Earthquake story could resurrect the tourism industry

ALAN WOOD
Last updated 13:03 21/06/2014
Malcolm Johns
DEAN KOZANIC/ Fairfax NZ

TAKING A CHANCE: Malcolm Johns, chief executive of Christchurch International Airport, is pushing a bold concept to resurrect the tourism industry here, but is unsure if the city will adopt the idea.

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Christchurch Airport boss Malcolm Johns is pushing a bold concept to resurrect the tourism industry here, unsure if the city will adopt the idea.

Johns, in the driving seat at the airport for five months, says to rebuild international tourist numbers the city needs attractions with emotional pulling power.

The earthquakes and recovery should be front of mind.

"If you look at it in a positive light, we've just had the biggest brand awareness campaign across Australia and Asia, that we could have ever hoped for."

He does not want to turn the quakes into a Hollywood attraction, but the people that visit Christchurch over the next 20 or 30 years will want "to find a way to emotionally connect to the events that happened here".

He says the city's earthquake tragedy can be told as a compelling story for visitors to the South Island.

Johns, refreshingly, pulls no punches on the damage to the tourism industry by the quakes.

Christchurch Airport is 678,000 international tourists down on what it would have had without the quakes.

That meant a $20 million cut to its profit.

He points to the importance of attractions for pulling power. An example is Bilbao in Spain, a city of about 350,000. The city developed a visitor approach anchored around the spectacular Guggenheim Museum, which moved it from backwater status. Visitor numbers lifted from fewer than 100,000 before the museum to closer to 1 million within five years.

City councils across the world have noted that success.

The story of Christchurch and its earthquakes belongs in the spiritual heart or the central business district, Johns says.

"That's a story of a city that's faced disaster and tragedy but developed an unbelievable resilience, and that story . . . is the most iconic story for Christchurch there will ever be."

He's not sure though whether the tragedy is still too raw for this.

The city's close relationship with Antarctic explorers and programmes was another appealing story, if the people of Christchurch shy away from his "quake story" idea, Johns says.

He is keen to build a co-ordinated approach to rebuild numbers. He has already done some of the legwork to try and get a group together to work on a visitor strategy.

It is going to be a bumpy ride for Christchurch's rebuild and at some point tourism will have an important role, Johns says.

"The next few years won't be trouble free or smooth sailing.

"If you look out to 19/20 the rebuild economy is going to start to wane, and if the visitor economy is not stepping back up again you run the risk of a small economic dip."

Not only that but the visitor economy produces the best opportunities for a lot of the temporary workforce to transition into permanent citizens.

The visitor economy embraces things like meetings, convention and incentive events, the cruise ship industry, transport, accommodation and the use of public spaces.

He has approached other organisations including Christchurch and Canterbury Tourism (CCT) and Canterbury Development Corp's Tom Hooper on an overarching strategy.

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He has found the visitor economy, worth $2.4 billion annually, was "not mentioned anywhere" in forward looking economic outlooks by CDC and other organisations. "I think as a city we've got to decide whether we're serious about the visitor economy or not," Johns said.

Hooper won't respond directly to the question of why no mention, instead providing a statement: "Visitors to our region are important to Canterbury's economy.

"International tourist expenditure in Christchurch was $510m in 2013 and international guest nights increased by 10 per cent over the last year (2013 versus 2012)."

CCT chief executive Tim Hunter is supportive of a collaborative visitor approach using a quake recovery narrative. He points to the potential expansion of the Quake City exhibit in the Canterbury Museum.

"I think we definitely need a couple of new visitor attractions in the city, simply to give it a sense of progress forward . . . to get global attention we need some new stuff.

"I think the earthquake story is a very compelling one."

Another story Chinese visitors would be drawn to in Canterbury would be a rural and farming-based attraction similar to Rotorua's Agrodome, Hunter says.

Johns predicts a Christchurch-based visitor strategy group could be up and running in a couple of months.

The airport will do some of the "heavy lifting" to make such plans happen, but needs partners.

"So making sure that our events strategy, our convention strategy, our leisure strategy and our city are flying in formation I think is critical to achieving an ambitious outcome."

The need for a change in thinking is driven by the airport's estimation that it has lost 678,000 passengers a year due to the natural disaster.

The makeup of Christchurch visitors has changed. Before the quakes it was the over-55s that were prevalent, but last summer it was more of the under-30s arriving.

"We're likely to be a trendy cool destination, when we move into that reclaim phase . . . If we think like the old kid on the block we're going to miss that opportunity," Johns says.

He acknowledges his recent career return to Christchurch to take up the airport role in January meant he missed much of the carnage and other tough experiences of 2011.

He and his wife did live here during the 1990s when he worked at Mount Cook Group.

He has since been involved in the "supercity process" in Auckland, in a chief executive working party on visitor strategy. "The transformation in Auckland was amazing as a result of that, the optimism came back," Johns says.

From July 1 he and his airport team have put together a series of targets including 8.5 million passengers a year through the airport in 10 years time. The airport now has around 5.7 million passengers annually.

Christchurch Airport's share of international passenger arrivals was 20 per cent before the earthquake, but had dropped to 13 per cent after the quakes, to the "benefit" of Queenstown Airport.

Christchurch Airport's 2025 strategy would drive that national share back up to 18 per cent.

The 8.5 million target will add an extra $1 billion of gross domestic product into the South Island.

But what is needed to build passengers is continual work on relationships with overseas airline and airport partners in Singapore and Australia, plus new agreements.

The airport has high hopes that China Southern Airlines will some day provide a permanent Christchurch service.

A team built around a new executive position - chief commercial officer of aeronautical development - would chase new services, Johns says.

Growth will also make the airport's $240m upgrade of its terminal and carpark facilities, which was finished last year, make more sense.

The airport is only making a return on equity of about 2.5 per cent, well below the 6-7 per cent usually expected for infrastructure, Johns says.

Before arriving at the airport he was based in Auckland as InterCity Group chief executive with a focus on customers, and also had a deputy chair role with Tourism NZ.

Johns says for the quake story help could be sought from such experts as Weta Workshops, that have used "movie" sets at the Omaka Aviation Heritage Centre to illustrate the turmoil of war.

The airport has already invested in the city's 100-year plus relationship with Antarctica, and early explorers of the icy continent. Johns says many people in Christchurch already have a relationship with the southern continent.

"Antarctica is a global brand, and for us to associate with a global brand . . . is an opportunity we've got, it belongs to us."

The airport, which owns the International Antarctic Centre, had an an internal group scoping whether the story of the city's relationship with the continent and scientists working there could be improved.

Before the earthquakes Christchurch Airport was one of the bookends, along with Auckland, where international tourists flew in and out. That status has disappeared.

Before the quakes Christchurch had about 26 hotels of 3, 4 or 5 stars providing around 3980 rooms. The room numbers have rebuilt to about 1870, but if the airport's 10-year passenger targets are met the city will need 4580 hotel rooms by 2025, he says.

Christchurch leaders should take an interest in reviving that bookend role, he says, given that local government still has in excess of $600m invested in assets "entirely reliant on the visitor economy".

But he won't be drawn on the political question around asset ownership. Asked what were the implications of a possible selldown of Christchurch City Council's 75 per cent stake in the airport, Johns said that was a question for shareholders, that include the Government.

But there would be no real difference in the way the airport was run. A strong visitor and rebuild strategy can add value to the airport, Johns says.

"Probably of all the [council controlled] businesses we were the one hardest hit by the loss of the CBD and until that's back we are unlikely to see a catchup of what we've lost."

- Stuff

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