17th April 2020 By Contributor
The former Wayfare chief executive and Tourism Industry Aotearoa chair on why selectively and safely re-opening international borders is crucial to reviving New Zealand’s tourism industry.
In early February, as a precaution against importing a novel coronavirus, New Zealand closed its borders to any foreigners arriving from China. For those of us working in tourism in Queenstown, the impact was almost immediate.
Chinese guests made up around 25% of our visitors over the Chinese New Year period, and while we still benefited from Chinese tourists already in New Zealand, by the end of February the impact was being felt widely, with daily revenues down more than 20% from the prior year.
Richard Lauder
Clearly worse was to come. On 19 March, New Zealand closed its borders entirely to anyone who wasn’t a New Zealand resident or citizen. In the company I worked for that was 80% of our market gone and we were, prior to that day, hosting more than one million international guests a year. Crisis meetings were held, services slashed and a significant majority of around 900 staff faced the prospect of facing a winter without employment.
Of course, then came the lockdown. Within a period of two months, we go from a 20% revenue hit, to 80% and then 100%. The toughest of times but the right move. I for one applaud the Government for their leadership. They also listened.
To support businesses, the government firstly offered wage support for 12 weeks, so long as staff were retained on 80% of their normal pay, but this was capped at $150,000 per business. So, that worked for small businesses with less than 20 staff but was hopeless if you employed 900. But the government listened, and a week later they removed the cap. Later they also softened on the “80% of normal pay” criteria, instead accepting company’s “best endeavours”. I know for a fact that this has secured thousands of jobs in Queenstown alone, at least for twelve weeks, until the support runs out.
This is the reason for writing this article.
As is entirely appropriate in these times, there has been substantial effort and focus right now on eliminating Covid-19 from New Zealand. And with the measures in place (if we stay at home – had to put that in somewhere) our little country at the bottom of the earth could well be successful. At some stage, we will either have no Covid-19 cases, or we will know of every case and every close contact of those cases, therefore having full knowledge of all those infected or at risk of being infected in New Zealand.
But how do we restart our important tourism economy, a sector bringing over $16bn of international spending each year, and directly supporting over 200,000 jobs? We can’t rely on the domestic market alone.
For me the solution is obvious. Instead of framing our Covid-19 response around closing our borders and keeping people out, let’s re-frame the question on whether the border is closed or open by asking under what criteria would we allow an open border with another country?
This is ultimately for Government to decide, but I think the decision would come down to two types of considerations or methods.
Firstly, are we confident that the country in consideration has, like us, either eliminated Covid-19, or has a very high level of knowledge of every case and their close contacts? If so, we may be able to trust that country’s government, and they can also trust us, that processes can be put in place that any person allowed to travel between our countries is Covid-19 free, and we can open the border.
The second method would be based on individual proof from all travellers that they do not have Covid-19. This is not without precedence. I have travelled to many parts of the world myself where I have had to prove I have been inoculated against yellow fever, typhoid and the like by presenting my yellow certificate. While the world doesn’t yet have a vaccination, we do now have rapid testing for Covid-19 which could be applied as part of border procedures, in the country of departure. As new high-speed testing methods are improved, departing a country Covid-19 free could mean just arriving at the airport an extra hour earlier to go through this additional screening.
So, tourists could either come from a country that we are certain operates with the same degree of rigour as New Zealand, or from an airport that provides certainty through departure point testing. And to add an additional level of assurance, we could also oblige all visitors to submit to digital tracking and contact tracing while in New Zealand, as is already being proposed.
What might this mean in practical terms? Based on published international data on Covid-19 cases, New Zealand could first look at China as a country which might meet the criteria for opening the border. At the time of writing, China has a similar number of active cases of coronavirus as New Zealand, with 300 times our population. If China can demonstrate to NZ with a high level of certainty that it knows of every case of infection in China, and thereby prevent any infected person or contacts with that person from travelling to NZ, we can confidently open the borders. As one of our largest trading partners and source of international tourists, the economic and political impact of such a move would be enormously valuable.
We could follow with evaluation of South Korea, Taiwan, Hong Kong and Singapore. All have lead the way in their control of the virus, and all have in the past had direct air links with New Zealand.
While it is a little early to tell from the data to date, our biggest source of guests and our biggest trading partner, Australia, might also within the next month or two be able to demonstrate its control of the pandemic and that it has complete knowledge of existing cases.
From a tourism perspective if we could open borders with China and Australia alone it would reestablish half of our international tourism market. Add the other Asian nations I have listed, brings it up to 60%.
I would also assert that these markets, subject to air connectivity, would be substantially boosted from prior year traveller demand levels as New Zealand would be seen as a friendly and safe place to go, not to mention it being one of a very limited number of options for international travel. As such, opening these borders alone might take us back to pre-Covid levels of international tourism activity.
Notwithstanding the significant economic benefits, from a purely social perspective, I think this is worth some consideration by Government, when hundreds of thousands of jobs are on the line as soon as government support ends in a couple of months. Without a re-ignition of international tourism, there will huge societal costs.
Let’s find a way to get international tourists funding tourism and hospitality jobs again like they used to do.
Originally published by Richard Lauder on LinkedIn.
