Coronavirus: Almost 300 tourism businesses at 'high risk' of closing

Friday, 15 May 2020

A third of surveyed businesses had mothballed assets and operations, including some high profile players such as Ngāi Tahu Tourism.

A survey of tourism businesses confirmed the dire state of the industry and found almost 300 were at high risk of shutting their doors.

Tourism New Zealand conducted the survey to gauge how the coronavirus crisis was affecting the sector, and chief executive Stephen England-Hall said it helped shape the $400 million rescue package announced in Thursday's Budget.

Three quarters of the 1619 respondents had made drastic changes to their businesses in order to survive, almost a fifth were at high risk of ceasing operations, and 16 had already closed.

The survey also confirmed large scale job losses — 37 per cent had cut staff and businesses were expecting to lay off a further 21,381.

A Tourism New Zealand survey found 1509 operators expected to lay off 21,381 staff. SkyCity recently announced it will axe another 700 jobs due to Covid-19.

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The Budget business package was widely regarded as too little too late by many in the industry who were deeply disappointed by the eight-week extension to the wage subsidy.

Dive Tutukaka's trips to the Poor Knights Islands Marine Reserve are an example of regionally important tourism attractions that could be in line for special assistance to ensure they come through the Covid-19 recession.

Most survey respondents were receiving the subsidy and only 10 per cent has accessed the government business finance scheme.

England-Hall put a positive spin on the survey results, saying that close to 90 per cent of businesses were confident they could adapt their product to appeal to the domestic market.

The majority planned to return to work as demand ramped up, and only 16 per cent would quickly restart at original operation levels.

Decisions about future operations were based on decreased domestic alert levels, the border reopening, the start of the summer season, and large cultural and sporting events resuming.

There were major concerns about the number and spending power of customers.

England-Hall said that despite the tough road ahead, he was confident New Zealand would have a viable tourism economy.

“It’s vital that we coninue to support those who need it, so that when activity does resume, there is a sector to return to.”

For that reason, the rescue package includes advice for businesses on whether to mothball their operations, or adapt them to cater for local and Australian customers.

There is also funding to protect key tourism assets that have helped prop up regional economies, with Kaikoura Whale Watch and Dive Tutukaka in Northland cited as examples.

But it was not spelt out exactly how the $400 billion will be divided up between the various initiatives.

Tourism Minister Kelvin Davis' office has confirmed a major domestic tourism campaign to persuade Kiwis to holiday at home was not part of the Budget package, as a media release on Thursday suggested, and it will be financed from Tourism New Zealand Tourism's $111m budget.

Davis' office also said a tourism recovery ministers group would decide how the $400m was spent, with a report expected next week on criteria for the asset protection funding.