21st August 2020 By Paul Yandall | paul@tourismticker.com | @tourismticker
Tourism New Zealand is helping guide the allocation of loans to struggling inbound tour operators, says tourism minister Kelvin Davis.
The agency had drawn up a list of recommended ITOs for the Tourism Recovery Ministers to consider supporting through the Strategic Tourism Assets Protection Programme.
However, Davis was adamant that targeted support for inbounders would only be provided through a $20m fund for low-interest, long-term loans from the STAPP.
There would not be any grants like the ones provided by the STAPP for 126 of the country’s tourism businesses, most of them attractions or activity providers.
Kelvin Davis
Following the liquidation of 25-year-old Naturally New Zealand Holidays, and the growing fear that many inbounders in the sector would follow, the Ticker asked the minister to explain the Government’s position on support for ITOs.
Below is Davis’ full reply:
We know Covid-19 is taking a heavy toll on our tourism industry.
Right from the early stages of the pandemic, we’ve been doing what it takes to cushion the blow, support businesses and workers, and position the tourism sector and the economy for recovery.
Inbound tour operators are a key link between overseas wholesalers and travel sellers, so through the Strategic Tourism Assets Protection Programme (STAPP) we are offering the ITO sector up to $20m in loans, so they can be prepared for when international travel resumes.
ITOs do not operate physical assets that attract visitors to regions, so they differ from most STAPP applicants.
Providing loans will ensure that ITOs make a commercial decision about the viability of continuing operations in a Covid-19 reality where international visitor markets will not reopen until health risks can be managed.
Loans will be offered with favourable terms and an extended repayment period to a selection of ITOs which are assessed to be of strategic importance and provide coverage of key overseas markets.
It will be up to individual ITOs to make commercial decisions regarding whether the loan arrangements suit their current and prospective operating environment.
Tourism New Zealand have provided recommendations about how the funding for ITOs should be allocated. TNZ have in-depth knowledge and experience of the key ITOs active in our major visitor markets and their recommendations cover a wide range of markets and market segments, and reflect the value, rather than volume, generated by ITOs.
The Tourism Recovery Ministers group is reviewing the advice provided and hope to make decisions next week.
The support won’t save all tourism businesses, and it hasn’t been designed to do so.
The intention of the STAPP is to protect the assets in the tourism landscape that form the core of our essential tourism offerings to ensure their survival through the disruption caused by Covid-19.
Some businesses will need to hibernate, change their product or service offering, or may need to close.
I feel for these businesses and the Government has provided a range of broad-based economic support, as well as targeted support to help tourism businesses transition. $17m has gone towards a Tourism Transitions Programme – a free service that offers a range of expert advice and strategy.
Around a thousand tourism businesses have already signed up, and we estimate up to 3,000 more tourism SMEs will be supported through this programme.
Kelvin Davis
Minister of Tourism
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