Domestics want “value for experience” – TNZ explains all

A shift from “value for money” to “value for experience” is essential for operators to successfully tap into the domestic market, according to new research from Tourism New Zealand.

Sharing its domestic research, Unlocking the future of tourism – views of New Zealanders, on a webinar on Wednesday, TNZ said that Kiwis were already familiar with the New Zealand features attractive to international visitors, such as natural beauty and safety. So, domestic travellers were looking for “deeper, unique experiences” on their holidays. This could mean being taken to a spot by a guide that not even locals knew about, or uncovering new local knowledge, hidden gems or stories about a destination’s history, for example.

TNZ consumer insights and partnership manager Zena Ali said that deepening the experiences on offer was one way to overcome some barriers identified by the research, including price sensitivity. “The real opportunity in understanding these barriers and continuing to deepen our understanding of audience is the opportunity to dial up the value of the experience, so shifting away from a value for money mindset more to a value for experience mindset,” Ali said.

Nathan Farmer from One Picture, which undertook the research alongside TNZ, said that despite price sensitivity in the domestic market, and the option for many free experiences such as walks and bike rides, the research found that Kiwis would pay for unique and authentic offerings. “It comes back to that definition of value for experience, which was around ‘tell me something I don’t know about my country or this region’, or ‘help me have real connections with people and other New Zealanders who can show me something I have never seen before so I feel off the beaten path or [like I’m discovering] a hidden gem’,” Farmer said. “If we get to that, then there were people who were happy to pay for example bike guiding – we saw time and time again people who hired e-bikes and paid for someone to be their guide. So, essentially paid for an experience they could have done for free.” Ali added that because the desire by domestic travellers to experience a place ‘like a local’ aligns with that of an international traveller, then undertaking this shift will also set a foundation for returning international visitors.

Farmer noted that meeting the domestic “value for experience” demand also presented an opportunity for operators to work together to create holiday packages for Kiwis, similar to what they might have been offered overseas. “When New Zealanders have travelled overseas, even as FITs, they have been sold a package-style holiday,” Farmer said. “This has affected the way in which they view value for experience, so they are wanting to see regions working together but also operators working together to start to recreate what they have been traditionally been able to buy internationally, which is also a total experience for money.”

Farmer’s examples of where this had been done successfully included “in dive where people were putting together dive packages up and down the country. “Or…a mountain biking trip to the far north for…a high-value amount which saw the person get on a plane, get picked up, and stay at high quality accommodation as they are cycling through the region, all for one dollar amount. [The person] was not questioning how much the bike component of the trip cost because they are viewing it in that ‘done for me’, ‘easy’ way.”

He said that finding ways that operators and regions work together will “add up to a national view of what domestic tourism needs to be.” Emulating the overseas experience could also see different regions meet the different needs of domestic travellers which Farmer said included knowledge, play, thrill, refresh and rejuvenation. “Refresh and rejuvenate might have been Bali or Fiji in the past for us – what we need to start to think about is how our different regions naturally start to tap into those needs.” This, he suggested, could see a destination like Rotorua develop its existing spa offering to become the domestic ‘fly and flop’ holiday location.

The qualitative research has been shared with industry to help enrich and expand their domestic offering and as a source on input for the Tourism Futures Taskforce. It was based on nine focus groups with New Zealanders up and down the country and 26 in-depth interviews with operators carried out during September and October last year. View the full research results here.