Working Internationally

Most businesses will start their promotions within New Zealand, and some then move to a more international focus as their product develops.

Working in the international environment offers you a lot of benefits but will come at a cost. If successful, it is a great way to ensure visitors come throughout the year and to increase your visitor numbers.

To work within an international distribution chain does not mean that you have to travel offshore. Inbound operators (IBO) have established relationships within our major international markets and work on behalf of the operators to sell New Zealand itineraries in wholesaler brochures. Working with an IBO can save you time, money and headaches!

A key thing to remember is that there is a cost to working within the international marketplace and distribution channels. Operators must include commission in their pricing structures if they want to work successfully in the international marketplace.

The following are just some of the criteria you’ll need to meet before you start promoting your product internationally.

• Is your product well accepted in New Zealand?

• Have you got a clearly identified target market?

• Do you have a website?

• Do you have 24-hour phone and email servicing?

• Have you got your pricing structures finalised, and commission rates agreed?

• Do you have a plan for the growth of your business ie. increasing facilities, staffing etc.

• Do you have a full range of marketing materials?

• Are you working with your local RTO and i-SITE?

• Do you have the appropriate health and safety standards in place?

• Has your business been quality assessed by an independent third party quality rating system, for example Qualmark?

International Travel Distribution

One of the trickiest aspects of selling your product offshore is negotiating the international travel distribution process. Travel distribution is slightly different in each country, but the product development pages in our Market Guide section will be of use to you in understanding these flows.

Different products will suit different booking methods. Some may use all steps in the distribution chain while others bypass one or more of the links. It is important to identify the most cost-effective and appropriate distribution method for your business.

There are a number of ways for customers to buy your tourism product. Some are direct - over the phone or internet; others are indirect - through a third party, who may be in New Zealand or overseas.

The traditional channels in the distribution process are retail travel agents, wholesalers, inbound tour operators and booking agents. With traditional channels, bookings are usually made in advance and paid for by the agent after the visit.

Traditional distribution channels involve a cost to the operators called a commission - this should be factored into your pricing.

Different Elements of the Distribution Channel

Inbound tour operators (IBOs)

Inbound tour operators are based in New Zealand. They are responsible for preparing itineraries and booking the ground arrangements on behalf of internationally based wholesalers.

Travel wholesalers

Wholesalers provide retail travel agents with brochured travel packages, usually offering transport, accommodation and activities. Most wholesalers are based offshore. Some own retail agencies or sell directly to the public.

Retail travel agents

Selling directly to the public, retail travel agents will either use product offered by a wholesaler or deal directly with the product supplier - especially for short break holidays.

Visitor Information Network/booking agents

The Visitor Information Network of i-SITE Visitor Centres handles bookings around New Zealand. Many regions also have other independent booking agents. Each will often offer brochure display space at a cost.

Brochures

Brochures are a key tool used for tourism products. They are particularly used by booking agents, inbound tour operators, retail travel agents and wholesalers. They are also used in direct mail campaigns.

Guidebooks

National and regional guidebooks may be used as references by wholesalers, inbound tour operators and retail agents. Independent travellers use them to plan their own holidays. Guidebook writers usually travel incognito to ensure they are treated like ordinary holidaymakers.

Internet

The internet has become one of the most comprehensive and easily accessed sources of destination information. Internationally, travellers are becoming increasingly comfortable making bookings online.

Commissions

Each sector of the distribution channel receives a commission payment at the rate you have negotiated with them.

Levels of commission may vary, but a general guide to rates is:

• Retail travel agent/visitor centres - retailers who sell directly to the customer - 10%.

• Wholesalers - who sell to retailers, who then sell on to customers - 20%.

• Inbound tour operators - who sell to wholesalers - 25%.

Although commission rates for wholesalers and inbound operators are higher, these selling channels are likely to get your product placed in brochures and databases with long-term benefits in terms of sales outcomes.

Creating a Distribution Plan

You should not attempt to engage with all elements of the distribution channel, and some will be more appropriate for certain products than others.

For example, a B&B in rural New Zealand may find the best way to sell to international visitors is once they are in New Zealand. The best distribution methods in this case are local guidebooks, i-SITE Visitor Centres and brochure displays.

On the other hand some large New Zealand suppliers may sell most of their products offshore. For this reason, they may find it useful to appoint a sales agent in an offshore market to call on wholesalers and agents and undertake sales campaigns on their behalf.

When looking at your distribution plan, consider:

• What distribution channels do your customers use to purchase product?

• Do your customers purchase your product while in New Zealand or before they arrive?

• What distributors are likely to sell and promote your product?

Packaging Products

To sell your products in the international marketplace they need to be visible - and the best way to do this is to get featured in offshore brochures.

However, international trade generally will not feature lower-priced products as the commission rates generated are not high enough.

Occasionally wholesalers will feature products in return for a ‘production fee’. Another way to get into brochures is to combine your product with others to form a package or cluster or marketing group to create a product with a higher dollar value (and subsequently a higher return for the agent).

Combining products to form a package allows customers to enjoy a range of experiences with minimum effort
on their part.

