Changes in organisational structure of New Zealand tourism

This article discusses the growth of tourism in New Zealand and how it has impacted the organizational structure of the tourism and hospitality industry. It also explores the factors that influence the management structure within the industry and how the government is involved in regulating and directing the industry for the welfare of the country.

Running Head: TRAVEL AND TOURISM 1
Changes in organisational structure of New Zealand tourism

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Part A: Analyse and discuss how management theory and organizational structure have
changed in the Tourism and Hospitality industry over the past five decades
Being an industry that works for all round 365 days, and 24*7, tourism and hospitality
industry is rapidly growing, and offer employment to around 214 million people is highly
responsible for the 10.2% of the global gross domestic product as well as World Tourism
Organization has predicted that global tourist arrivals might come up to 1.56 million by the
year 2020. In New Zealand, the tourist is the vital industry (OECD, 2014). It holds the key
results over the economy of the country in the context of employment, and simultaneously, it
offers the key percent in its workforce that comes to approximately 9.6% of the entire
workforce within New Zealand. It also contributes its share in Gross Domestic Product of the
country (OECD, 2014).
In New Zealand, the growth of tourism is due to the result of various alternatives,
which are provided by tourism and hospitality industry around the globe. Few of the choices
are related to accommodation, which is provided by New Zealand, such as Holiday Homes,
Apartments, Homestays, Beach Houses, Nature retreats, Motels, Vineyards accommodation,
Backpackers, Farm stays Hotels, Holiday parks, Health spas, Homestays, Bed and breakfast,
and Resorts (Pearce, 2015).
The arrival of international visitors is as per the Tourism Research Council, New
Zealand that had mentioned that 2.4 million visitor’s acme in the year 2015. Similarly, at the
same time, international tourism expenditure was predicted to get increase by $1.3 billion and
increased up to $7.5 billion (Pearce, 2015). This made the tourism industry as the highest
overseas exchange of New Zealand. In the last five years, New Zealand with the floral and
white water streams and snow-capped mountains has become the most fashionable

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destination for tourist. Around 2.35 million of the overseas visitors has visited New Zealand
in the year 2015 (Pearce, 2015).
The rise in different hotel ownership, as well as strong branding in the 90’s as well as
in starting of the 20s, has profoundly impacted the hospitality industry, mainly the
organizational structure (Pearce, 2015). Furthermore, in this time, these changes are
appropriate, but there are many other factors too that are contributing to the changing nature
of both tourism and hospitality industry.
In the year 2012, four government ministries came up as a business ministry as well
as employment and innovation. The new ministry that set up itself at the centre of the
government economic plan supported in driving the agenda of business growth by
implementing the combined policies for building the globally and competitively focused
economy (Schubert, Brida & Risso, 2011). This kind of structural change is encouraged as
well as facilitated towards strong relation among immigration and tourism with the newly
formed ministry.
The policy of tourism unit suggests government over how they can better develop the
correct environment for improving the growth and productivity in tourism and hospitality
sector and also increased the contribution of sector towards the economy of New Zealand.
Other units connected with tourism were sector performance collection, analysis as well as
publishing the information of tourism; system performance and institutions, which monitor
the New Zealand tourism; evaluation, research and analysis units, which try to examine the
government initiative effectiveness affecting tourism (Schubert, Brida & Risso, 2011).
New Zealand tourism and hospitality is referred as a crown entity, which is highly
responsible towards promoting the country in overseas market as the famous and exotic
tourism destination. The critical tool used for this is a marketing campaign, “100% Pure New

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Zealand” that evolved in the last decade, and made New Zealand as the most respected and
popular tourism brand around the world. Along with this other campaigns like, “100%
Middle-Earth”, won many awards and underpinned the countries marketing strategy of
changing global attention towards New Zealand from Hobbit to travel (Wang & Pizam,
2013).
There are around twenty nine Regional Tourism Organizations (RTO), which are both
owned as well as operated by the local and regional government of New Zealand and is
assisted by the industry of tourism. RTO is responsible for conducting marketing activities of
regional destinations of New Zealand (Wang & Pizam, 2013).
In the last ten years, global tourism has grown steadily from unimportant to 5% of the
GDP of New Zealand. Hospitality is highly indispensable towards tourism success among
categorized constituents like food and beverage and accommodation services that are highly
contrasted. Income through accommodation is dependent on the visitors, around 95% and
food and beverage source most of the income to approximately 59%, and 41% of visitors
(Pearce, 2014). With such kind of dependency over the demand of visitors, the performance

