Tourism says many jobs will go despite $400m Budget rescue package

Thursday, 14 May 2020

Tourism businesses fear job losses could surpass 100,000.

The Budget's $400m tourism rescue package has received a mixed response with industry leaders warning a wave of job losses is on the way.

Tourism operators hanging out for the wage subsidy to be extended up to six months will get an extra eight weeks as part of a $3.2b investment from the Government, and that is on top of a separate $400m package for tourism.

Tourism Industry Aotearoa chief executive Chris Roberts said most tourism businesses would meet the wage subsidy criteria of a 50 per cent drop in revenue, but major redundancies were inevitable.

“Job losses could easily still be 100,000-plus … we are not going to be back to pre-Covid-19 employment levels for a very long time.'

Tourism Industry Aotearoa chief executive Chris Roberts had suggested the Government use money raised by the international visitor levy to assist struggling operators and is pleased money has been set aside it the Budget to do that.

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Roberts said he was heartened by the fact that Minister of Tourism Kelvin Davis had made it clear the $400m for tourism was just the start, and additional support would be rolled out over the coming months.

The New Zealand Hotel Owners Association (NZHOA) described the Budget as ‘industry-breaking’ for the hotel sector and falling well short of the financial relief that was so desperately needed.

NZHOA chief executive Amy Robens said that once the wage subsidy extension ended, there would be another wave of redundancies.

Her organisation had sought redundancy financing to offset the significant lay-off costs hotel owners were now facing.

“The domestic market will not provide the critical mass that’s needed to get hotels back on their feet, and we remain in serious survival mode.'

Tourism Export Council chief executive Lynda Keene said the subsidy decision was “immensely disappointing” because the extension did not get businesses through to spring when they started work for next year’s bookings.

“The recovery package does not help tourism businesses that needed a cash flow injection to help with commercial rents, leases, and operating costs. We asked for this and Government has not delivered.'

Aviation tourism operators were hoping for help to cover maintenance and staffing costs while they were grounded by the lack of international visitors for scenic flights.

Other Budget measures will also touch on tourism, such as $1.1b for the Department of Conservation to create 11,000 jobs to enhance the environment, and Roberts said that would provide employment opportunities for displaced tourism workers, particularly in the regions.

A $1.6 billion training package offers free vocational training for all New Zealanders over the next two years, and that included retraining 10,000 hospitality and aviation sector workers for primary industries.

But Louisa Patterson, chief executive of Queenstown helicopter company Over The Top, said the aviation tourism industry was keen to retain as many of its experienced staff as possible.,

“It's all very well retraining people, but when the music starts again, we won't have any band members; if we lose these people it will be crippling for general aviation in New Zealand.

The Budget recovery package will fund a tourism assets plan to identify and protect key visitors attractions and amenities that draw visitors to the regions.

There is also a tourism transitions programme to advise and support businesses trying to decide whether to go into hibernation, or wanting to switch from international to domestic and Australian markets,

Keene said that did not help inbound operators.

“The big winners from the tourism recovery package will be consultants, and the big losers will be inbound tour operators and those businesses that had more than 80 per cent international visitors.

A tourism recovery ministers group will be set up, alongside a public-private taskforce - made up of representatives from government agencies and the tourism sector - to shape the future of the industry

Ashley Cassin of Glacier Country promotions estimated 200 people in Franz Josef had already lost their jobs as a result of the downturn in visitors, and he said there was a risk the various working groups would turn into a talk fest.

Rapid progress was needed and the package, together with the recent launch of a domestic tourism campaign was at least a start.

“It was never going to go far enough, but something is better than nothing,” said Cassin.