Make or break: the adaptable survive

AUCKLAND: For tourist operators and the industry nothing the Government could deliver was ever going to be enough.

There are signals more may come later on top of extended wage subsidies and special $400 million fund, but some businesses simply can’t survive this ruthless economic evolutionary test.

Even the biggest and the fittest may not survive — the most adaptable have the best chance. That means surviving perhaps months of hibernation and switching their customer base from international tourists to Kiwis.

Tourism Industry Aotearoa says the Budget sends the right signals but the sector was hit first and likely will be the last to recover, with many casualties along the way.

‘‘The Budget package will not be enough to prevent significant job losses across the industry. In terms of immediate survival, the measures announced today are welcome but further initiatives will be required in the months and years ahead,’’ TIA chief executive Chris Roberts said.

The group representing inbound operators, the Tourism Export Council, is scathing, calling it a sad day for international tourism.

‘‘The package will not help inbound tour operators or businesses that have 80% of their business orientated around international visitors to make it to the finish line [at the end of the year] In fact, the tourism recovery package does not even help businesses to get to the starting line in spring,’’ chief executive Lynda Keene said.

New is the $400 million Tourism Recovery Fund, which is light on detail and will be challenged to find its targets quickly enough to provide meaningful direct life support.

There will be ‘‘protection and assistance’’ for some operations deemed so strategic they cannot be allowed to fail.

These could be operators in smaller centres key to those economies. Expect there to be a long list of applicants.

The most immediate benefit for nearly all tourism businesses is the eightweek extension to the wage subsidy scheme. The eligibility bar is stepped up to a 50% hit to revenue but in tourism, where many businesses have shrunk to zero income, nearly all will qualify.

The industry, as with many others, wanted an extension to the full six months. The eightweek period will take tourism through to early August in what should be the middle of the ski season.

Tourism before Covid19:

Total spend $40.9 billion, $112 million per day.

International spend $17.2 billion, $47 million per day.

By then, will those catering to large Australian market be able to cash in on a transtasman travel bubble?

New Zealand and Australia have had success in the health battle against the virus but this Covid19 horror story has got worse at every turn so it would be a major twist in the plot to see the bubble forming in August rather than later in the year.

As part of the $400 million there will be a ‘‘transitions programme’’ to deliver advice and support for either pivoting a business towards the domestic and Australian market, hibernating a firm, or other options. This will be useful if it can get going quickly.

There is welcome impetus added to dishing out the money, as Finance Minister Grant Robertson is slated to join ministers of Tourism, Maori Development, Conservation, and the undersecretary of regional economic development.

For what must be further down the track, Tourism Minister Kelvin Davis also announced the establishment of the New Zealand Futures Tourism Taskforce, a publicprivate task force to lead the thinking on the future of tourism in New Zealand. Crucial, but for a later date.

As already announced and eagerly anticipated, Tourism NZ will shift its focus from selling this country overseas to selling it to Kiwis with some of its budget of just under $112 million. There is a soft rollout under way and the campaign proper will start once domestic travel is bedded in safely. TNZ will take the lead in the transitions programme and its chief executive Stephen EnglandHall said his organisation had the information about what Kiwis wanted and aimed to get the programme running within days.

Mr Roberts said he was encouraged by the Government recognising just how important tourism was and welcomed the $1.1 billion managed by the Department of Conservation to create 11,000 environmental jobs. This could provide work for some of the near 400,000 who were employed directly or indirectly in tourism but who had now lost their jobs.

The prospect of further help down the track was also a good sign, he said.

Before Covid19 ravaged tourism, it delivered about $47 million in foreign exchange every day of the year and domestic tourism contributed another $65 million daily.

Thursday’s announcements came as level 2 allowed domestic travel — the most welcome step in getting the industry breathing again.

In Queenstown, Mayor Jim Boult took the lead in welcoming the return of domestic tourism with a Bungy jump into the Kawarau Gorge on Thursday morning.

AJ Hackett Bungy NZ cofounder and managing director Henry van

Asch said the move to reopening of the Kawarau Bungy site was a positive step but he warned of a long tough road ahead.

But in the spirit of not wanting to waste a crisis, Mr van Asch spoke for many when he said the pandemic, while catastrophic for New Zealand tourism, provided an opportunity to rethink tourism.

‘‘There’s been a feeling that we’ve had too many visitors to New Zealand for some time, so it’s important we make the most of the opportunity to recreate tourism.’’

Besides news of Mr Boult’s jump there was a discount offer. Adult jumps for the time being are less than half the standard price.

This is something all New Zealand tourist operators will be thinking about — the Goldilocks price point. Not to hot and not too cold.

There have been justifiable complaints that prices aimed at overseas tourists on the trip of a lifetime to New Zealand have been beyond reach for Kiwi tourists.

The foreign tourists are not coming any more, and now is the time to rethink the offer for the domestic visitor market.

With more help from the Government those adapters that get the proposition right, perhaps with the help of the transitions programme, now have more of a chance of bouncing back to the other side of this. — The New Zealand Herald