Assessment of the Wellington Tourism Sector
On reading Superior Hotel’s case, one can note that its major challenge is the unpredictable nature of the tourism industry in Wellington. Such a sentiment is grounded on the fact that the hotel operates significantly under capacity despite recording very busy months on an annual basis. Understanding the market dynamics might allow Superior Hotel’s management to utilize the trends to its advantages. For now, it suffices to claim that the hotel’s high-quality service provision and its strong connection with the local kiwi are vital leverages with regards to the current challenge.
Terms of Reference
Procedure
This report presents an industrial analysis of market data accessed from secondary sources. The sources included journals, survey reports, web articles, and destination reviews.
Conclusions
Market Growth
Before delving deep into this matter, it is important to reflect on Wellington’s international visitor statistics. In his recent report, Rodgers found that international visitors have been on a steady increase for the past seven years (2012). Such a trend has seen the number of overnight and day visits increase from 514,000 to 733,000 and 45,000 to 60,000 respectively (Rodgers, 2012). Clearly, the destination’s market appeal cannot be questioned given that in-bound tourism has been on a steady increase. This then implies that other factors are making the business unpredictable.
Major Markets
Perhaps, developing an in-depth understanding of the destination’s major markets might enhance Superior Hotel’s management’s view of the forces that cause the unpredictability. So far, it has been established that Wellington’s major markets include Australia, Asia, Germany, the United States, and the United Kingdom. Together, these regions account for 73 percent of Wellington’s international visitation (Rodgers, 2012).
When placed into perspective, a plethora of factors can be attributed to the unsteady visitations: the shift from high to low visitor records. For this reason, the management should have a clear grasp of the value each market seeks from the destination (Collier & Harraway, 2006). Such knowledge might enhance Superior Hotel’s value proposition as well as its ability to transform the trends to its advantage. It appears wise to assert that the organization should focus on enhancing the travel experience of visitors from these regions.
Australia. According to Rodgers (2012), Australia is Wellington’s largest market. A similar perspective was shared by Smiler, Anderson, and Patino (2012) when they found that the region is New Zealand’s largest short-haul markets. This factor is highly attributed to the social ties shared between Australian residents and the kiwis. Smiler, Anderson, and Patino add that most visitors from Australia seek to reconnect with their friends and relatives. Such a bold declaration is supported by the fact that over a million visitors from the region hold New Zealand passports (Hall, 2009). Understanding the social bonds between Australians and New Zealanders is essential in Superior Hotel’s attempt to capitalize on the market. When viewed from this point, it is apparent that the hotel can enhance Wellington’s market appeal by promoting the destination as Australians’ opportunity to strengthen their relationship with kiwis.
UK and US. The high visitation rates from the United Kingdom and the United States makes them major markets for Wellington’s tourism sector (Rodgers, 2012). Residents from these regions visit New Zealand for various reasons including trade and culture. In their article, Smiler, Anderson, and Patino (2012) discuss New Zealand’s rich culture. According to them, the cultural attributes of the indigenous Maori have a significant impact on the region’s tourism sector: most visitors – especially Western and European – are attracted to the Kiwi’s unique culture (Wellingtonnz, n.d). At this juncture, it is important to reflect on the fact that the region’s population consists of Pacific Islanders, Maoris, Europeans, and Asians (McClure, 2004). In this case, Superior Hotel can capture this market by promoting the destination’s experiential aspects: emphasis on culture and the unique terrain.
Germany. As noted in Rodgers (2012), German visitors account for six percent of Wellington’s international tourists. Unlike other tourists, Germans visit for occupational reasons, and they tend to stay for lengthy periods (Hall, 2006). Research also indicates that they spend less than other visitors on a daily basis. Such a realization is quite useful to Superior Hotel’s management. Perhaps, it can capture this market by providing low-cost packages.
Asia. Rodgers (2012) also lists Asia among Wellington’s top markets. Inasmuch as this region accounts for only 4 percent of the region’s visitors, it is quite promising. It appears safe to stipulate that the region’s growing middle-class is highly likely to be reflected in the tourist expenditures in future (Pavlovich, 2003). Here, Superior Hotel can meet this emerging need by tuning its four-star services towards customer satisfaction. Note that satisfaction is at the core of the modern middle-class consumer; hence, it should be taken into account (Ateljevic & Doorne, 2002).
Other Markets
Minor markets also influence industrial performance. Visitors from all minor markets account for at least 37 percent of the region’s annual visitations. Such a figure cannot be ignored by Superior Hotel’s management. The firm should aim at enhancing its understanding of the consumer patterns in each of its minor markets so as to tailor its services to meet the needs of the majority (or individual tourists if possible).
Each need should be used as a guide when acquiring or merging with other firms. Perhaps, Superior Hotel should focus on delivering multi-level packages through its various acquisitions: includes bronze (low-cost), silver (slightly high costs and close proximity to locals), and gold (high-end four-star experience). Clearly, the last value is currently delivered by Superior Hotel, and it meets the experiential needs of the Asian, US, and UK travelers. Bronze and Silver level services can be delivered through future acquisitions. For instance, low-budget accommodation can be offered to the German tourists while the Silver level package can be offered to meet the Australian needs. In sum, Superior Hotel should diversify its value proposition through mergers and acquisitions. Such a move will allow it to meet the needs of a broad range of tourists, thus increasing its overall capacity.
References
Ateljevic, I., & Doorne, S. (2002). Representing New Zealand: tourism imagery and ideology. Annals of Tourism Research, 29(3), 648-667.
Collier, A., & Harraway, S. (2006). The New Zealand tourism industry. Upper Saddle River, NJ: Pearson Education.
Danaher, P. J., & Arweiler, N. (1996). Customer satisfaction in the tourist industry: A case study of visitors to New Zealand. Journal of Travel Research, 35(1), 89-93.
Hall, C. M. (2006). New Zealand tourism entrepreneur attitudes and behaviours with respect to climate change adaptation and mitigation. International Journal of Innovation and Sustainable Development, 1(3), 229-237.
Hall, C. M. (2009). Innovation and tourism policy in Australia and New Zealand: never the twain shall meet? Journal of Policy Research in Tourism, Leisure and Events, 1(1), 2-18.
McClure, M. (2004). The wonder country: making New Zealand tourism. Auckland is University Press.
Pavlovich, K. (2003). The evolution and transformation of a tourism destination network: the Waitomo Caves, New Zealand. Tourism management, 24(2), 203-216.
Rodgers, R. (2012). Visitors to Wellington. Wellington, New Zealand: NZ Institute of Visitors.
Smiler, J., Anderson, C., & Patino, W. (2012). New Zealand Tourism: State of the Industry. WelTec School of Hospitality Press.
Wellingtonnz. (n.d). Explore the Wider Wellington Region. Available from https://www.wellingtonnz.com/discover/explore-the-regions/
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