April will be crunch time for the tourism industry

Thursday, 28 January 2021

Mad Campers managing director Andy Haslett says that the loss of overseas visitors has been 'brutal.'

April is predicted to be crunch time for increasingly desperate tourism businesses deprived of international visitors.

Mad Campers managing director Andy Haslett made the call to park up all but about 30 of his 100 rental vans while the border remains closed, and he has launched a side hustle fitting out Auckland restaurants and bars to maintain cash flow up.

He said Kiwi customers simply could not fill the gap left by the overseas visitors he previously relied on.

“It’s like putting a band aid on an axe wound.”

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Mad Campers director Andy Haslett tried to diversify by offering his vans as accommodation for cherry pickers in Central Otago, but only about half a dozen people took him up on it.

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Jereon Jongejans of Dive! Tutukaka says receiving a Government grant for strategic tourism assets will help him retain staff, but peaks and troughs meant they needed 30 or 40 staff at weekends and only five during the week. “How we make that sustainable for the business and the staff is going to be a big juggle, but that’s our Covid reality.”

Tourism Industry Aotearoa chief executive Chris Roberts agreed domestic travellers could not compensate for the overseas tourists who traditionally came in February and March, and businesses needed to know in the next week or so what the possibilities were for a full or state-by-state Trans-Tasman bubble.

“If it’s essentially ruled out for six months, or the rest of the year, what’s Plan B? How is the Government going to assist tourism businesses who are unable to access their customers?”

A first round of testing on close contacts of the new community case have all tested negative for Covid-19, Dr Ashley Bloomfield says.

Roberts said that by April hundreds of tourism businesses could choose to cut their losses and close down until the border reopened.

Small operators could mothball their businesses and find alternative work, but larger attractions might also find it uneconomic to continue without overseas customers.

“Rainbow Springs and Agrodome are two significant businesses that are [already] closed and there is a fear there will be more like that.

“It maybe the only decision these businesses can make because the domestic winter trade will not provide sufficient cash to justify keeping their doors open.”

Business broker Adrian Chisholm said owners wanting to sell up and get out of the industry faced a real challenge.

“Banks are not lending a cent to the tourism hotel and leisure sector … unless there’s a cash buyer, the prospects don’t look good.

The Board of Airlines Representatives of New Zealand (Barnz) says the Government needs to provide roughly $600 million in additional support to airlines to keep air links to New Zealand open while the country’s borders remain closed,

“Those that are even slightly under capitalised are going to be at the end of their tether trying to hang on.”

In Northland the loss of international visitors through February and March may be compounded by cancellations sparked by recent community Covid-19 cases associated with the Pullman managed isolation hotel in Auckland .

Dive! Tutukaka director Jeroen Jongejans said bookings for Auckland Anniversary weekend and Waitangi weekend were reasonably good, but there had been some cancellations following news a Northland woman and two Aucklanders had tested positive for Covid-19 after leaving managed isolation.

Test results of their contacts have so far been negative, and Covid-19 Minister Chris Hipkins said a lockdown or an alert level shift wouldn’t be considered until there was proven community transmission.

However, Jongejans said the Covid scare was deterring some travellers. “It’s the perception, people are nervous and make decisions based on nerves.”

“It’s a blow that the last little bit of summer where we could make some money has been hit on the head.”

Roberts said the industry wanted more targetted assistance for businesses that could show they had suffered directly from the border closure, or use of travel vouchers to stimulate domestic travel, both of which have previously been ruled out by Tourism Minister Stuart Nash.

Hotels, airlines and inbound tour operators have also joined the chorus of demands for further financial aid.

Hotel Council Aotearoa director James Doolan said the number of hotels contacted to provide managed isolation was a tiny proportion of the country’s 330-plus hotels with 30 or more rooms.

Hotels in Auckland, Wellington, Queenstown and the West Coast had remained closed over the usual high season, and further closures were likely unless there was relief from fixed costs such as rates.

The Tourism Export council is again lobbying the Government to convert loans offered to 26 major inbound tour operators into grants, arguing that the five-year term was not long enough for struggling businesses.

Chief executive Lynda Keene said the inbound tour sector was worth $17.5b a year pre-Covid, and operators desperately needed financial support to keep going and protect the future pipeline of visitors when the border reopened.

By April, after businesses had experienced limited or zero trading through February and March, the industry would start to see closures and liquidations, she said.