Southern giant: ‘Revenue is zero’
Tourism veteran predicts slow recovery, but vaccination offers a silver lining
Wayfare Group chief executive Stephen England-Hall isn’t expecting the same rebound as after previous lockdowns, but he does see one long-term silver lining from the current Delta outbreak.
The group is one of the largest tourism operators in the country, owning two of New Zealand’s bestknown skifields, cruise businesses in Fiordland, and other attractions around the South Island.
England-Hall says he’s not expecting the sharp bounce back, especially with Auckland — the main source of domestic tourists — likely to be at a higher alert level than the rest of the country for some time. Restarting a big business such as Wayfare, which has more than 1200 staff, is not like “switching on the kettle”, he says.
“The challenge that’s here this time is each time you go into stasis, you don’t know quite how long that’s going to be for, and the larger the company, the more complex that becomes because of staffing and health and safety and training.”
England-Hall headed Tourism New Zealand for nearly four years before moving south from Auckland at the beginning of the year to his new role, based in Queenstown.
“I’m a rose-coloured glasses kind of guy, but revenue is zero and you can’t run a company with no income for very long.”
Aside from some essential service ferry operations to Stewart Island and at Lake Manapouri, none of the company’s businesses could function at Alert Level 3 or higher.
The privately-owned firm had received wage subsidy support and would seek payments again. It is made up of five tourism brands: Cardrona Alpine Resort; Treble Cone; Go Orange; the International Antarctic Centre in Christchurch; and Real Journeys, where it started more than 60 years ago. In the 2018-19 year the activities part of the operation attracted about 1.6 million visitors.
Pre-pandemic, the skifields’ visitors were between 60 per cent and 70 per cent Kiwis and the rest of the business was about 90 per cent international. Like other operators, Wayfare had been able to take advantage of Kiwis’ eagerness to travel at home but there are limits, says England-Hall.
The strength of the homegrown recovery is illustrated in Stats NZ data out yesterday which shows domestic tourism electronic card transaction spending was up 28 per cent in the year ended July 2021, compared to the year ended July 2020. It was also up 19 per cent on pre-Covid levels in the year ended July 2019.
But because of Covid, Wayfare’s international business revenue was well below half of what it used to be.
“Kiwis have certainly enjoyed or engaged in many of our products,” says England-Hall. “It’s not at a sustainable level yet domestically, but it’s certainly better than probably we had anticipated.”
He expects “dribs and drabs” of visitors when alert levels are reduced, but the October school holidays are key.
“A lot of that depends on Auckland being opened up. And my suspicion at the moment is Auckland’s probably going to be locked down for a little while longer — let’s hope they’re at level 2 by the school holiday period, in which case we’ll look forward to welcoming them here.”
In the meantime, his firm has plenty to offer the rest of New Zealand, but he believes the recovery will be slower and shallower than last year.
England-Hall says being in the tourism business is “bloody tough” at the moment.
“Nobody is having a good time in tourism — hospitality, recreation or accommodation — but you’ve got to try and look through it and try to understand what you can create in the future and how you can adapt to it.”
This week a new survey found the mental health of tourism operators is under severe stress.
Three-quarters of respondents to the Tourism Industry Aotearoa survey were concerned about their personal health and wellbeing, with 9 per cent being very concerned.
Respondents were heavily focused on stress, uncertainty, mental toll, fatigue, depression and financial concerns.
Overall, the survey found that tourism businesses’ turnover has halved (down 48 per cent) and four out of 10 jobs have been lost compared to pre-Covid levels. Four out of five businesses were operating below pre-Covid levels and 5 per cent of respondents said they won’t be operating in the next six months.
But England-Hall says the Delta outbreak could have a positive spinoff in the longer term.
“The response to lock the whole country down in a sudden and sharp way was the right thing to do for a country that was so slow to roll the vaccine out. But I think that the silver lining is the acceleration of the vaccine programme.”
That was not only good for tourism and recreation businesses, but good for the country as a whole.
While there was little chance of the transtasman quarantine-free bubble being resumed with the previous rules, high rates of vaccination offer the potential to open up to bigger markets.
“There’s not much light at the end of the tunnel for a bubble with Australia but there’s a greater light in a much larger tunnel because of the ability to create a risk-based border with a range of countries which might be broader than just Australia.”
Wayfare was originally founded in 1954 by tourism and conservation pioneers Sir Les and Olive Hutchins and is still privately owned by the family, who with other shareholders have poured money into the firm during the past year, says EnglandHall.
He says it has received inquiries and bookings from overseas for a year to 18 months out.
“There’s still a lot of interest out there — the trick is how do we convert it.”
There’s not much light at the end of the tunnel for a bubble with Australia but there’s a greater light in a much larger tunnel because of the ability to create a risk-based border with a range of countries. Stephen England-Hall (above)