Tourism on its knees — action urged
‘The private sector cannot wait for Budget day’
Tourism operators are pleading for Government action before next Thursday’s Budget for the $40 billion industry which they say is at risk of collapse.
The Tourism Export Council, which represents inbound tour operators, says it is the most impacted sector from Covid-19, with no income or chance to generate it until international visitors can return.
The council’s board and inbound sector are getting frustrated with the Government not looking at specific sector support packages for the industry which was yesterday dealt a further blow with Skyline’s announcement it was making more than half of its 1200 staff redundant.
Nga¯i Tahu Tourism, whose businesses include Queenstown’s Shotover Jet and Glenorchy’s Dart River Jet, last month mothballed its operations with more than 300 jobs likely to be lost.
Tourism Export Council chief executive Lynda Keene says the private sector needs faster and clearer communication from the Government on its plans.
“The private sector cannot wait for Budget day. That is too far away for decisions that will be made within the next week and outcomes that will have a significant impact on unemployment numbers for the next one to two years.
“The tourism industry is crumbling,” she said.
“An announcement within a week will make the difference of retaining some semblance of a tourism sector as a major economic driver in the future, or not. If the Government is not going to support the rebound of the tourism sector, businesses need to know.”
Keene said more than 50 per cent of tourism businesses are in hibernation.
“Businesses are days away from making decisions to permanently lay off all staff, close and wind-up businesses. Tourism businesses need hope,” she said.
The Government is considering what activity will be permitted during alert level 2, which could include the resumption of domestic travel, and Prime Minister Jacinda Ardern is discussing with Australia’s Government the possibility of forming a trans-Tasman border bubble. The level 2 activities will be revealed tomorrow and any move down from the current level 3 will be announced next Monday.
In spite of growing industry and political pressure, the Covid-19 website still states that at level 2 people are advised to avoid nonessential inter-regional travel. There are also guidelines around mass gatherings of people indoors and outdoors.
Keene says the industry needs a steer on whether there could be specific help right now.
“Is the Government going to sacrifice the tourism industry because of the perception or fact/knowledge domestic travel will take four to six months to happen or six to 12 months for international visitors to return?”
There is interest from offshore markets and intent for visitors to travel to this country when smart border controls allow for safe travel.
International airlines had only suspended services, not cancelled airport slots, which Keene said was encouraging.
She is calling for the wage subsidy to be extended to 26 weeks to save thousands of jobs in tourism.
And while the subsidy was highly valued, it goes straight to the staff member and does not help the business with other costs.
“It is therefore also critical businesses receive financial assistance asap to help with overheads, fixed costs like rent/lease relief (biggest issue) and utility bills. Businesses are still incurring these costs against zero revenue.”
The council has set out a number of measures it would like to see from the Government to maintain a “bare bones” tourism industry that can reignite economic activity as soon as conditions permit.
● Allow domestic travel at level
2 within safe guidelines.
● Support the Board of Airline Representatives and Air NZ with maintaining international airline slots and keep airlines updated on smart border developments.
● Support trans-Tasman developments for safe travel.
● Extend wage subsidy to 26 weeks (time parity with Australia and UK).
● Business injection grants for businesses to assist with overhead costs, especially rent/lease fees. Very few tourism businesses will take up the loan because they don’t wish to incur more debt.
● Zero-rate GST for NZ owned/ operated inbound tour operators (change to current regulation in the GST Act 1985 Section 8, 2B and allowing it to be applied under Section 11A).
● Tourism NZ provides 12-24 months of zero Qualmark holder fees. High-risk existing Qualmark holders will drop if still being charged with no visitors.
● DoC ceases to charge concession fees to take visitors to National Parks for 12-24 months.
● Give regional tourism organisations ( RTOs) funds direct to reboot domestic marketing activities on a regional level. RTOs already have all the media outlet contacts and this will save time. Tourism NZ to do national and “big picture” marketing.
● While tax measures were welcome, reduction in compliance costs such as ACC.
● NZ Trade & Enterprise to provide inbound tourism marketing grants for two years to attend international trade shows (they provide for other industries, not tourism).
● Faster holiday visa processing times needed when international interest in NZ returns.
● Continued support of temporary migrant working holiday visa holders if domestic travel ignites later this year.
Keene said many inbound tourism operators have experienced staff that speak many languages and retaining them was more effective than letting them go. “A lot of our work is done before visitors arrive in New Zealand but we need experienced and qualified staff around to do it.”