Cultural Organisations and Businesses Attitudes to and Engagement with the Tourism Market

Executive Summary

1.1 Introduction

As part of the development of a cultural tourism strategy for New Zealand, the Ministry for Culture and Heritage commissioned McDermott Miller to report on the nature of the cultural sector’s engagement with the tourist market. The outcome of this research is presented in this report which identifies cultural businesses’ attitudes to and current engagement with the tourism market. It also identifies potential options for improving and increasing engagement with that market.

1.2 Research Objectives and Questions

The qualitative and quantitative research yielded data which enable the following conclusions to be drawn regarding the key research questions:

What are the attitudes of cultural sector businesses to the tourism market?

Most organisations had a commonsense understanding of the nature of cultural tourism, defining it in such terms as:
- ‘Cultural tourists are visitors from outside the local area whose primary purpose for the visit is to attend a cultural or arts related event’.
- ‘Sharing with visitors elements of your culture’.
- ‘Tourism that is generated by cultural activity’.
- ‘Activities or displays which reflect the culture, both past and current of all the communities which are established in an area.’
- ‘Tourism that relates to 'the way we live' or 'the way we used to live' - using what and who we are and what matters to us, to generate both income and a better understanding of our country - by ourselves and overseas visitors. To me cultural tourism might include experiences and events relating to food, drink, sport, arts, religion, traditional celebrations, etc. It does not relate exclusively to Maori experiences and events although these are clearly important'.
Most organisations taking part in the survey perceived themselves as predominantly cultural organisations rather than tourist orientated organisations.
Among the cultural organisations, some negative perceptions of the tourism industry emerged:
- 48% of organisations agreed or strongly agreed that it is difficult for non-profit organisations to collaborate with commercially driven tourism organisations.
- 46% agreed or strongly agreed that the tourism industry had a different understanding of what constitutes an authentic cultural experience.
- 17% agreed or strongly agreed that their organizational vision and values made it difficult for them to market themselves proactively to the tourism sector.

How important is the tourism market to their business?

When the research results are generalised across all organisational types within the cultural sector:
- 60% of organisations considered their core market as ‘Locals’,
- This compares with 13% and 9% of organisations who considered their core market as ‘Domestics’ and ‘Internationals’ respectively.
However, there are clear differences between different types of cultural organisations regarding the relative importance of the local and tourist market. In particular
- 91% of performing arts respondents cited the overwhelming importance of the local market compared with 8% of heritage organisations;
- however 50% of heritage organisations cited international tourists as their core market compared with 3% of performing arts organisations.

How are they currently engaging (promoting themselves or
their ‘products’) within the tourism market?

Respondents to the qualitative survey claimed that they used the full range of marketing channels available to them - print, direct mail, email, web, i-sites, special promotions and events and membership, friends or subscription arrangements. They considered their marketing efforts were effective.
The quantitative survey confirmed that cultural sector organisations used this range of marketing channels. However, it also indicated that across the sector as a whole, the organisations’ overall marketing orientation was not particularly strong:
- 55% of organisations surveyed did not set themselves a
  specific annual visitor target.
- While 94% of organisations had a website, 45% of them could not indicate the number of unique visits per month.
- 47% did not gather and analyse any audience data
- 37% could not distinguish between local people, domestic and international tourists 38% had marketing budgets of less than $5000
- 24% had a marketing budget between $5001-$20,000
- 11% did not know or did not spend any money on marketing

Are there unmet expectations in the tourist market?

Demand for Cultural Tourism (Colmar Brunton, 2003) identified a series of cultural products that are strong drivers of overall holiday satisfaction, but were perceived less favourably by international tourists.

The report also concluded that while the domestic traveler displays obvious signs of national pride in our tourism offer generally, at the specific cultural product level there is a clear sense of ‘cultural cringe’ apparent – New Zealanders rate our offer more negatively than international visitors do.

Three initiatives were suggested to address these issues:

The quality of selected cultural products should be improved.
It is critical to work with our own market to encourage domestic travellers to value our cultural tourism offer more.
There is a need to build ‘understanding of how our cultural tourism offer is a direct extension of our land and environment’ – elements of the visitor experience valued by both domestic and international visitors alike.

In light of our research, what opportunities and challenges do these initiatives present for cultural organisations?

Within the cultural sector, the quality of the product offering was not questioned. The quantitative survey suggested that cultural organisations believed that tourists would be attracted to their products for a variety of reasons, including their ‘unique’ qualities and their capacity to ‘showcase [an] area or region’.
There was no evidence of ‘cultural cringe’ among the interview subjects. They believed, often passionately, in the quality and significance of their product offerings.
Within the sector as a whole, there was a strong awareness of the importance of domestic tourists as advocates for specific cultural tourism attractions (81% agreement). The cultural sector organisations also considered that local visitors and international tourists represented potential advocates for the significance of cultural tourism attractions. A total of 93% of respondents slightly agreed, agreed or strongly agreed that locals ‘are likely to encourage others to visit’, while 60% agreed that international tourists could perform this same function.
Despite this, no specific evidence was presented that cultural or tourism industry representatives were actively targeting domestic tourists to recruit them as product advocates or involve them in experiences beyond ‘the usual’.

