Tourism keeps head above water
The void left by the international tourism market is too big for domestic travellers to fill. But tourism operators are doing the best they can, despite the second round of restrictions. Brittney Deguara reports.
While the future of the international tourism market remains shrouded in uncertainties amid the Covid-19 pandemic, the domesticmarket is still ticking along.
The July school holiday break was awelcome relief for many operators.
‘‘Considering what we’ve been through and whatwas going onwe were blown away,’’ says Kaiko¯ura Kayaks partner and operations manager Matt Foy.
The adventure company had a great holiday season with figures comparable to last year’s.
Southern Discoveries, which runs a number of cruises and tours in Fiordland and Otago, also experienced an increase in sales. Chief executive Tim Hunter says the domestic market increased from 20 per cent of sales pre-Covid to 40 per cent in that period.
Winter is usually a low season, but the pandemic appeared to work in the industry’s favour this time around. Tourism Industry Aotearoa’s (TIA) communications manager Ann-Marie Johnson has been in contact with a number of operatorswho reported positive spikes.
Tourism New Zealand recorded 550,000 Kiwis outside their home region on July 11 alone – the highest levels of domestic travel sinceMarch.
Travel restrictions – and an almost global shutdown – meant Kiwis weren’t leaving the country in droves over thewinter period, like they previously had.
The re-emergence of the virus in Auckland and the subsequent lockdown really threw a spanner in theworks.
Foy admits the July high didn’t last long as the second wave really slowed down operations. This experience was widespread.
‘‘That has absolutely put a dent in everybody’s plans,’’ says Tourism New Zealand chief executive Stephen England-Hall.
Previous modelling from the tourism body found Aucklanders were among those more likely to travel domestically more frequently.
‘‘The rest of New Zealand really felt the absence of Auckland in the tourism industry,’’ England-Hall says.
Hunter noticed domestic demand following the first round of restrictions was strong and growing, but the second wave hit like a brick wall.
‘‘[It] really has been very difficult. [We’re] not seeing the volume of July at all.’’
On the other side of the country in Hawke’s Bay, Coastal Wine Cycles processed numerous cancellations.
‘‘The Auckland market has been supportive for our regionwith weekend getaways, sowe really hope they pick up again now,’’ owner Hannah Coltart tells Stuff.
Foy is appreciative of the local support – even a long-term courier driver came out for a tour – and that of his staff, Tourism New Zealand, and TIA. But the second wave in Auckland affected local sales too.
‘‘[Therewas a] heightened sense of anxiety around the place. We did lose some bookings over it and it did feel like the flow had stopped generally.
‘‘[It was a] bit of a kick in the guts for everyone. [It] felt like we were slipping back into lockdown.’’
Unfortunately, some businesses won’t be able to survive on sporadic peaks. England-Hall acknowledges some may fall by the wayside, but with a few months of pandemic experience many will be able to survive and potentially thrive.
‘‘Some businesses will have already found a new normal and will be operating verywell.’’
Concerns over uncertainty are a recurring theme in the industry at the moment, but as EnglandHall puts it, uncertainty isn’t a new feeling.
‘‘None of us . . . can see around corners.’’
While the future isn’t yet bright, businesses who have been able to adapt and evolve to suit the times appear to have a dimly-lit future ahead.
Since the borders closed in March, businesses have had time to pivot and restructure their approach to capture eager local travellers. Obviously, those with a heavy international focus preCovid had a bigger job than those whowere already capturing local markets.
Before the pandemic, international travellers only made up around 25 per cent of Coastal Wine Cycles’ business. Whereas it made up 60 per cent of Southern Discoveries’ and 95 per cent of Kaiko¯ura Kayaks’.
Hunter said the company took out a clean sheet of paper and asked what domestic travellers want from their company and operations. They have since
adapted theirmodel to offer more value for customerswith different price points and family deals.
‘‘We’ve really had to change the way we think about it and not get stuck in the past.’’
