Coronavirus: Tourism companies plan to lay off more than 13,000 workers

Friday, 24 April 2020

The lockdown and border closures resulting from Covid-19 are decimating tourism businesses.

A survey of tourism companies found they plan to lay off more than 13,000 workers and desperately wanted longer wage subsidies.

The 547 members of Tourism Industry Aotearoa (TIA) who responded to the survey said they would normally employ 27,536 staff at this time of year, but expected to let almost half of them go as a result of Covid-19.

If they ceased trading, 6116 full time positions would be lost, and three quarters called for the Government to extend the wage subsidy beyond 12 weeks.

TIA chief executive Chris Roberts said the survey results backed up estimates that more than 100,000 of the 230,000 jobs directly related to tourism could disappear.

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Skyline Enterprises, which runs luge and gondola attractions in Rotorua and Queenstown, is looking at reducing staff here and at its overseas sites in Canada, Singapore and South Korea.

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About a third of respondents had mothballed their businesses and 65 per cent had already reduced staff.

'The key thing is, how long are those jobs lost for?

Hobbiton has closed its doors and laid off more than 200 workers.

'The positive note from the survey is that only eight businesses are intending to shut down permanently, the overwhelming majority are determined to survive and reemerge again.

'The question is how soon can we start refilling those jobs?' said Roberts

The economic squeeze exerted by Covid-19 began in February when New Zealand halted entry of Chinese visitors, our second largest source of visitors after Australia, but since full border closure in late March, the ripples have widened considerably.

Overseas visitor arrivals were 950,726 from January 1 until the borders closed in March, and that could be our lot for the year. In 2019 New Zealand had 3.9 million international visitors.

Queenstown mayor Jim Boult said the 8400 people who had registered as needing welfare assistance in the resort town probably represented the loss of about 6000 jobs.

The Restaurant Association of New Zealand believes about 10,000 jobs have gone, based on the 20 per cent closure rate reported by its members.

Air New Zealand has forecast 3750 redundancies over the next year following drastic cuts to international and domestic routes, and Virgin Australia's departure from New Zealand cost about 600 positions.

AJ Hackett Bungy New Zealand is gearing up to open its Auckland, Taupo and Queenstown sites as soon as possible, focusing initially on the domestic market.

The mothballing of Matamata's Hobbiton and the Te Puia geothermal and cultural centre in Rotorua saw more than 360 workers laid off.

Skyline Enterprises chief executive Geoff McDonald said the company, which employs more than 500 in Queenstown and Rotorua, put out a restructuring proposal to staff on Tuesday but he would not divulge any details.

'We're expecting quite significant downsizing of our operations both here and overseas.'

About 300 staff work at Skyline Queenstown and 240 in Rotorua, and the company also has gondola and luge businesses in Canada, Singapore and South Korea.

Ngai Tahu Tourism is looking at laying off 300 workers across 13 businesses, and the future of its new All Blacks Experience due to open in Auckland mid-year is also part of a review due to be completed next month.

Wayfare, whose brands include Real Journeys, Cardrona Alpine Resort, Go Orange, and Christchurch's International Antarctic Centre, has not yet made any permanent staff redundant.

But acting chief executive Ian Jackson said the unprecedented impact of the pandemic meant they were planning for that eventuality once the wage subsidy ended, and that was echoed by other tourism operators.

Jucy has laid off 51 of the 332 staff running its rental and accommodation businesses in New Zealand, and most of the remainder were on reduced hours.

'While the wage subsidy has been great … it's becoming clear that the impact on tourism, especially in the short term, will mean that we simply cannot afford to keep on a large majority of our people once the wage subsidy has ended,' said Jucy chief executive Tim Alpe.

Skydive company NZone general manager Clark Scott is expecting redundancies post-subsidy because the most of their customers had been from overseas.

'If we double our domestic numbers, that doesn't even get to 20 per cent of the numbers we used to be.'

AJ Hackett Bungy New Zealand has so far retained all 220 crew members, aside from a handful of seasonal workers who were due to leave, but that may not last according to managing director Henry van Asch.

'We're bracing ourselves for the full impact and this means jobs will have to go, but we're looking to identify alternative work to keep our people busy through what is going to be a very difficult time.'

Tourism Minister Kelvin Davis said he was well aware of the issues the industry was facing and had been feeding that information to Cabinet which would decide how to continue to cushion the blow for all businesses.

Additional reporting by Debbie Jamieson and Joanne Carroll