Backpacker hostels bite the bullet over volunteer labour

Tuesday, 8 May 2018

As part of a Stuff series on freebie labour Amanda Cropp looks at the backpacker industry. 

Life is sweet for British backpackers Max Coleman and Scarlett Weston.

The pair earn enough working two hours a day at a Christchurch backpacker hostel to cover their accommodation. 

Their budgeting gets a further boost from food left behind by travellers – even if the abandoned items tend to be porridge oats, pasta, cinnamon and black pepper.

**READ MORE:

* Canterbury backpacker hostels fined over use of volunteer labour

* Illegal 'volunteer' labour rife in NZ's accommodation industry**

*** Volunteer labour crackdown may close backpacker hostels

* Christchurch backpackers struggle to fill beds as young tourists find city 'desolate' 

* MBIE investigates exploitation of backpacker labour in beds for wages deals

* Freebie labour has fish hooks for the tourism industry**

'We don't have to worry about bills, it's sorted,' Coleman says. 'We can save rather than going home earlier, ' Weston adds.

Their employer, Kiwi Basecamp hostel owner Chris Voisin, has stopped the widely practised tradition of casually allowing backpackers to stroll in off the street and earn a free bed by doing a few hours cleaning.

Previously there were no written contracts and no money changed hands. It was technically illegal, but officialdom turned a blind eye for decades.

Convenient though the old system was, the bed-for-labour swap worked out to be well below minimum wage when a $30 bed required three hours work.

Last year the Labour Inspectorate called time on the practice after complaints from travellers who felt ripped off and began handing out $5000 and $10,000 infringement notices to hostels breaching the rules.

When industry leaders intervened, the fines were rescinded, and hostels got six months grace to get in line. 

Now, just like other commercial accommodation providers, they have to provide written contracts, pay minimum wage, holiday pay, and PAYE, as well as putting the GST component of a night's accommodation through their books.

Voisin has learned to live with the extra admin, but he says the real impact on the bottom line of his business will show up over the next two of years.

The impact of shutting off this cheap labour source is beginning to tell, especially on some of the smaller ones that were lifestyle operations relying heavily on the use of volunteers.

New Zealand has 404 backpacker hostels, down from a high of 477 10 years ago. 

Over the same period bed numbers have increased by almost 900 to about 28,000 as big new operators like the Jucy Snooze pod hotels appeared, and with occupancy rates at 44 per cent hostels are feeling the pressure of higher wage bills.

Seabeds Paihia hostel owner Marie Telfer is still steamed up about the 'heavy handed approach' of the labour inspectors who carried out a spot check on her premises in January. 

'These three people in black, they may as well have goose stepped up the drive. They were very officious, not interested in what I was saying. I gave them an earful about what a waste of time it was.'

Telfer is abiding by the new rules, but plans to sell her 23-bed hostel.

The extra paperwork was the final straw. 'It's taken the fun out of it.'

Eric Foley heads the 199 hostel BBH backpacker network and has been in the business for more than 30 years. 

This winter for the first time his 80-bed Christchurch hostel will shut its doors for three months.

The clamp down on volunteer labour was a factor, along with stiff competition from freedom camping and Airbnb, and the fact that partially rebuilt Christchurch is even less appealing to backpackers in the colder months. 

Foley's stance is that informal work in exchange for accommodation is an internationally established practice that is integral to the ethos of the backpacking movement.

The last BBH annual survey of more than 1500 backpackers visitors found about a third had worked in return for accommodation.

Most thought the arrangements with hostels were fair to both parties, and the level of dissatisfaction with farm placements was noticeably higher with complaints about long hours that worked out at well below minimum wage, being treated like a slave, poor accommodation, and insufficient food. 

'Our guests are too highly educated, too aware and connected by social media, and far too mobile to easily be taken advantage of, even if our members had any intention to do so,' Foley says.

His idea of creating a register of hostels that agreed to abide by volunteering conditions similar to those used by the Wwoof (willing workers on organic farms) scheme and the Department of Conservation went nowhere.

Now he worries the inability to simply rock up and work for accommodation without the hassle of signing formal contracts will put off backpackers from coming to New Zealand.

It certainly didn't deter Coleman and Weston even though, once their board is deducted from their pay, they don't receive any cash in hand.

Instead they get a bed in a flat with TV, internet, and laundry facilities, and most of the day free to do what they want.  

Weston, who also has a part time waitressing job, says it avoids the big outlay involved in renting a flat, and if she wants to go travelling, she only needs to give a week's notice.

'I've looked at Wwoofing on farms, but it's normally four hour work a day, so here it's really chill.'

Coleman volunteered in hostels in the Netherlands and the United States and his current two month stint at Kiwi Basecamp is his second there in between travels.

For new arrivals to the country, it provides a job and accommodation in one hit, and he says a big advantage of hostels is their location. 

'It's city centre living but not city centre rents to pay.'

Tourism New Zealand (TNZ) chief executive Stephen England-Hall dismisses suggestions that the end of casual freebie bed deals will significantly affect the backpacker market which last year delivered 192,000 visitors.

Most backpackers wanted to spend at least 40 per cent of their total travel time working to finance their trip, and employment is only part of the mix, he says, 'along with travel costs, the climate, how far away from home it is, and how safe it is'. 

TNZ research carried out in New Zealand and Australia found that exploitation of the backpacker work force across the Tasman was a problem, in particular on farms where there were stories about them working for almost no pay in unliveable​ conditions. 

The feeling was that backpackers were mistreated because they were less likely to complain or to know what to do about it. 

England-Hall says if New Zealand got a reputation as a place that exploited backpackers, it would 'damage the brand.'

Labour Inspectorate manager for the hospitality sector David Milne is determined to ensure that doesn't happen, and says compliance in Canterbury hostels has improved but he is not convinced the message is getting through in other tourist areas. 

Milne says halting the abuse of volunteers creates jobs for Kiwis because hostels that previously employed tourists were now hiring locals.

But several hostels operating legal bed-for work offers said they still preferred to employ visiting backpackers

Telfer said it was hard to find good local staff when she advertised. 'One of them said 'I hope you don't expect me to bend down' and I said 'how do you expect to clean the skirting boards?''

Kiwi Base Camp manager Laura McMaster says about five of her eight staff are young travellers who add to the hostel atmosphere by befriending guests, and talking about their own travel experiences.

'They're great ambassadors. Instead of being negative about Christchurch, they're positive because they've had time to explore the city, and they can tell people about all the little adventures that don't cost a lot.'

Darelle Jenkins manages Base Auckland which at 530 beds is the biggest hostel in the country. 

As the advocacy spokeswoman for the Backpacker Youth and Adventure Tourism Association (BYATA), she was closely involved in negotiations with the Labour Inspectorate over enforcement of the new rules.

'It's not a quick fix to change to become completely law abiding.' 

Jenkins does not know of any closures as yet 'but I can see if happening in future because it's a massive cost increase.'

She accepts things had to change and employed a contract cleaning company with about 20 staff to clean her hostel.

'The quality is better, much as it hurts the bottom line, it's a positive.'

Her gripe is that online backpacker boards are still rife with offers of volunteer labour positions that are clearly breaking the rules.

'There should be an even playing field for everyone. If you've got two properties next to each other where one did and one didn't, one is going to suffer because they're struggling with the bottom line, and the other is doing what they've always done.'

Backpacking by the numbers

• 192,000 backpackers arrived in the year to February

• That's about 10 per cent of holiday arrivals

• They spent more than $900 million.

• Top 3 markets - Australians, Americans and Germans