How Queenstown back can bounce
Eco-elopements, South American charters and a sustained building boom keep Queenstowners optimistic, writes Debbie Jamieson.
Trent Yeo is exhausted. His Queenstown zipline business – Ziptrek Eco Tours – has been stripped of its international visitors, and he is fighting to keep it going. But these are the times in which entrepreneurs thrive, and it is also giving him new energy.
‘‘It is exhausting, making these changes all the time. It’s not easy, but we’re more capable than we’ve ever been at reinventing what our businesses could and should look like. My view is that if you’re not trying something, you’re going to eventually fail.’’
As soon as Covid-19 hit New Zealand last year Yeo, who was named Emerging Tourism Leader Award at the 2019 New Zealand Tourism Awards and also sits on the Tourism Industry Association board, began reworking his backing systems, renegotiating every contract he has, seeking new ideas.
Two weeks after the country exited Level 4 lockdown, Ziptrek held its first sold-out Treehouse Session, a collaboration with New Zealand Music Week that saw live musicians perform in architecturally designed treehouses dotted across the hillside overlooking Queenstown.
Soon after, he joined the Queenstown Wedding Association and started offering a venue for weddings and eco-elopements. He is now offering bespoke educational tourism opportunities for high school and tertiary providers.
The world is changing and business operators need to start viewing it differently, he says.
They need to look at bringing New Zealand visitors back for return visits and see past a summer slump that saw a traditional three-month peak drop to a rainy three weeks.
Ziptrek is operating with half of its pre-Covid staff and revenue is somewhere between 15 per cent and 20 per cent. Most Queenstown Tourism businesses report operating at about 10 per cent revenue.
The $500,000 he secured in Strategic Tourism Assets protection programme funding is helping the business survive (Yeo applied against the advice of his accountant and business partner, who believed the business did not qualify) and he believes it is positioned perfectly as a future model of sustainable tourism.
‘‘We will be there in the long run. It’s a question of how battered we’ll be,’’ he says.
When Queenstown-based Xtravel owners Tori Keating and Niki Davies were watching their travel agency go down the gurgler in the immediate aftermath of Covid-19 they volunteered to offer advice to thousands of migrant workers and travellers stranded in Queenstown.
The problem became so desperate that in September the pair chartered and personally backed 70 seats on a LaTam flight to South America, and have since chartered one more flight into New Zealand and three into Australia from South America and four return flights.
This week they have a private charter flying from Auckland to Chile via Australia, which they put up $500,000 to guarantee.
The risk has paid off and, despite keeping the ticket prices modest, their revenue has now increased to above its pre-Covid level.
Keating says they have been surviving at times on two to three hours sleep a night as they work across time zones to secure MIQ beds and co-ordinate with embassies, airports, government departments, and immigration staff.
So far they had repatriated 750 people.
‘‘I’m working harder than I’ve ever worked in my life. It’s also the most rewarding work ever. Every morning our inbox is filled with love and support and photos of families hugging for the first time in 300 days; people walking into their houses and hugging their cats. It’s absolutely beautiful.’’
The stories of Ziptrek and XTravel are inspirational among a growing number of Queenstown tourism businesses being forced to close their doors, including the mothballed 200-room Millennium Hotel.
But while many working directly in tourism are struggling to see how they will survive with only domestic visitors to plug the hole left by about 3 million international tourists, much of Queenstown continues to operate as if little has changed beyond the absence of Frankton Rd traffic jams.
Hundreds of local production crew and extras started work in the past couple of weeks on two filming projects, which are also bringing crew into town for several months.
The romantic comedy Under the Vines featuring The Crown actor Charles Edwards and Packed to the Rafters icon Rebecca Gibney will be in the region for 13 weeks, and the second series of crime thriller One Lane Bridge started this week, bringing its $6 million in NZ On Air funding with it.
Film Otago Southland chairman Brad Hurndell says the projects and continuing commercial and advertising work are welcome after a tough year.
New Zealand appeared to have had a massive boom in hosting domestic and international film and television production in the wake of Covid and the region was keen to attract its share of the work, he said.
Real estate and construction industries are also holding up despite a few wobbles in the early stages of Covid-19.
Real Estate Industry NZ real estate figures show a 7.6 per cent decrease in median house prices in the Queenstown Lakes District from $1,055,000 in January 2020 to $975,000 in January 2021. However, sales volumes increased 44.9 per cent. In December, the median prices increased – up by 8.2 per cent yearon-year to $1,050,000.
