Budget help for 'decimated' tourism industry better be big
Tuesday, 12 May 2020
Desperate tourism operators warn there may not be much of a 'decimated' industry left to save unless a promised Budget support package is a big one.
Tourism Minister Kelvin Davis refused to provide any detail of the recovery plan for the industry when he appeared at the Parliamentary epidemic response committee meeting on Tuesday, saying all would be revealed in Thursday's Budget.
Haka Tourism Group general manager Eve Lawrence was among operators to address the committee, and she warned that lockdown and Covid-19 were 'going to cast an incredibly long shadow' on tourism.
'I don't believe for a moment that domestic tourism can even come close to filling the massive void that having no international visitors is going to create for New Zealand.'
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'Efforts to reimagine tourism in the middle of a crisis is like calling in architect instead of calling the fire service while your house is still burning down.
'We need to first put our efforts into saving the house, then think about reimagining and rebuilding our industry.'
Lawrence was referring to the work Davis, Tourism New Zealand and the Ministry of Business, Immigration and Innovation are doing on the future shape of tourism.
She wanted the wage subsidy extended and the threshold of a 30 per cent drop in revenue raised.
'When you see Australia offering Kiwis Aus$765 a week for six months to survive and keep their jobs, we need the same here.
'If we were still trading with a 30 per cent revenue loss, Haka Tourism Group would be over the moon.
Lawrence said a South Pacific bubble needed to be prioritised, with testing at the borders to avoid quarantine periods.
Members of the committee challenged Davis over the delay in announcing the extra assistance, referring to an earlier submission from Sudima Hotels chief executive Les Morgan who said he could not wait any longer and had already made 85 per cent of his 550 employees redundant.
Davis was not able to say how many businesses the package would help, and he said total tourism job losses related to Covid-19 would become clear in August when Stats NZ employment figures were released.
“We have been open and honest from the outset that we will not be able to save every business and every job, and that the wage subsidy scheme and the other business support package measures were just there to soften the blow.'
Event organiser Jeff Alexander said the business events' industry was worth half a billion dollars a year to the economy and had been without any income for eight weeks.
Last week they were led to believe events of up to 100 people would be permitted at level 2, so it was a shock to have gatherings limited to just 10 people, and his business could not survive with that restriction.
Government entities were cancelling events, withdrawing funding or running events internally rather than using professional event managers, and Alexander said many experienced companies could fail without assistance.
'If there''s nothing coming out in the budget on Thursday, I would say the even industry will be in its dying moments.'
Tourism Industry Aotearoa chief executive Chris Roberts has for weeks stressed the need for prompt financial support, a point he made to the committee.
'We will see a wave of people laid off in June depending on what's in the Budget, for some people it's too late, so we need the earliest possible notification.”
Matt Brady heads inbound operator Pan Pacific Travel, and said his business had “zero revenue, not one dollar” and it could not continue without significant help.
He painted a dire picture if his part of the industry was not there to “fill the pipeline” when the borders opened, because the demand was definitely still there.
Inbound operators handle one third of long haul visitors to New Zealand, packaging up offerings from thousands of suppliers, ranging from B&Bs to coach tours and rental cars.
“If we did not exist the vast majority of those overseas tour operators would simply cease to sell New Zealand … it's just not commercially viable to do that.”
Brady said Prime Minister Jacinda Ardern had a huge international following, and her comment that the borders would be 'closed for a very, very, very long time' had an immediate impact on international tourism markets.
'Every single inbound operator had an immediate wave of cancellations of people in early 2021.
“We had people approaching us saying 'should we stop selling New Zealand next year, we're in the brochure production stage, should we stop if we can't come back in 2021?'
“Far better to say it's unlikely we will be open for six months or it's unlikely we will be open for long term before Christmas,” Brady said.