China moves to end jacked-up NZ bus tour shopping stops

From next month, travel agencies will not be able to sell organised shopping tours which have hidden tour "shopping" stops.

Which means retailers in traditional tourism hot-spots will be preparing for new laws which shake up the way group tours can be packaged for Chinese tourists in particular.

New tourism laws passed by China’s government legislates against the “zero or negative tour group fees” phenomenon from October 1 and is aimed at promoting transparency of tourism products.

In New Zealand this affects shopping tours focussed on the North Island and particularly Rotorua as the main site for souvenir shopping.

Popular products being bought are souvenirs which represent New Zealand, milk powder – often at the bequest of friends back home, health products such as honey and propolis, lanolin, mud packs and wine.

Tourism New Zealand's general manager of Asian markets Tony Everitt says China’s laws herald a turning point for the industry which is reorganising rapidly to provide more transparent tours.

The first tours to comply with the new rules went on sale in China last month.

The feeling among travel agents is the change will accelerate the development of independent travel among Chinese visitors, Mr Everitt says.

“The differential reduces so there will be more incentive to take on an independent holiday,” Mr Everitt says.

“It also means there is more time for tourism and travel, getting off the beaten track and seeing New Zealand.

“We'll also see more of what we call ‘mono’ or New Zealand tours and the tourists will start to see New Zealand and Australia as separate places.”

Shunning the bus anyway
In New Zealand, Chinese tourists overtook the UK as the largest tourism market by the end of 2012.

Last year, 225,000 tourists to New Zealand were Chinese and Mr Everitt says the number could swell to 400,000 in three years.

There’s evidence more of those travellers are shunning the tour busses ahead of shopping tour law change.

Current data indicates 15% of Chinese visitors travel independently. The goal is to increase that number to 25% in three years.

Independent travellers explore beyond the major tourism centres, which is welcomed by the tourism industry - providing an opportunity for their spending to be spread more broadly throughout the country.

In response, Tourism NZ is helping operators develop more independent holiday packages.

But Mr Everitt says bus tours will remain important because there will always be tourists who don’t necessarily have the confidence to pick up a rental car or hop on an InterCity bus and have an independent adventure in New Zealand.

Challenge for retailers
The rise of the independent Chinese traveller means retailers can no longer rely on their relationships with the tour guides and will have to find ways to market directly to tourists.

Competition for the tourism dollar will increase as the tourists will look to spend their money on other aspects of their holiday beyond shopping.

Mr Everitt says retailers should see the change as an opportunity.

“The businesses that are faster to adapt will get the early wind shift.

Chinese tourists are unlikely to turn their back on shopping completely, but they will be more difficult to target

“Chinese people love to shop. That is part of their DNA and it’s true whether they are on a coach or travelling independently.

“We are hearing from the regions they are still shopping big time, but perhaps more so in independently-owned local stores rather than in the big tourism areas.”

gbond@nbr.co.nz