What is required to encourage selected cultural organisations to respond to these opportunities and overcome the challenges they pose?

The research did not establish that most cultural organisations felt they needed encouragement to engage with tourism nor that there were significant factors that prevented them from doing so. The majority of respondents to the qualitative interviews did not identify any significant constraints to their increasing success at attracting a greater share of the tourist market.
The quantitative research showed that six out of ten statements concerning possible constraints were of some concern to the cultural sector, although not overwhelmingly so. These were:
- We do not wish to pay commission fees to tourism operators
- The tourism industry has a different understanding of what constitutes an authentic cultural experience.
- It is difficult for non-profit organisations to collaborate with commercially driven tourism organisations.
- It is more cost-effective for us to secure a loyal local audience than to position ourselves as a tourist attraction in a market where there is no repeat business.
- The long-haul tourism market needs to operate on a 2-3 year planning cycle, whereas our planning cycles are much shorter.
- We lack the knowledge, expertise and resources to develop new tourist-specific products and services.
- There was also consensus, particularly among museums, art galleries and heritage organisations that domestic and international tourists were ‘essential’ to their organisational ‘survival’.
- Even those organisations not currently involved in marketing to cultural tourists indicated that this would not continue to be the case: 55% indicated that they would consider marketing specifically to tourists in future.
- The most significant factor that was identified as a means of encouraging more effective marketing to domestic and tourism markets was some type of collaborative arrangement with the tourism industry.
- Over half (52%) of the sample considered that no new initiatives were required to help them to engage more with the tourism industry.
- Where specific suggestions were made, they generally represented extensions, or intensifications, of existing partnerships including:
  - Help and guidance from RTOs/government (11%)
  - Help given with tourism marketing and promotion (8%)
  - Better funding/ more resource (6%)
- The future of cultural tourism in New Zealand was generally considered to be ‘bright’ and ‘potentially very important to the industry’. The most enthusiastic respondent suggested that it ‘could be the biggest draw card worldwide’. Among the positive features of cultural tourism the following factors were mentioned:
  - The uniqueness of the people
  - Wonderful stories
  - Authentic, unique, distinctive cultures

An important success factor was that future initiatives should be to ensure that planners and product developers should ‘make people part of the [cultural tourism] experience’.

1.3 Intriguing Variations

Heritage and Performing Arts Organisations

As has been noted above:

91% of performing arts respondents cited the overwhelming importance of the local market compared with 8% of heritage organisations;
50% of heritage organisations cited international tourists as their core market compared with 3% of performing arts organisations.

Two principal reasons for these differing perceptions are suggested
by the research.

The first concerns the planning cycle employed in different cultural fields. While heritage buildings and sites, because of the relatively static nature of their attractions, can confidently predict the nature of their product offering within the 2-3 year planning period used by inbound tourism operators, the same is not true of performing arts organisations.
Apart from heritage organisations, all other groups consider that their marketing dollar can be most effectively spent on attracting repeat business from their local audience.

From a strategic perspective, this perhaps suggests that different cultural tourism products need to be targeted to different audiences.

Heritage organisations and those with a relatively static range of attractions (museums and art galleries for example) have the potential to be marketed effectively to International tourists in partnership with inbound tour operators.
Performing arts organisations and festivals perhaps have greater potential to be packaged up with airlines and accommodation providers for the domestic tourism market (the Send Yourself to Wellington strategy is a successful example of this sort of approach).
Techniques or relationship marketing are well established as a means of transforming individuals from customers to advocates. These techniques would appear to be relevant to the continuing development of both domestic and international cultural tourism products.

Marketing Capabilities

There are apparent contradictions between the responses given by respondents to the quantitative questionnaire. On the one hand it is apparent from the data summarised above that, for the sector as a whole, the marketing orientation of a majority of organisations is deficient. On the other hand, despite the fact that cultural tourism is considered essential to the survival of many cultural organisations, a majority considered that they required neither help nor encouragement to engage effectively with the tourism sector.

Different orientations Help Explain Apparent Inconsistencies

The sample of 188 organisations who responded to the quantitative questionnaire was dominated by visual arts retailers (76), with a strong representation of performing arts organisations (37), followed by public art galleries and museums (37), heritage organisations (15) and 13 others (including Maori tourism and cultural organisations). This suggests that:

Art retailers are more likely to have a sales orientation than a marketing orientation.
Many arts organisations have a product orientation rather than a marketing orientation.
Almost half (47%) of the total sample were charitable trusts or incorporated societies which are likely to have a not-for profit orientation.
Over a third (38%) of the sample had minimal annual marketing budgets.

In other words, the foundation on which to base a development programme for cultural tourism is fragile. As the respondents themselves concluded, collaborations to pool skills and resources are a necessary element of future strategy, but possibly impractical without Government financial assistance.