What to consider:

• Combining with other product suppliers. Before you team up with other suppliers, check out their products thoroughly. You need to be confident that their quality and professionalism are similar to yours.

• Sales and marketing. Once you have developed your package it should be marketed in its own right. The operators involved should share the cost of developing promotional material.

• Bookings and administration. It’s best that one business be responsible for all the bookings and financial processing for the package. They will need to be responsible for sharing earnings from the package to the other operators involved - at previously agreed levels.

• Pricing. As with a stand-alone product, pricing should be agreed for a 12-18 month period.

• Product development. Expect it to take at least two years to establish your package internationally. Assign one person to be the front-person for the package to save confusion.

• Legalities. It’s a good idea to draw up a legal agreement between the companies involved in the package.

Working smart internationally

Working with international trade can be challenging. In order to make the most of your time with international travel trade it’s important to understand the business protocol and practices of the market you are working in.

International business protocol

The following are some general guidelines on working internationally.

• Avoid discussing political issues.

• Offering business cards or food and drink with both hands is generally considered to be polite.

• Do not touch anyone’s head, as it is considered a sacred part of the body in some countries.

• Do not be overly aggressive promoting your business; many cultures do not favour such behaviour.

• Do not point your foot at anyone as this can be considered offensive.

• Travel trade are likely to be bi-lingual or tri-lingual, and speak good English. However, avoid colloquialisms and slang, and try and speak clearly - without ‘speaking down’.

Different countries have different protocols - there is a range of publications available which contain business etiquette advice, or try New Zealand Trade and Enterprise at www.nzte.govt.nz

When you are working with international travel trade you need to have a clear pricing structure and policy. In some countries it is acceptable to bargain to get a better price, so in this situation you shouldn’t give out your best rate first. This will allow you some room to negotiate.

International Marketing

Tourism New Zealand’s International Media Programme (IMP) targets international media to produce motivating, accurate and inspirational coverage of New Zealand as a quality tourism destination.

The IMP hosts and supports international media visitors to New Zealand, with the help of RTOs, tourism operators and the industry.

The IMP strategy targets high-quality media whose reports on New Zealand will reach the our target audience. Around 350 media are brought to this country each year.

The best way for you to get involved with the IMP is to keep in touch with your local RTO. The IMP works closely with RTOs to coordinate the media itineraries within each region.

The IMP needs interesting story angles to entice international media. Stories about special, unusual or invigorating tourism products work best. Try to think about what makes your product or your people stand out from the rest. What is the unique aspect?

The best media results are often generated by operators that inject their personality into their products.

The IMP is an extremely cost-effective way to promote your region - and in some cases your specific product. Any positive coverage contributes to spreading the message to more Interactive Travellers and can in some cases lead directly to increased business.

Tourism New Zealand’s international media team also manages a website specifically for international media interested in reporting on New Zealand as a destination. www.media.newzealand.com is used by media for research before and after trips, and also by media writing about New Zealand without actually visiting the country.

New material for the site can be submitted through your local RTO or to Tourism New Zealand directly through the website.

Explore New Zealand programme

Another option to promote your product to international media, and trade, is Tourism New Zealand’s Explore New Zealand programme.

This is a discounted travel scheme for overseas-based trade or media who we cannot support fully, but who we still would like to encourage to visit New Zealand and to undertake a wide range of options while they are here.

Operators offer discounted or free of charge products and services in a printed directory, which the accredited person can use while in New Zealand.

All media and trade are vetted by Tourism New Zealand’s offshore offices before they are given an Explore New Zealand pack.

The Explore New Zealand programme has a two-year lifespan, so if you become involved you need to be prepared to keep your offer open for the complete two years.

Registrations for Explore New Zealand are taken through through this website every two years, with the next edition scheduled for 2008.

Trade Website

Tourism New Zealand’s dedicated trade training website can help you publicise your tourism product to the offshore travel trade. A trade-specific database holds product descriptions and contact details, along with commission rates, retail prices, language capabilities and a range of other information to make it easier for trade to purchase products from offshore.

If you are ready to begin marketing internationally, you should list your product details on this trade database. You can do so by creating or expanding your listing on www.newzealand.com . Visit the registration site at www.register.nztb.co.nz

Going Offshore

Taking your product directly to international markets is an incredibly effective way of establishing relationships with travel buyers, and making sales. It is, however, an expensive option, and should definitely not be considered before your product is well established in New Zealand.

TRENZ (Tourism Rendezvous New Zealand)

Before you travel to an offshore trade show you should make a point of attending TRENZ, New Zealand’s inbound trade show. This show offers sellers the opportunity to meet a comprehensive range of tourism buyers from around the world.

In fact, tourism operators who want to conduct business directly with international buyers should plan to attend TRENZ for at least two or three years before committing to a trade show overseas. TRENZ experience will help to establish your product in the international marketplace and give you a strong base on which to grow your international visitor levels.

TRENZ is an annual event usually held in May or June, with New Zealand operator registration closing in the previous November. Visit www.trenz.co.nz for further information.

Trade shows

Trade shows are held all over the world. The formats are usually:

• set appointment schedules between buyers and sellers (pre-scheduled appointments made before the event)

and/or

• an open forum that allows buyers to browse and visit stands at random.

