, Greater Wellington Regional Council
– Against: Environment Court (ultimately denied)
• Private Sector
– Support: developer, tourism businesses, airport execs
– Against: nearby property owners, InterContinental hotel (competitor)
• Tourists
– Luxury segment mostly supportive (more choice)
• Host Community
– Opposition from local groups & city councillors
– Some community members support due to tourism jobs/economy
• Third Sector
– Mostly opposed; concerns about heritage, recreation space, environment
• Final decision (Environment Court): project denied – too big, restricted public access, traffic issues, inconsistent with sustainable use of resources

Ethical, Philosophical & Practical Implications Discussed

• Balancing economic development with heritage conservation & environmental stewardship
• Equity of access – public spaces vs private profit (e.g., wharf case)
• Local vs foreign profit repatriation
• Long-term sustainability: need to safeguard beaches, rivers, cultural sites from degradation
• Public-private collaboration on research & marketing to ensure informed, sustainable growth

What’s Next in Course

• Week 6: Next stakeholder focus – Public Sector, with guest Dale Elvy (MBIE)
• Continue building stakeholder analysis skills toward final report