Business

Grant Bradley: The tourists are coming – what they will find

OPINION:

New Zealand and the Government are lucky the tourism sector is populated by so many optimists.

The hundreds of thousands who worked in tourism before the pandemic have needed every gram of hope to get them through the last two years.Today the Government announced vaccinated Australians can enter the country without self-isolating and the rest of the world’s visa waiver visitors can do the same from May 1.New Zealand is reconnecting to the world.

But some tourist businesses haven’t made it, a city-size chunk of the workforce has been lost to tourism and the personal stories of business loss have been heartbreaking.Tourism for many who work in it is more about the bottom line, for them it becomes a something of a calling, the pleasure of sharing special experiences with guests and working with like-minded people.

Despite some concerns about too many tourists in some places at some times of the year, pre-Covid the country was largely supportive of the industry and very happy about the $17 billion in foreign exchange it earned.

The tax-hungry Government raked in billions of dollars in GST, income and company taxes.

But more than 700 days with an absence of overseas visitors has left the sector on its knees.

A survey last year by Tourism Industry Aotearoa found that a third of all the people employed in tourism have gone, with a loss of 72,285 people from the industry – equivalent to almost the entire population of Palmerston North.

This includes 6738 or 25 per cent of tourism “working proprietors” – those owner-operators who are the backbone of our visitor industry.

The survey found that tourism businesses’ turnover has halved – down 48 per cent.

The mental health of tourism operators was last year found to be under severe pressure.

Even before the devastating August Delta lockdown, three-quarters of respondents were concerned about their personal health and wellbeing, with 9 per cent being very concerned.

Comments provided by respondents were heavily focused on stress, uncertainty, mental toll, fatigue, depression and financial concerns.

Domestic tourism has provided a boost. Kiwis rediscovering Aotearoa during the past 18 months as they couldn’t go overseas provided a welcome fillip to those businesses able to cater for that market – but that came to a screeching halt as the current Omicron wave took hold.The level 3 and 4 lockdowns that mainly affected Auckland last year have been replaced with self-imposed restrictions that are preventing people from travelling. The wealthy, older market that travels in late summer is especially affected.

That means the already crimped summer earnings that usually get businesses through the lean winter months have been severely hit.So the return of international visitors will come at a crucial time to bolster damaged balance sheets even if the first of those from Australia will be here to visit friends and families, with traditional tourists returning at a trickle.The higher-spending longhaul tourists from Europe and the United States won’t be here until the end of the year.

Auckland has been especially hard hit. The gateway city was skewed towards international arrivals and repeated lockdowns have destroyed livelihoods.

Tourism Minister Stuart Nash is right in saying the reliance on tourism compared to the broader economy is much less than in other tourist towns such as Queenstown and Rotorua. To his credit he acknowledged it would sound harsh but, last year, said those whose tourism businesses failed in the city could more easily start up in other areas.

Nash took on the tourism portfolio 16 months ago and we know what he doesn’t like in the sector – freedom campers who leave a mess, and low-value tourists.He prefers the (ill-defined) high-value tourists, as his predecessors have been chasing for years, and wants to “reset” the sector to tackle over-tourism, work already under way by the industry itself.

While he’s attracted strong criticism from some who don’t think he’s pushed the sector’s case hard enough, others say it’s more of a communications issue.

They say he has been a strong advocate but he’s a member of a top-heavy Cabinet with just a handful of key ministers – and health boss Ashley Bloomfield – responsible for the key decisions.

Now, Nash has the chance to step up for the industry which says it is ready with health and safety protocols in place to welcome tourists back.

One surviving tourism business in Auckland has typified the experience and response in the optimistic and resourceful sector.Bush and Beach ran luxury van tours for mainly international visitors for close to 40 years before demand collapsed in March 2020 with closed borders.Some domestic business has filled the void but there’s only so many stag or hen parties that need vineyard tours, and the company switched to courier work and doing deliveries for a charity.

Managing director Ben Thornton says today’s announcement now provides some hope.While the slow (and flawed for at-risk groups) mass vaccine rollout means reopening may be six months later than it needed to be, he’s confident that those still in the sector will be able to meet the high expectations of international visitors.

Just on 3.8 million of them came in the year before Covid.

But many operators will have to further mortgage their homes – something they’ve had plenty of practice of over the last two years.

Auckland’s downtown, once a tourist magnet, is now a ghost town and will take some revival, he says. And like other areas of the economy, tourism businesses will have to fight for workers and face a new headache – inflation.

But compared with where it was with uncertainty about borders, the sector is in a brighter spot today, says Thornton.

“A weight has been lifted off our shoulders. The guys who are still standing certainly see a light at the end of the tunnel.”

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