Tourism New Zealand runs a number of specialised New Zealand trade shows around the world, and also coordinates a New Zealand presence at other events.

Consult the Events section of this website for a programme of what is coming up.

Please note that from January 2007, Tourism New Zealand will only accept formal applications from quality-assured operators (for example, Qualmark© licensed operators) for its trade events.

Non quality-assured operators can register their interest for events and will be invited to apply if the event is under-subscribed by quality-assured operators. For detail on the trade events this applies to, visit the Events section.

Before committing to a trade show consider the following:

1. Have clear objectives

Are you attending the show to maintain contact with clients, attract new business or launch a new product? Find out what sort of audience the show will have, and whether the show has a strong following.

2. Ensure the format of the show meets your objectives

Does it have pre-scheduled appointments? Can you share your stand with another operator?

3. Liaise with your Regional Tourism Organisations and Tourism New Zealand

If they’re involved with the show they could help you make contact with the appropriate people.

4. Establish your budget

Costs of attendance include: show deposit, airfares, accommodation, transport, meals, exchange rate, pre and post activity, staff costs, print material specific to the show, uniforms, booth display material and any follow-up cost.

5. Define your target audience

Check that the trade show is reaching
the appropriate target audience for your product, eg. choose a leisure travel show if you wish to build relationships with wholesalers and retail travel agents.

6. Connect with inbound tour operators

Many international buyers finalise their buying of product through an inbound tour operator. Before attending an international travel show you should first have established relationships with inbound tour operators in New Zealand.

7. Get market ready

Your product must be market-ready, meet buyers’ requirements, and be suitable for international markets.

8. Set your rates

Rates for your activity, attraction or accommodation are usually required to be set for a 12-18 month period.

9. Develop your material

You will need appropriate promotional material - enough for the show and follow-ups. Material should include brochures, fact sheets and images.

10. Check current buyers

Check with any international buyers you are currently working with and find out whether they are attending the show.

11. Ensure language capability

Attendance at some events is only appropriate for company representatives fluent in local languages and supported by brochures in these languages. This requirement is specified in the registration information on the Events section of this website.

Successful attendance at a trade show

Once you have decided to attend a particular trade show, you need to plan your involvement carefully.

Pre-show marketing

Do your own pre-show marketing to buyers, or work with other suppliers from your region to coordinate a joint marketing campaign - perhaps by direct mail or email.

Stand design

Your booth needs to reflect your brand and the benefits of your product. Create a point of difference that will attract the eye of potential buyers. Your booth also needs to be a good working environment for appointments. Don’t forget to include your industry accreditations.

Staff

The stand must be staffed at all times, and allow for unscheduled or double-up appointments. Staff will need to have a good understanding of your business and objectives. Be well prepared in advance for scheduled appointments.

Pre-scheduled appointments

Most trade shows offer a pre-scheduled appointment forum. You should also allow time to meet prospects who are not on your appointment list.

Morning and afternoon tea breaks and social functions often provide opportunities to network with unscheduled buyers.

Promotions

Creating a competition - either on your own or as a cooperative venture with other suppliers - can attract buyers. Entry forms are also an invaluable source of information for your database and follow-up information after the show.

Successful appointments

Most appointments are only 12-15 minutes long. Be friendly and welcoming, listen to the buyer and find out about their business and requirements. Understand fully what they wish to achieve from meeting you, then tell them about your product and how it can achieve their goals.

Make a note of the post-show action they require. Have kits with information sheets, brochure examples and images available to give out at the show, although sometimes people will prefer to receive this after
the event.

Follow-up

Follow-up should be undertaken as soon as possible after returning from the trade show. Letters and product kits should also be sent to buyers you couldn’t meet with.

Media

Often trade shows will have a specific media centre located on the show floor. Ask if you can have your media kits, press releases, etc displayed within the centre.

Offshore Sales Calls

Sales calls to i-SITE Visitor Centres, local tourism businesses and your RTO should be a regular part of your marketing plan.

International sales calls are an extension of this process. Before you plan your sales visit, consider the following:

• Match your product to the market opportunities.

• Local language material is hugely beneficial.

• Arranging your appointments pre-visit is a must.

• Ensure you are meeting with the most appropriate person who can make decisions.

• Contact Tourism New Zealand in-market and get their most up-to-date industry list.See our office list on this website.

• Study the distribution system in the market you are visiting.

• Be aware of brochure production specifications.

• Avoid visits during statutory holidays.

• Make sure your product fits the travel trade you plan to visit.

• Make an appointment to visit Tourism New Zealand’s in-market office during your trip.

During the visit:

• Allow enough travel time between appointments.

• Be familiar with their commission structure.

• Your product is important, but you should also promote New Zealand and your region; not all trade will have a clear idea of what is on offer.

• Don’t forget to talk to the frontline staff; most will not have been to New Zealand.

• Take up-to-date marketing materials.

• Be aware of language requirements.

• Giving small corporate gifts is a good way to finish appointments.

Remember:

• Have realistic expectations.

• Relationships are built over time.

• Be innovative.

• Work closely with inbound operators - before and after your visit.