Short staffing in Queenstown is costing millions as visitors leave with money unspent, and the rest of the country could face similar problems over summer

Tuesday, 16 August 2022

Queues for buses to ski at Coronet Peak and the Remarkables in Queenstown on July 4 went on and on ... and on and on...

Staffing shortages threaten to put a worrying dent in tourism earnings even if international visitors come in droves.

Economist Benje Patterson estimated that Queenstown-Lakes’ businesses missed out on $3 million in June, because lack of workers and reduced services meant visitors returned home with money unspent.

Over the course of a year, he said that unmet visitor demand could be worth $30m of lost spending for the region, and warns the rest of New Zealand could suffer the same fate over the summer if the labour crisis is not addressed smartly.

“Summer is our shot at beginning to recoup losses, but we don’t want to spoil things long-term by risking not being able to fully cater for all visitors in the manner and with the quality they desire.”

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Economist Benje Patterson says businesses need to better coordinate their opening hours, and even consider sharing staff, so visitors are not left disappointed at being unable to get bookings.

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Patterson’s June labour market snapshot for the Queenstown Lakes District Council showed many businesses operating 75% below capacity.

About 15,000 people were in central Queenstown for Welcome to Winter 2022 fireworks and celebrations, but the pressure is on to ensure businesses have sufficient staff to cater for the summer influx.

Although half expected demand to increase over the next three months, just 28% expected to increase their operating hours according, and only a quarter expected profitability to improve.

While the number of international visitors to Queenstown rose, their spending did not respond to the same extent, said Patterson, and that was not a healthy trend for a country wanting to attract high value tourists.

“We actually want spending growth to be rising significantly faster than the recovery of visitor numbers, and if it’s not, we have a problem.”

Kinross wine garden in the Gibbston Valley has cut back capacity in its wine garden, so service does not slip because of short-staffing. There were 858 jobs advertised in the Queenstown-Lakes area in June, more than twice the number for the same month in 2019.

Patterson said the Government should launch overseas campaigns targeting international workers, reduce visa costs, and speed up visa processing.

“Pre-Covid we had about 3000 people on work visas in Queenstown, now it’s down to about 1000.”

Better communication about tax codes would help overcome the perception that staff working multiple jobs would be “stung” with high tax on secondary income.

A June snapshot of the Queenstown-Lakes labour market showed 78% of businesses reported that skilled staff were hard to find, and 57% had difficulty filling unskilled positions.

But businesses needed to step up too, changing rosters so staff got blocks of days off to travel the region, offering perks such as free bungee-jumping or rafting trips, and looking after their wellbeing, so they stayed on an extra few months.

Patterson said employers also had to broaden their search to target parents wanting work during school hours, older residents and casual workers.

Wages on average had risen almost 9% over the past year in the Queenstown area, but payroll statistics showed that for temp workers the increase was 20%, and while that might be do-able for a couple of days over peak periods, it was not an affordable longer term option.

Kinross chief executive Nicky Sygrove has made the tough call to close her Gibbston Valley bistro four nights a week for the next month in a bid to maintain standards for daytime dining, and avoid worker burnout.

“I’ve just asked my maintenance guy to remove some of the tables from our wine garden to look after staff on Saturdays and Sundays which are really busy for us.

“We could keep saying yes, but that’s when people's experience drops, waits are long, they get frustrated and the guests and the staff have a bad time, and we are absolutely at that point.”

Sygrove is getting by using high school students to help out until visa holders she has hired are available, and staff accommodation being built on site will provide newcomers with somewhere to stay until they can find somewhere more permanent.

The Queenstown ski season is due to end in mid-October, and Patterson believes they are a potential source of staff for the hospitality and adventure tourism sector, if those workers can be persuaded to remain in the area.

“With 2000 odd ski field workers, even if 5% more than usual transitioned to summer [jobs], then that is 100 fewer people to find.”

NZ Ski chief executive Paul Anderson is already fielding calls from local recruiters desperate to snap up some of his 1376 workers spread across three ski fields.

He expects between 300 and 400 will be redeployed to the group’s other tourism operations – Ultimate Hikes on the Milford and Routeburn tracks, The Hermitage hotel at Mt Cook, and summer mountain biking and sightseeing at Coronet Peak.

Anderson said many overseas staff had returned home during the pandemic, and with a lot of new staff still in their first year here, “maybe they are keen to stay on and see New Zealand.”