Roberts: Tourism cannot be written off

9th April 2020 By Staff Reporter | news@tourismticker.com | @tourismticker

Tourism Industry Aoteroa chief executive, Chris Roberts, yesterday briefed MPs on the impact of Covid-19 outbreak and subsequent lockdown on the tourism industry – plus what is needed for it to successfully emerge from its “deep slumber.”

Here is his submission to the Epidemic Response Committee:

Chris Roberts

Tourism is not dead. But it is in a deep slumber. Words like dead, destroyed, decimated to describe tourism’s current state are not helpful.

New Zealand’s tourism offering remains as sound as ever. We have the natural assets, quality businesses and passionate tourism people. We don’t have customers – but they will be back.

Tourism is over 20% of our exports, 10% of GDP, supports almost 400,000 jobs. It can’t be written off. Every New Zealand community, every NZ family, will be worse off if we don’t work together to re-set and recover our industry.

Covid-19’s impact

Predicting the full impact is difficult, as we don’t yet know what will be possible later this year. But looking at the next six months (April-Sept) we would have expected around $18bn in total tourism spend. I’d suggest that may now be only $6bn – reflecting a $12bn drop in spend, or $2bn lost a month.

 However we are not predicting zero spend – there is some commercial accommodation being used by stranded visitors and returning New Zealanders. But across the board, revenue for TIA’s 200-plus member hotels was down by 57% in March and will be even harder hit this month. Most other tourism businesses have zero revenue.

Current priorities

The priorities here are the same that apply to tourism around the world

1. Assist our remaining visitors, for example with information and repatriation assistance
2. Protect our tourism workers with income support, and
3. Support business survival
4. Promote sector recovery, for example government and private sector dialogue, timely provision of data, co-ordinated policy responses for the short, medium and long-term

Visitors

At the end of March, there were 321,700 visa or ETA holders in the country (see breakdown of visits type below), with Australian visitors at top of those numbers. In total around 1,000 a day are leaving.

81,000 visitors

62,600 essential skills work visas

36,700 working holiday visas

82,200 student visas

48,400 family visas 

10,800 RSE scheme

Of these 300,000 plus visitors, 37,000 are registered with their embassies for repatriation flights.

There are issues for those with work visas and no job. They are not eligible for benefits but can’t easily get home either – 3000 people in Queenstown are getting civil defence emergency assistance – the Government has been looking at visa issues for several weeks and we need a decision on how going to care for these guests in our country.

Workers and Businesses

Many of our tourism businesses need to go into winter hibernation – cut costs to a minimum, and re-emerge when the first shoots of recovery begin to sprout.

The wage subsidy has been very welcome – it has given time for plans to be made. But we have already seen hundreds of job losses and when the wage subsidy ends, the layoffs will be substantial. We could easily see 100,000 jobs disappear.

Recovery

Across the world, the tourism industry and governments are needing to take aggressive and co-ordinated action – we must work together to build a more resilient and sustainable tourism industry.

The tourism industry is very diverse and characterised by a high percentage of SME/micro-businesses. Tourism sectors are very interdependent and an issue in one sub-sector, such as aviation, can have disastrous follow-on effects on the tourism value chain.

Emerging successfully from this crisis is not something the government can plan by itself. Industry needs to be – and wants to be – involved in the recovery planning.

The tourism minister has tasked Tourism New Zealand with leading a piece of work alongside Ministry of Business, Innovation and Employment and the Department of Conservation, and with industry stakeholders, to reimagine the way we govern Tourism. We look forward to active participation in that work.

The Epidemic Response Committee was established on 25 March to consider and report to the House on matters relating to the Government’s management of the pandemic. It is chaired by National leader Simon Bridges.