TECNZ: ITOs “failed by Govt”

15th May 2020 By Bridget O'Connell | bridget@tourismticker.com | @tourismticker

Tourism businesses at the sharp end of dramatic drop in international tourism say they have been “failed by government” and expressed “immense disappointment” at yesterday’s Budget 2020.

Tourism Export Council New Zealand chief executive, Lynda Keene, called yesterday a “sad day” for all businesses involved in the international tourism sector including the association’s inbound tour operator membership.

Lynda Keene

“Tourism touches every part of the national economy. The Government has failed the international tourism sector and appears to have given up on an industry that has produced so much for the NZ economy and society. How hard can it be to understand?” she said.

She questioned how the government could not provide specific support for the inbound tour sector which “has brought millions of international visitors into New Zealand and helped drive the economic prosperity of New Zealand for over 30 years, delivering $1.8bn of GST last year, and $17.8bn of GDP and international receipt contributions last year.”

“How can Government let this pipeline of future business through inbound tour operators wither away? Every third international visitor arriving in New Zealand is booked through an inbound tour operator.”

Keene criticised a lack of detail in the $400m tourism recovery fund which includes a tourism transition program and strategic assets protection program saying there is “no tourism plan attached to it with timeframes on when markets will rebound and the cost it might take to attract visitors back.”

It also failed tourism businesses that needed a cashflow injection to help with commercial rents and leases operating costs, Keene said.

On the wage subsidy extension, Keene said it was a welcome measure but eight weeks would not be long enough for ITOs to get through winter into spring when booking activity traditionally started again in earnest.

Tourism Industry Aotearoa had a more positive reading of Budget 2020, which it said sent “good signals that the Government has recognised the industry’s needs and will be an active partner in its recovery,” but made clear further support measures would be required in addition to the wage subsidy extension and $400m recovery fund.

“The Government has recognised the critical importance of the tourism industry to New Zealand’s future. Tourism was the first industry to be hit by the impacts of Covid-19 and will be the last to recover,” TIA chief executive Chris Roberts said.

“The Budget package will not be enough to prevent significant job losses across the industry. In terms of immediate survival, the measures announced today are welcome but further initiatives will be required in the months and years ahead.”

Roberts said an extension to the wage subsidy had been top of the request list for many tourism businesses, and almost all be able to meet the new qualification of showing at least a 50% drop in revenue, but acknowledge “some will be disappointed it is only for an additional eight weeks”.

This was a sentiment shared by chief executive of Hamilton & Waikato Tourism, Jason Dawson, who said the region’s tourism businesses had been “bleeding cash” trying to reduce overhead costs and using up their cash reserves or personal savings to stay afloat, could easily show a 50% reduction in revenue to meet the revised criteria.

He added: “The eight-week extension to the wage subsidy will help ease the pain and hopefully keep more people in the sector in the short-term. However, further initiatives will be required in the months ahead to prevent significant job losses.”

“Our people are our number one asset and retention is our key priority. They are experienced, talented, qualified and passionate for our industry. Without people, tourism and events is not a viable business model,” he added.

The Budget also mooted the formation of a Tourism Recovery Ministers Group and a public-private New Zealand Futures Tourism Taskforce as part of the $400m recovery package.

These, TIA said, were “important signals that the Government takes the survival of our tourism industry seriously”, and the taskforce to advise ministers “will have a crucial role to play in advising Government on the long-term recovery and reimagining of tourism.”