Harcourts Queenstown managing director of growth Warwick Osborne says the peaks and troughs of monthly figures have become more pronounced in the past year, but Queenstown is showing its enduring appeal as a lifestyle destination.
‘‘It’s a reasonably good picture going forward,’’ he says, although the impact of the reintroduction of the LVR and other Government measures to manage the property market are yet to be seen.
Also unexpected has been an almost universal increase in primary school rolls around Queenstown.
At Remarkables Primary School there are 60 new students registered to start at the school over the first half of the year. The majority of the new families were moving to Queenstown from within New Zealand, but there were also ex-pats, principal Debbie Dickson says.
Many work in the IT sector and plan to work remotely from their Queenstown base; some are new business owners; and others have come for new jobs or to base themselves in Queenstown while working in the wider region, she says.
But the school roll increase has perplexed local economist Benje Patterson. From his point of view, the rot is beginning to sink in.
In the early days of Covid-19 the local economy was buoyed by New Zealanders exploring their own backyard and wage subsidies, but ultimately it was a Band-Aid over a much bigger problem – the gaping hole left by absent international visitors, he says.
Destination Queenstown figures for the past three months of 2020 show the total number of domestic and international visitors has halved.
Patterson says retail spend is down between 30 and 40 per cent, the number of building and resource consent applications has dropped about 25 per cent, job numbers are almost 8 per cent below where they were a year ago and the number of people on Ministry of Social Development benefits has jumped
‘‘Let’s remember that we are maybe the most attractive part of the world to live in. When Covid-19 is behind us, and at a point in time it will be, people will come back here.’’ Jim Boult, Queenstown mayor
from fewer than 50 to about 1200.
Some positives for the community include a dramatic drop in rent prices and an increase in the number of new businesses created: 468 for the month of December, up from 417 a year earlier, he says.
Also, the first of the Government-funded $85m shovel-ready projects is under way in central Queenstown, though Patterson suspects the larger works will take longer to proceed than anticipated and might not be timed to pick up the people losing jobs.
He was disappointed Tourism Minister Stuart Nash ruled out a targeted wage subsidy for the tourism industry this week and fears a situation where the tourism businesses with the deepest pockets will outlive others, leading to concentration of ownership and a loss of diversity – a visitor ‘‘mafia’’ of sorts.
He sees tough times ahead for many households ahead as tourism, which contributed more than 43 per cent of the region’s GDP in recent years, continues to struggle.
‘‘The reality is there will be downstream effects,’’ he says.
‘‘There will be a wave of people who have more vulnerability to their income in professional services and industries such as construction.’’
Nick Thompson, NZ director of hotels and tourism at international company JLL Hotels and Hospitality Group, confirms the hotel building industry, which boomed preCovid with hundreds of new rooms being built to meet soaring demand, has slowed right down.
However, he sees light at the end of the tunnel. ‘‘Vaccines are starting to occur and at some point in time international tourism will resume, and it will resume with a hiss and a roar. We will still be a nice, safe destination at the bottom of the world.’’
The focus now needed to be on getting existing businesses through the tough times and being prepared to build new hotels to meet the market. ‘‘Post-Covid it’s going to be the same [as 2019], but on steroids.’’
Queenstown Lakes Mayor Jim Boult sees the future differently. ‘‘My view is that when tourism does come back air travel will be expensive. I wonder if we will see the nirvana we’ve always wanted of a few less visitors with more money to spend.’’
The doom and gloom in the tourism sector was ‘‘all-pervading’’, but he was confident the Queenstown community would bounce back. ‘‘Let’s remember that we are maybe the most attractive part of the world to live in. When Covid-19 is behind us, and at a point in time it will be, people will come back here.’’
Construction was still strong, and it appeared that the local population was growing. ‘‘This is still a good place to be if you’re not reliant on the tourism industry for your income.’’
He had been impressed by the community spirit that saw support pour in for thousands of migrant workers who suddenly found themselves out of work last year, and ongoing recognition of the difficulties many people face.
‘‘When I arrived home last night there was a bottle of wine with a note attached from a local saying ‘I know you’re under the pump at present’.’’
The Queenstown community was resilient and tough, he said. ‘‘These aren’t folk who sit on their bottoms doing nothing. They are go-getters. They won’t lie down and Queenstown will survive.’’