Make or break Budget for decimated tourism businesses
ANALYSIS: The tourism industry is on tenterhooks over a promised Budget rescue package in hopes it will help prevent more business closures.
Tourism Minister Kelvin Davis has copped criticism for his low profile and Thursday’s Budget will show how well he has advocated for a sector that could lose more than 100,000 jobs if the worst comes to pass.
The long tourism industry wish list includes a three month (at least) extension of the wage subsidy, help with rents and other fixed costs, lower compliance costs, and a holiday from Government charges such as Department of Conservation concessions.
According to Statistics NZ, as of February last year 36,681 tourism-related business employed 410,000 people, and it is still unclear how many will still be around when international travel eventually resumes.
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There is pressure to spend tourism’s share of the $35 a head international visitor levy on ensuring previously viable businesses do not go under permanently.
The damage inflicted by border closures has already seen thousands of jobs go from stalwarts such as Ngai Tahu Tourism, Hobbiton, and Skyline Enterprises.
Tourism New Zealand has just done a low-key launch of what will be a major campaign to get Kiwis to holiday here, focussing initially on safe travel in alert level 2.
But chief executive Stephen England-Hall admits income from it is unlikely to match the $9b New Zealanders spent on overseas trips last year, or make up for the $17b spent by international visitors.
He said he did not know what the Budget held for his agency, which has been tasked with stimulating the domestic market on top of keeping New Zealand’s international profile alive.
Last year TNZ had its $111m budget trimmed by more than $6m, and England-Hall said it was also unlikely to get anywhere near the $20m it received through partnerships with now cash-strapped airlines, airport companies and major operators.
While TNZ will do the financial heavy lifting via national media and social media campaigns, the 31 regional tourism organisations (RTOs) will also be expected to stump up for their ongoing work.
RTO New Zealand chief executive Charlie Ives said 86 per cent of RTO funding came from local authorities, and the worry was that councils would now have less money to devote to tourism promotion, so here was considerable interest in the Budget.
Every sector of the tourism industry is begging for assistance.
New Zealand-based inbound travel operators were responsible for 1.3m international visitors last year.
They are seeking grants, rather than loans, so they remain viable and can continue filling the future “pipeline” of visitors when borders open.
The events industry and has had to postpone or cancel in the vicinity of 1000 conferences, business meetings and seminars, and it is worried about limits on gatherings under Covid-19.
Aviation and marine tourism operators face huge costs to maintain boats and aircraft, pay regulatory charges and try to hold onto highly qualified staff without whom their transport licences would be void.
Those that can keep their doors open, albeit in a more limited way, also face the prospect of reducing their ticket prices to attract Kiwi customers in the midst of a recession.
Tourism Minister Kevin Davis has stuck rigidly to his message that not all businesses can be saved and claims he has diligently fed back industry concerns to his Cabinet colleagues.
He has regularly sidestepped questions about the fate of migrant workers, rent relief, the wage subsidy, and other issues as being outside his policy brief.
His failure to deliver more timely help has disappointed many in the industry including Tourism Ticker news website founder Paul Yandall.
He described Davis’ refusal to reveal any detail on the Budget package as “treating the sector like a child told to ‘wait until dinner’ “.
In an interview with Stuff last week Davis stressed his willingness to listen and described recent zoom meetings with more than 3000 operators all over the country.
But a senior industry member who attended one of those meetings described it as a waste of time.
“It was awful, he’s a nice guy, but he’s totally out of his depth.”
Thursday’s Budget may prove whether that is the case.