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of the economy is significant, so that visitors in New Zealand feel satisfied because they are
making a substantial investment in products. All these approaches are united by welfare
theory, which set up the organization economic sustainability measures.
The welfare of economy expression is derived through by Barros & Alves (2014),
relying on organizational factors, t (time), and C (t) as aggregate production or consumption.
It is analysed that economic surplus happens through the consumption and it’s denoted as, S
(t) =U(C (t)). In this, U (t) is utility function. If the analysis starts at τ, then future economic
surplus at the time (t) will be discounted exponentially by implementing the relevant discount
factor (k).
U ( C ( t ) ) . e−k(t−τ )∨S(t ). e−k (t−τ )
Therefore, W is the total welfare of the company is referred as an accumulated
discounted utility that needs to be positive for attaining sustainability (Moriarty, 2015).
It is analysed that efficiency of the resource is not required theoretically for
sustainability. Instead, it’s much needed in a competitive environment, in which availability
of the resource is no different (Moriarty, 2015). The government of New Zealand and
tourism organizations are working towards improving resources efficiency.
FY= S Enterprise
Resources ∧IY = S Investor
Resources
Correlation among efficiency and FY might rely on the various factors combination
like market competitiveness as well as managerial excellence (Beerli & Martı́ n, 2014).
Competitive markets inefficiency often exacerbate the risk of trading, enhances IY as well as
isolate the companies from essential resources (Moriarty, 2015). Even excellence of
management supports in offering favourable FY in New Zealand. Market. As tourism market

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of New Zealand is highly competitive; therefore, a high degree of the correlation needs to be
reflected as the high managerial proficiency level.
Part B: What would be the main factors influencing both the organization and
management structure within the industry at the moment, that would enable them to
take full advantage of the current and future situation in New Zealand?
Different factors create influence on the New Zealand tourism and economic
hospitality structure, tourism scale, as well as long-term sustainability. Labour market
institutions and labour laws are the key determinants of tourism job quality, employment,
methods of production, product mix, along with regional competitiveness. Along with this,
property rights and land ownership also influence the tourist, landowners, and tourism and
hospitality business and create stress on the ecosystem through carrying its capacity (Lau &
McKercher, 2017). Commodity taxes also impact the relative and absolute prices of different
tourism services, via response changing on demand, transportation patterns, and aggregate
scale of tourism and activity mix (Brown & Dev, 2015).
The tourism and hospitality industry of New Zealand is dependent on various
elements and its interconnected parts, such as regulations of government, accommodation,
transport, activities, and attractions and marketing. Multiple businesses span over the single
sector and this single effect part of the tourism and hospitality industry, which holds
significant implications for various other industries (Jenkins & Dredge, 2016). The tourism
industry includes those sectors that support in enabling the tourist to go for traveling from
one destination to the other, like bus companies, travel agents, rental car firms, and tour
operators. It also includes those sectors, which are related to products at a final destination
such as, attractions, accommodation, and facilities (Jenkins & Dredge, 2016). It also provides

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human tourism element like workers force. It also includes government agencies, public
sector, and industry training companies, professional associations, and regional tourism firms.
Tourism demand and business travel under the New Zealand organizational structure
is profoundly influenced by the massive range of factors explored in regions as well as a
destination; they are discussed below (Jenkins & Dredge, 2016). Factors mentioned in the
below figure emphasize over the forces, which create influence over the demand among the
particular region and destination. It also indicates the factors that often influence the demands
in specific regions. Nevertheless, this is much like a generalized image, and particular factors
that create influence on demand for the particular type of business tourism is training courses
as well as incentive travel (Jenkins & Dredge, 2016). Segmentation of business travel market
is possible in different ways.

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(Source: Jenkins & Dredge, 2016)
The expanding market segment includes, business travellers from industrialized
countries like Taiwan or South Korea, or either from Eastern Europe, where changes in
politics has resulted in the expansion of business tourism and hospitality business; Frequent
travellers; tourist taking incentive packages for travel; female business travellers, as well as
business travellers that make long haul (Dwyer, Forsyth & Rao, 2016).
The situation is continually changing, and the type of segmentation in the market of
travel business is most likely to get change with time. Few other factors influence
management structure in tourism and hospitality industry, these are, nature of demand for

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various kinds of tourism and travel business; business travel level and different other sectors,
and question ascended over the demand seasonality (Chon & Mayer, 2015).
All these factors create influence on organizational and management structure, and the
main reason for the government get involved in tourism is out of the concern for citizen
welfare and complete welfare of the country. This also links with the areas like national
security, the stability of the economy, natural resource protection, employment as well as
public health. Activities of tourism and hospitality sector can happen in this area; therefore,
the government is more concern and is regulated as well as directed, to make sure to gain the
highest advantage for the country and for minimizing negative factors (Chon
& Mayer, 2015). The United Nations Conference held in Rome on International Travel and
tourism in the year 1963 had resolved, “the conference deliberates that it is highly incumbent
over the government to urgently stimulate the activities of national tourist, convinced that this
work is undertaken by way of national tourist organization.” (Chon & Mayer, 2015).
In this world, virtually every country holds the national body, which is highly
responsible towards taking out their tourist activities (Beritelli, 2014). Role of NTO is to
make sure about the relevant promotion and development of the nation as the popular tourist
destination in the world. It includes functions like conducting research, promotional
activities, spread information within the country, build global relations, forms tourism
policies, and develop tourist spots (Chandrasekar & Dev, 2016).

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