Operators in anxious wait for Govt support package

17th March 2020 By Bridget O'Connell | bridget@tourismticker.com | @tourismticker

Operators from across the country have had a tumultuous 48 hours following the introduction of Saturday’s travel restrictions, dealing with cancellations, rationalising costs and studying cashflows.

The general consensus has been to wait for today’s government support package before making any “crazy, bold decisions”.

Matt Wong

Matt Wong, general manager of Queenstown’s iFly indoor skydive operation, which has been trading since August last year, said: “From a business perspective we’re looking at our overheads and cash flow and trying to restrict as much expenditure as we possibly can.

“We want to make sure that we can keep our staff employed. We’re looking at other overheads – whether it be sales and marketing spend, electricity spend, and we will be talking to our landlords at some stage about possible rent relief.”

Wong added that every small business and operation in Queenstown is feeling the impact of Saturday’s announcement, when Jacinda Ardern declared that from 1am Monday morning, all arrivals – barring those from the Pacific Islands – would need to self-isolate for 14 days and all cruise ship visits were suspended until 30 June.

For iFly, which has a short lead time for bookings and a lot of walk-ins, the full impact is expected to come through in the next few weeks.

“We still don’t know what impact the 14-day restriction will have because we’ve still got people in the country that are travelling right now.

“It will probably be from the end of this week onwards that we’ll see a massive decline in the numbers. I think our biggest challenge will be the loss from the Australian market. As long as we can get a bounce back in July from the winter school holidays we’ll probably be okay. But if it extends beyond that we’ll possibly be in trouble.”

Until then, Wong said that the business is “trying desperately” to protect its staff.

“We’re looking at areas where we can cut costs first but if we don’t get a solution from the government or some good news this week, then there could be a chance that we will have to have a look at labour costs.

“For now, the mood is not dire, but we do hope to get some good news later this week – it will have to be a very significant bit of good news for the whole industry to survive.”

Tour company Stray is another business which is waiting to hear what finance minister Grant Robertson announces today in a fiscal stimulus package which is expected to centre around jobs and cushioning industries such as tourism and hospitality which are suffering the most immediate effects of border restrictions.

Stray director, Brett Hudson, said his reaction to Saturday’s announcement was “shock but not surprise”.

The company, which primarily operates in the youth market, has responded to the travel restrictions by increasing flexibility within its booking terms and conditions.

“We already had some of the most flexible amendment rules in the market, which allowed people who book and pay today to travel anytime in the next twelve months, but we immediately pushed that out to two years.”

Hudson said the business is currently trying to rise to the challenge of “retaining every single booking”, adding the key is to continually innovate on the terms of travel and amendments.

“On Saturday the terms of travel amendment rules changed forever.”

Hudson pointed to the fact the youth sector is “resilient” and could be one of the first to bounce back, but in the short term the priority was “being responsible as we can be to customers and staff” as the business had to “box on”.

In this vein, the company was currently looking at “normal rationalisation” and no “crazy bold decisions” will be made “until the government’s role in this becomes clear.”

However, Hudson also acknowledging the fast-moving situation means that the opinions held and decisions taken today could be completely different in another few days.

Accommodation provider PurePods, which has six glass eco-cabins located in remote locations across New Zealand, said prior to Saturday it had a few cancellations from China or Italy that it could refill from its waitlist but the situation completely changed with Ardern’s announcement.

Chief executive Stephanie Hassall said bookings from April are now drying up and “there have been a bunch of people on the phone from Australia in tears” as they are having to cancel weddings and the following PurePod honeymoon stay.

With waitlists thinning out as the peak season recedes, Hassall said the company will be looking at the domestic market to fill the gaps. She said and the accommodation offers “the perfect isolation getaway.”

Operationally, the PurePods model of remote stays means that there is no close contact with guests. “We don’t have the same concerns as someone working at the front desk as a hotel, but nonetheless there is a plan in place regarding communication with guests and the team servicing PurePod locations day-by-day.”

It is also being flexible with bookings. Hassall said those who have had to cancel are typically looking to rebook for the same time the following year, however they don’t know exact dates.