Tourism industry cries foul over the $311m Covid aid package

Monday, 3 August 2020

The $400m set aside to support tourism in the Budget has now been fully committed.

The tourism industry is “underwhelmed” by the Government’s latest aid package and some operators are demanding to know why they missed out.

The $311m in funding announced on Saturday included grants of up to $500,000 and low interest loans for 126 tourism businesses chosen as “strategic assets.”

The controversial scheme is copping mounting criticism with only 51 recipients identified so far, and the remaining “winners” to be named once they have confirmed acceptance of the support offer.

A spokesman for Tourism Minister Kelvin Davis said there was no deadline for acceptance, and no decision had been made at this stage on whether to reallocate the money if chosen recipients opted not to take it.

**READ MORE:

About 300 businesses applied for funding designed to save key tourism businesses and Southern Alps Guiding owner Charlie Hobbs was among the 175 applicants turned down.

* Tourism Export Council 'immensely disappointed' by $311m industry aid package

* Tourism awaits funding news after criticism of 'Hackett cash'

* Tourism rescue package upped from $100m to $400m

Fox Glacier Guiding, pictured here, Alpine Guides Aoraki and Ngāi Tahu-owned Franz Josef Glacier Guides have been recognised as strategic assets.

* No guarantees for millions given to big tourism companies

Southern Alps Guiding owner Charlie Hobbs was bitterly disappointed to learn his application had been rejected, while two other direct competitors were successful.

Active Adventures is questioning the process for deciding which tourism ventures are awarded financial assistance.

He said he did not begrudge Fox Glacier Guiding and Alpine Guides Aoraki getting grants, but he has written to Davis seeking a review of the decision to deny funding for his Aoraki Mt Cook-based business.

“It’s hard to take knowing my tax payer money is going to support my direct competition against what business our company can get over these uncertain times.

“Our company is the second biggest commercial employer of staff in the [Mt Cook] village, second only to the Hermitage, and also owns considerable infrastructure in the village, while the other guiding companies do not.”

An estimated 2000 travel agency staff have lost their jobs as a result of the Coronavirus pandemic. Flight Centre New Zealand announced last week it would lay off about 230 furloughed staff.

Active Adventures chief executive Wendy van Lieshout has asked MBIE to explain why her application was declined when that of a similar company was granted.

“The only difference is that they do day tours, and we do multi-day tours.”

Pre-pandemic, Active Adventures’ fleet of buses and 40 guides took 2000 overseas travellers annually on tours around the country.

Tourism’s $400 million rescue package has copped some flak from smaller businesses.

Van Lieshout said the Ministry of Business, Innovation and Employment assured her the company was eligible for the strategic assets' money, and it is not clear whether they qualified for $20m in loans available to inbound operators.

Tourism Industry Aotearoa chief executive Chris Roberts said the $500,000 cap on grants was a surprise (earlier cash grants to three operators were up to $5m), and businesses on restricted incomes would be reluctant to take on loans they had to repay.

“The package is fine, as far as it goes, but it cannot be the end.

“We accept that not every tourism business will survive this crisis, not every job can be saved, but in partnership with the Government, we can limit the damage,” Roberts said.

The Government has ruled out extending the wage subsidy, and he said industry job losses, already standing at 13,500 among TIA members, could exceed 100,000.

The package had nothing for travel agents handling outbound travel cancellations, and the Travel Agents Association of New Zealand (TAANZ) is continuing to lobby the Government over that omission.

TAANZ chief executive Andrew Olsen said his members were not visitor attractions, so they were ineligible for the strategic assets scheme, and he was “gutted” for those now forced to make staff redundant.

He estimated about 2000 travel agency workers had lost their jobs, another 1000 could go when the wage subsidy ended.

There was still $2 billion worth customer funds held in credits or waiting to be refunded, and if agencies were forced to simply close their doors, the impact of customers would be ugly.

“The agent manages the contract the customer has with the supplier, and if the agent isn’t around, who will manage the credit or the refund, let alone the holiday or business trip, when borders open?”