$17m invested in teaching tourism how to attract Kiwis

Wednesday, 22 July 2020

The Government has chipped in an extra $10 million to help tourism businesses cope with the loss of overseas visitors.

The Government is pouring millions into tourism businesses hit by the prolonged border closure.

The so-called “transitions” fund now stands at $17m, and so far 723 out of more than 20,000 tourism operators have taken up the offer of up to $5000 worth of professional advice.

Some have dubbed the scheme a waste of money, while others claim it has saved them from going under.

Auckland Sea Kayaking owner Nic Mead said the advice he received helped him re-jig his business by concentrating on schools, the Duke of Edinburgh programme and social clubs, rather than relying on overseas tourists.

* Tourism job losses predicted to peak at 92,000 this year

* AJ Hackett Bungy to receive millions from government

Auckland Sea Kayaks owner Nic Mead used to rely on taking overseas visitors on trips around the Hauraki Gulf. He now aims to completely reverse his previous customer base so it is 70 per cent local.

“Instead of being gloom and doom it changed us to more of a survive and thrive mentality.”

Mead said that pre-Covid-19, international tourism was “low hanging fruit” with bookings coming through online travel agents and Tripadvisor, and they had to rethink their promotions to attract New Zealanders.

In future he was determined that overseas visitors would be the cream, and not the backbone of his business.

iFly Queenstown has halved its prices from $149 to $89 to attract Kiwi customers.

General manager of iFly Queenstown Matt Wong said the advisory service had pushed him to tap the domestic market by heavily reducing prices, and last week they had 1300 customers, twice as many as the same time last year.

Previously the iFly wind tunnel simulating sky dive flying had largely survived on international custom.

“We never really considered the domestic market …. we had it easy, internationals didn’t much look at the price, they just spent money.”

Jacqui Wilkinson says consultants advising SMEs don't necessarily have expertise in tourism and some businesses would rather receive the $5000 in cash.

Wong said they were now targeting schools visiting Queenstown for geography study trips, business team building groups, and advanced sky divers who wanted to train in the wind tunnel instead of jumping out of a plane.

In announcing the extra funding Tourism Minister Kelvin Davis said it would help up to 3000 small and medium tourism businesses (SMEs), many of whom had fewer than 20 employees.

Most of those registered had sought advice on planning, switching to a local market, and digital marketing.

So far 61 had requested advice on mothballing their operations while the borders remained closed.

Advice will now be available through the regional business partners network, as well as Qualmark which had employed the services of major accountancy firms such as Deloitte.

Jacqui Wilkinson is the spokesperson for Reset, a group of about 350 small tourism SMEs, and she runs Adventure Capital, an Auckland-based hiking and cycle tour business.

She said the transitions scheme was well-intentioned, but missed the mark because it had been rushed.

Many SMEs had not found the scheme helpful because they had already done much of what the consultants suggested, and some advisors from big accounting firms lacked any experience in the tourism sector.

In her own case, Wilkinson said got a telephone call, two 1.5 hour workshops and a document summarising what was discussed, but given a choice she would have spent the money on a domestic digital marketing campaign.

The criticism comes amid questions about the Government’s plan to spend most of the $400m tourism rescue package propping up key tourism companies.

The money was supposed to be distributed by the end of July, but so far just three operators deemed to be strategic assets have been announced – AJ Hackett Bungy, Tourism Holdings Discover Waitomo and Kaikoura Whale Watch.