Queenstown wage war looms

Queenstown hospitality bosses fear a wage war is looming as they face critical staff shortages ahead of the expected return of international tourists.

Unqualified housekeepers and hospitality staff are being paid up to $27 an hour, and some believe it will set a new and unsustainable minimum wage.

Hospitality NZ regional manager Darelle Jenkins said there were more vacancies in Queenstown than ratepayers and New Zealanders were not applying for them.

It was hoped some overseas workers would arrive under the Working Holiday Visa programme before a predicted busy winter. However, others could only be employed under the new accredited employer work visa, which comes into force on July 4 and stipulates a minimum hourly rate of $27.76 for all jobs.

‘‘That is massive,’’ Jenkins said, ‘‘[It] almost sets a new minimum wage. You can’t have one person on nearly $28 and someone else on $21.20. Some businesses have made the decision they can’t sponsor staff because they can’t afford it.’’

A wage war was already under way in Queenstown, she said. ‘‘Everyone in business is wanting the best staff they can get. Or any staff.’’

Prior to Covid-19, housekeepers were paid between $20 and $21 an hour. Now no-one was able to pay less than $23 or $24, Jenkins said. ‘‘Now I’ve heard of one hotel the other day saying they’re paying $27 an hour.’’

Hilton Hotel general manager Chris Ehmann said when his hotel is full, he needs 70 people working in housekeeping. He currently has about 45.

His biggest problem was filling entry level positions. New Zealanders were not interested, he said. ‘‘The reality is we need people to clean the hotel. If that starts costing me $45 an hour then I’ll pay it, but there won’t be anyone coming to do it.

‘‘Everyone says pay more money, but it’s not going to solve it.’’

Most Queenstown employers paid above the minimum wage, and tried to meet the living wage, he said. ‘‘It’s not that we don’t want to pay . . . it’s just that there’s nobody here to do the work.’’

Despite strong visitor numbers predicted for winter, he was restricting the number of rooms available as the business was not able to service them. He expected a full-on wage war would start in June.

The issue came down to immigration settings, but the Government appeared unwilling to speak to industry representatives about it, he said.

Immigration Minister Kris Faafoi did not answer questions about ongoing communication with the sector but said he was acutely aware of the pressure some sectors faced. ‘‘That’s why we prioritised Working Holiday Visas as one of the first visa categories to open.’’

More than 6000 applications had been made under that category since March, and they were expected to support the tourism, hospitality and horticultural sectors, he said.

Queenstown Chamber of Commerce chief executive Ruth Stokes said Queenstown had lost about 1500 migrant workers employed on essential skills visas preCovid-19. Up to 180 of those people had been employed in housekeeping.

Wage pressure was being felt across all industries in the town from hospitality and tourism to legal firms and construction, she said. ‘‘With winter coming and really strong bookings coming through, those people associated with the visitor economy are quite stressed about how they’re going to meet the demands and maintain services.’’

Wage inflation in the district was at about 9%, two-times higher than the rest of New Zealand. Workers were shifting jobs for as little as 50 cents an hour, or considerably more money, she said.

There were also lots of inducements being offered, including accommodation and vehicles.

Queenstown travel agent Tori Keating joined forces with Jenkins to set up a Facebook page called Locals Keeping Queenstown Open, to enable locals to help businesses through the busy winter by providing short-term labour help.

People could do one-off shifts or regular work. They did not necessarily need experience. ‘‘Anyone can clear a table, wash dishes, strip beds or sweep out a coach.’’

Neighbourly has also launched a new initiative, called Short Notice, to support short-staffed small businesses.