Measuring the Backpacker Sector – Definition and Trends Bruce Bassett Tourism Strategy Group Ministry of Economic Development Presentation to the 2010 Backpacker Conference 3 September 2010

Importance of ‘knowing’ your sector My key take-outs are: There is a reasonable amount of data on the backpacker sector There are definitions and compatibility issues to be aware of There are important information gaps Finally, I will issue the challenge that the sector itself should be organising to generate the information it really needs

Data sources International Visitor Arrivals - IVA Other relevant data -Business demography -Electronic card transaction data Data sources International Visitor Arrivals - IVA International Visitor Survey - IVS Tourism Satellite Account (TSA) Domestic Travel Survey - DTS Forecasts Accommodation Survey - CAM Excludes hosted accommodation, serviced apartments, the small/micro businesses that fall below the GST/turnover threshold Regional Visitor Monitor - RVM - Backpacker data

Data sources Commercial Accommodation Monitor (CAM) Census of commercial accommodation businesses - GST registered with turnover over $30,000 Conducted by Statistics New Zealand ‘Supply side’ survey. Self-completed Hotels, motels, backpackers, holiday parks Monthly, quarterly and annual data Long time series KPI-quality data for guest nights, occupancy, capacity, establishments, seasonality, regional activity Proxy measure for whole sector, esp. at regional levels Latest data to June 2010 Strongest data for backpacker sector analysis Excludes hosted accommodation, serviced apartments, the small/micro businesses that fall below the GST/turnover threshold

Data sources International Visitor Survey (IVS) Survey of 5000international visitors aged 15+ At Auckland, Wellington and Christchurch airports ‘Measures expenditure and travel patterns Tourist’ = staying in New Zealand for less than a year Backpacker = An international traveller who spends at least 30% of their nights in New Zealand staying in backpacker/hostel type accommodation Data okay for characteristic analysis, but limited by definition used and sample size

Data sources Domestic Travel Survey (DTS) Survey of New Zealand households Telephone sample of 15,000 households Measures expenditure and travel patterns of domestic travellers Measures overnight, day-trip and non-travellers Backpacker = A domestic traveller who stayed in a backpacker at least once during the trip Limited backpacker-relevant data

Data sources Regional Visitor Monitor (RVM) Survey of visitors in in six tourism regions (aged 15+) International & domestic tourists Measures motivations, expectations, booking, satisfaction and environmental ratings Backpacker = A traveller whose main accommodation in the region was in a backpackers Unique characteristic information on booking and motivation in regions

What indicators are covered? Number of businesses Capacity Guest nights Occupancy Share of total accommodation Business size Employment Seasonality Regional differences Origin, purpose, age, travel style, spend, booking, satisfaction Environmental performance Here are some results…

Number of businesses - CAM

Daily capacity - CAM

Share of all capacity - CAM

Business size by capacity - CAM

Business size by employees - SNZ

Employment by accommodation type - SNZ

Monthly guest nights - CAM Data compares past three years (available on Pivot Tables) Backpacker guest nights down slightly on previous years, but Nov & Dec 09, and Jan10 showed improvements

Guest nights and growth - CAM Demand has grown steadily since 2000, with fastest growth 2001-05 of between 7-13% p.a. Growth slowed, but then declines in 2009 during the recession. Now in a slow recovery patter, with annual growth resuming since Nov 09, but growth still below 2%. How does recovery compare to other accommodation types? All accommodation types - annual growth resumed from Feb10, and since then growth has reached 2% Hotels - growth started Jan10 (+0.2%) but since jumped to 4.7%. Heavy discounting - taking some of the motel market? Motels - faring much worse - growth only began in Mar10 (0.4%) but has dropped to -0.3% in May. Back up to 0.2% in June, but very tentative Holiday parks - small growth started in Feb, and now at about 1%

Backpacker capacity - CAM Demand has grown steadily since 2000, with fastest growth 2001-05 of between 7-13% p.a. Growth slowed, but then declines in 2009 during the recession. Now in a slow recovery patter, with annual growth resuming since Nov 09, but growth still below 2%. How does recovery compare to other accommodation types? All accommodation types - annual growth resumed from Feb10, and since then growth has reached 2% Hotels - growth started Jan10 (+0.2%) but since jumped to 4.7%. Heavy discounting - taking some of the motel market? Motels - faring much worse - growth only began in Mar10 (0.4%) but has dropped to -0.3% in May. Back up to 0.2% in June, but very tentative Holiday parks - small growth started in Feb, and now at about 1%

Backpacker Occupancy Rates - CAM Occupancy has fallen over the long-term as capacity has grown and demand/guest nights have remained much the same.

Guest nights by accommodation type - CAM

Origin of guest - CAM

Total spend by Backpackers - IVS Total spend (excluding international airfares) of those international visitors who spent at least 30% of their nights in backpacker accommodation. YE Jun 10: Total spend - $518,921,635 9% of total international visitor spend -10.3% on the previous year (but this figure is subject to sample error of approx +/- 15%)

Backpacker vs other international - IVS

Average spend per person - IVS

Average nights in New Zealand - IVS

Average spend per night - IVS

Origin of Backpackers - IVS

Age of Backpackers - IVS

Visitors employed in NZ - IVS

Purpose of visit - IVS

Travel style - IVS

Other accommodation used - IVS

Activities undertaken - IVS

Satisfaction - IVS

Recommend New Zealand - IVS

Domestic Backpackers purpose of trip Domestic backpacker spend $164 million

Domestic Backpackers age - DTS

Why visit a region - RVM

Expectations of regions - RVM

How backpackers found out about regions - RVM

Information sought pre-arrival - RVM

Sources of Information - RVM

Websites used for pre-booking - RVM 3 quarters of data – still building this information up, so watch this space!

Satisfaction by accommodation type - RVM

Environmental ratings - RVM

Backpacker sector outlook No accommodation sector forecasts International arrivals 3.5% - Average annual growth rate to 2016 3.1 million international arrivals in 2016 Domestic tourism Stable levels over the forecast period

Tourism Confidence Index - TIM

So, what is missing? Quite a lot of descriptive data, but… Real lack of business-oriented intelligence: Financial data of sector Performance of businesses Benchmarking data across businesses

Difficult to use what we have now What we have now is actually hard to use due to: definitions sample size limitations where data is held

Looking forward Need for the sector itself to take change of its information needs On one hand… MED likely to do less sector-specific analysis than in the recent past Data sources such as CAM will be reviewed to assess merits of the data vs respondent load On the other… Opportunity to organise your sector to deliver quality information – sector-wide and for business benchmarking

To conclude… Quality data on the tourism industry and its functional sub-sectors is critical to decision-making The best means of putting very specific information in place is for the sectors to do it themselves Challenging, but the information can be tailored to what is really needed, with the major gap at present around quality commercial information

Thank you… www.tourismresearch.govt.nz The information used today can be found at: www.tourismresearch.govt.nz