New Zealand is fully reopening to the world, but how prepared are we?


From 11:59pm on Sunday, tourists will be welcomed back to New Zealand. Economists think they might be our best shot at getting out of a recession, but operators say tourism’s recovery will be slow. Kelly Dennett reports.

When the Pacific Explorer docks at Auckland in two weeks Kevin O’Sullivan will be there welcoming passengers.

The New Zealand Cruise Association chief executive admits that in March 2020 – the last time cruise ships docked in New Zealand – he was calling the border closures a “short-term pause”.

“I had no expectation I would be sitting here in July 2022 waiting for the first ship to come back. It has been difficult, quite depressing at times, but onwards and upwards. I’m really looking forward to [welcoming the ships back].”

While Kiwis, and many Australians and Americans, have been propping up tourism since April and May, from 11:59pm on Sunday tourists and students not previously eligible under a visa waiver scheme to come to New Zealand can apply to land, and cruise ships can finally re-enter.

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The Pacific Explorer will dock in August, but the season will really pick up from October, and O’Sullivan says occupancy on even the larger ships is high – about 70-80% – while the smaller ones are full.

But it’s what tourists will find on dry land that worries O’Sullivan. He’s watched around him as hospitality and tourism groups struggle with staffing.

O’Sullivan is not the only one asking, after more than two years of no migration, skills shortages and sickness, will operators have the capacity to service tourists properly?

Scenic Hotel Group boss Karl Luxon said feedback from agents was that people were canceling because operators were struggling to find staff.

There are growing fears that tourism operators will struggle to cope with rising visitor numbers.

Alden Williams/Stuff

There are growing fears that tourism operators will struggle to cope with rising visitor numbers.

“When we speak to operators, they’re going, ‘we can’t find the tour bus driver and the guides’.”

General Travel executive director Anna Black was in Los Angeles this week, alongside Tourism New Zealand and other operators, touting Aotearoa as a place that’s open for tourism.

Feedback from agents there was positive, says Black, and that’s reflected in their bookings. The inbound tour operator is “really, really busy” for the rest of the year.

But, says Black: “We’re worried about service delivery. As the middle man, we are [only] working with operators we know and trust are going to make it happen.”

Kavinda Herath/Stuff

Tourism Minister Stuart Nash talks about New Zealand tourism in Queenstown. (First published March 2021)

Director of luxury service provider Southern Crossings, Sarah Farag, agrees.

“If we can’t get them a hotel room, a guide, a booking at a restaurant – if we’re not serviced at the level and standard we’re used to, we will say no first.

“What we need are guides who speak in different languages. we need more [workers] and we need them now… it’s very hard to turn the generator back on.”

It’s the glint of a jewel in the tourism crown that economists are pinning their hopes on to avoid a recession. Pre-pandemic, cruise visits were worth more than $500 million annually, of which $356 million was spent onshore.

About 3000 people enjoyed a day out on the mountain at Mt Hutt Ski Area on Thursday after it received half a meter of snow.  It was the first day the mountain was operating at full capacity this season.

Mt Hutt Ski Area/Supplied

About 3000 people enjoyed a day out on the mountain at Mt Hutt Ski Area on Thursday after it received half a meter of snow. It was the first day the mountain was operating at full capacity this season.

This week Infometrics principal economist Brad Olsen said tourism would drive a temporary and uneven bounce in economic activity over summer, and predicted it would push GDP growth. But even then, Olsen saw challenges ahead, suggesting visitor numbers could be hampered by the global economy and fuel prices.

“And the tourism sector could struggle to meet the lift in demand given the lack of available workers.”

Pre-Covid, New Zealand welcomed about 50,000 working holidaymakers annually, but by the end of June Immigration New Zealand had received 15,695 applications – of those only 10,146 had been approved.

The new Accredited Employer Work Visa, which took applications from July 4, which the government touted as a significant step forward in reconnecting New Zealand, had just 150 applicants so far.

Meanwhile, students have been unable to work and live here, and Kiwis are heading overseas to sunnier pastures.

A tourism industry report released on Friday revealed about a third of businesses were ready to cap occupancy or customer numbers, or reduce service or offerings, to cope. Half of those surveyed weren’t confident about attracting or retaining staff.

Brian Westwood, president of the Backpacker Youth and Adventure Tourism Association, says staffing will be the biggest handbrake for recovery and rejects calls that raising wages is the solution.

He says workers simply aren’t there, and businesses will have to adapt.

A tourist takes a photo near the Te Anau side of the Homer Tunnel.

Alden Williams/Stuff

A tourist takes a photo near the Te Anau side of the Homer Tunnel.

However, as tourists and locals have seen the world without crawling tourism, he believes demand for a more sustainable model is well-timed.

“A lot of consumers are going, ‘We don’t want to have that big an impact on the destinations we visit, how can we do it better?’”

Tourism Export Council chief executive Lynda Keene​ said the return of working holidaymakers “cannot come soon enough”.

“From a business viability perspective, there is still a long way to go for businesses to get in the black.

“Just because the border is now open does not mean businesses are back and trading to full capacity. This will take time.”

Airfare prices and airline timetables are concerns for some in NZ's tourism industry.

SUPPLY

Airfare prices and airline timetables are concerns for some in NZ’s tourism industry.

Keene said about winter, skiing destinations like Queenstown and Ruapehu had seen plenty of Australian tourists but other centers and regions, like the West Coast, Auckland, and Wellington, may experience more of a trickle.

Other concerns cited by industry members included airfare prices and restricted timetables, Immigration’s ability to keep up with the influx of visa applications, and the ratio of tourists who would be holding credit, meaning some business would not be new.

But, businesses were optimistic. Karl Luxon was busy planning to reopen the West Coast’s Te Waionui Forest Retreat, which had been shut for two years but was welcoming guests back in October, and Sarah Farag says challenges facing the industry are solvable: “There’s not much we can do about a closed border.”

Tourism Minister Stuart Nash said the border opening was a milestone in New Zealand’s reconnecting plan, and a $49 million Tourism Kick Start Fund would help businesses gear up.

Most travelers aged 17 and over will require proof of Covid-19 vaccination to holiday in New Zealand.

Additional reporting: Amanda Cropp.

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