Tourism operators plan to hike staff pay

The MYOB Business Monitor survey of 1000 small to medium-sized enterprises shows tourism operators are outperforming other SMEs with pay rises for staff and more full-time jobs on the horizon.

A quarter of the 120 tourism businesses surveyed said they intended to increase staff pay this year and nearly a fifth would offer more full-time jobs.

The bad news was that rising house prices meant almost one in three tourism operators was finding it hard to recruit and retain staff, which was nearly twice the SME average.

The Business Monitor survey covered companies with up to 20 employees.

Over the past year, 43 per cent of tourism businesses reported revenue growth, compared with the SME average of 36 per cent.

Looking ahead, tourism operators are expecting to do even better this year, with closer to half expecting to earn more, which was well over the SME average of 38 per cent.

MYOB general manager Carolyn Luey said the fact that tourism businesses were looking at pay rises and increasing full-time positions would benefit local economies.

‘‘However, many businesses may well be held back by how expensive it is becoming for staff to find accommodation, especially in key visitor markets like Queenstown and Auckland.’’

According to the Business Monitor, rising house prices have made it harder for 28 per cent of tourism operators to recruit and retain staff, nearly twice the SME average.

The market was also becoming increasingly challenging, Luey said, with 37 per cent expecting competition to put pressure on their business this year.

The cost of fuel, narrowing margins and the burden of compliance were also ‘‘putting the squeeze’’ on SME tourism businesses, Luey said.

‘‘What we’re seeing here is a market that is doing very well, but needs to keep a close watch on the fundamentals in order to prevent costs and pressures from blowing out and affecting the bottom line.’’

As well as affordable accommodation to support the industry and the availability of skilled staff during seasonal peaks, costs of health and safety and resource management compliance were also a concern.

‘‘New Zealand has a fantastic industry in tourism, but we need to take a very careful look at how we’re managing its growth and planning for the future,’’ Luey said.

The Business Monitor results were no surprise to Tourism Industry Aotearoa chief executive Chris Roberts, who said visitor growth over the past three years had given many operators the confidence to reinvest back into their businesses, including taking on more staff.

Pay rates were likely to rise as employers competed for scarce employees, he said, and unaffordable housing made it difficult to attract staff for some roles and in some regions.

‘‘As the BERL report issued yesterday by At Your Service Aotearoa shows, the service sector needs an extra 200,000 workers by 2020. A good proportion of those are in the tourism industry.’’