Virus cost $100m, job losses feared

Halting all Chinese visitors for two weeks to prevent the spread of the coronavirus is calculated to leave a $94 million hole in our tourism earnings.

And there are fears of job losses if the travel ban is extended beyond the initial fortnight announced, especially for businesses relying on the Chinese market.

Tourism Industry Aotearoa chief executive Chris Roberts said they accepted the need for temporary entry restrictions on all foreign nationals travelling from, or transiting through mainland China.

‘‘Taking measures that will help contain the virus outbreak has to be the priority, even if that causes us pain.’’

It was not yet clear how many of the 40,000 Chinese visitors expected in the four weeks around

Chinese New Year were already here, but he estimated about half that number would now not be coming.

‘‘The immediate impact is 20,000 fewer visitors coming to New Zealand, and with an average spend of $4700 per person, that’s just shy of $100m less in New Zealand over the next fortnight. This is a pretty severe and sudden shock. Hopefully businesses are resilient and are able to cope with this, but the uncertainty is, how long will this go on?’’

Roberts said the hundreds of operators heavily exposed to the Chinese market could find things very difficult. ‘‘For those businesses that specialise in mainland China, their cash flow has just suddenly dried up so they will have to find a way to manage until the visitor tap is turned back on.’’

He hoped business failures could be avoided if the Government agreed to measures such as Inland Revenue allowing leniency on tax payments.

Nga¯ i Tahu Tourism, which has 14 mostly South Island businesses, has so far received 6000 cancellations as a result of the coronavirus and chief executive Quinton Hall estimates Chinese visitor numbers will be down 90 per cent this month. ‘‘Like most in the industry we are hurting, the timing of this could not have been worse with an already weak market, weather disruptions across a number of businesses in November and December, and the impact of the fires in Australia on tourism. The next few months will be tough.’’

Hall hoped the market would bounce back when the situation improved.

But Christchurch Chinese consul general Wang Zhijian said New Zealand’s decision to close its borders to Chinese visitors may hamper ‘‘friendly ties’’ and make people reluctant to rebook when that was possible. ‘‘We should guard against overreaction that may result in more negative spillover effects.’’

Wang said China Southern would cease flights into Christchurch from February 12 as a result of the travel restrictions and the consulate was encouraging Chinese booked on outbound flights with the airline after that date to bring forward their departure.

Queenstown Chamber of Commerce chief executive Anna Mickell said the loss of high spending Chinese visitors would be felt in retail and also in attractions because it was not unusual for Chinese families to do four tourist activities in a day.

Jobs might be at risk if the restrictions on Chinese visitors went beyond the initial 14 days.

‘‘If they get a sense that this is going on for months, not weeks, it would be naive to think there won’t be job losses.

‘‘The labour market is so tight and we have so much difficulty finding staff, employers won’t want to let them go if they can possibly avoid it,’’ Mickell said.

Tourism Export Council chief executive Lynda Keene said businesses may need to let staff go if the travel ban carried on through March and April, but they could try to cover the shortfall by picking up more domestic customers and targeting less affected overseas markets, such as Australia.

However, the Australian Government had been urging its citizens to holiday at home to make up for losses arising from the bushfires. ‘‘So we have to be sensitive to that.’’

Roberts said Tourism New Zealand was expected to come out with a plan this week to stimulate other markets.

‘‘They’re the experts so we are looking for their leadership on that.’’

Whether tourism operators will receive any relief from insurance cover is unknown. ‘‘Whether or not that covers a communicable disease outside New Zealand that stops your customers going to you would be something to discuss with your broker.’’