Foy and the team at Kaiko¯ura Kayaks have done the same. They were aware that manyNew Zealanders were feeling the financial pinch of the pandemic so decided to lower their prices and offer discounts. The company is also focusing more on family kayaking tours and kayak hires.
However, the sustainability of these approaches is being questioned. Is it viable for these companies to continue offering reduced rates as theywait for the borders to reopen?
Kaiko¯ura Kayaks is operating at roughly 50 per cent of its usual capacity. Foy understands heavy discounts aren’t a sustainable approach for any business, but it’s
away to get the wheels turning again.
Southern Discoveries is only operating a third of its full fleet and can only carry half of its regular on-board capacity due to physical distancing requirements.
‘‘Ifwe get busy in the next school holidays . . . [it’s] going to diminish our earnings,’’ Hunter said.
It was heartbreaking to know the demand is there, but they can’t follow through due to Covid-19 restrictions and requirements. ‘‘It’s tough, it’s very tough.’’
Operators aren’t the only ones forcefully adapting, Tourism New Zealand has also changed its marketing approach. The organisation is developing a surge marketing campaign that can be turned on and off in regions impacted by future lockdowns and outbreaks.
‘‘The higher the [alert] level the
less we invest, the lower the level the more we invest,’’ England-Hall explains.
Fullers GreatSights, which operated its ferries as essential services throughout lockdown, is working on reviving its scenic tours ahead of the busy season.
Barry Nielson, the company’s operations manager, explains sightseeing cruises have been operating on a reduced schedule, but the company is preparing to ramp up services.
‘‘We’re planning to operate, restart more cruises and tours at the end of September, in anticipation of a steady summers season,’’ Nielson says.
Historically, summer is the most popular season for visitors from China, the United States, the United Kingdom and Australia, according to 2018 data collected by Tourism New Zealand.
Before Covid-19 effectively decimated the tourism industry, Fullers GreatSights operated daily cruises and tours in the Bay of Islands.
Nielson notes the team has been able to overcomemany hurdles along the way, but the tourism side of the business is significantly depleted, especially when compared to last year’s operations.
Most of the country’s tourism operators rely on the international market, which remains just out of reach. The idea of a trans-Tasman bubble or a bubblewith realm countries has been floated for months, but there’s no solid plan in place.
Many have accepted that a quarantine-free travel bubble with Australia is unlikely to inflate in the near future, TIA’s Johnson says.
‘‘Couldwell be summer 21/22 before we see any reasonable number of international people,’’ she says.
Southern Discoveries’ Hunter added: ‘‘We’ve had to be realists, and we’ve done a budget for the next year that’s based on the domestic market only and it’s a bit grim, butwe have to be realistic about it because that’s all we’ve got.’’
Kaiko¯ura Kayaks’ Foy is pessimistic about the bubble becoming a reality.
’’It’s a tricky virus and itwould be amazing if it did happen, but we aren’t very hopeful at the moment.’’
The second Covid-19wave in Victoria has quashed any hopes and dreams of quarantine-free travelwith Australia for the time being, Prime Minister Jacinda Ardern confirmed lastmonth.
For others, hope isn’t completely
It is heartbreaking to know the demand is there, but the company can’t follow through due to Covid-19 restrictions.
TimHunter
Southern Discoveries chief executive
lost, but it is fading.
Coltart and the team at Coastal Wine Cycles are optimistic about the situation but are focused on the market they can access at the moment. Hunter is banking on the borders reopening next year.
England-Hall highlights the need for the industry to remain positive even if no grand reopening is in the works yet.
‘‘We’ve got to keep focusing on that light in the dark time.
‘‘Whether it’s in the next six months or 12 months or 18months, [at] some point we will be connected to the world and consumers will get the chance to travel.’’
While Tourism New Zealand has shifted its focus to the domestic market during the pandemic, it has remained operational in international markets. This is a necessarymove to ensure New Zealand remains top of mind and a viable travel destination when restrictions inevitably ease around the world.
‘‘If we’re not doing that, [it] will just take us longer and longer to recover,’’ England-Hall explains.