Tourism is gagging for the Aussie bubble but benefits will be mixed

 

Analysis: For months the trans-Tasman travel bubble has seemed like a mirage that disappears just as we close in on it.

Like the rest of tourism industry, Auckland’s Cordis hotel managing director Franz Mascarenhas is hanging out for Tuesday’s announcement on the date for opening a quarantine-free border with Australia.

He has about 500 rooms booked by two large groups of Australians coming on corporate incentive or “reward” trips that will provide much needed business in a city where occupancy rates have been abysmal for hotels without managed isolation contracts.

Border closure pain was also clearly evident when half the 923 tourism businesses responding to a recent national survey said they would temporarily mothball or permanently close their businesses if things did not improve in the next 12 months.

Tourism New Zealand has talked up bubble benefits, suggesting Australian visitors could pump $1 billion into the economy this year, and it says 2.6 million of them considering a trip here had indicated they would come within six months of the border opening.

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Tourism NZ interim chief executive René de Monchy readily admits not all of those good intentions will translate to bums on aircraft seats, and while those that do come will be a much-needed shot in the arm for the industry, the benefits may be patchy and take some time to materialise.

“I don’t think there will be a mad dash of people coming here immediately, I think it will take some time for people to make that commitment.”

Even if a rapid border opening is achieved following Tuesday’s announcement, the timing as we head into winter could mean regional destinations, such as the West Coast, may not see too many Aussies until spring.

However, Scenic Hotel Group general manager Brendan Taylor says if visitor volumes allow, they will reopen three of their four mothballed hotels in Franz Josef, Fox Glacier and Dunedin.

Snow business

Initially quarantine-free arrivals from Australia are likely to be people visiting friends and family.

They are not usually big spenders on tourism activities, and the real economic boost will come from business and leisure travellers, including skiers.

Historically up to 70,000 Australians came here annually for ski holidays and in the peak winter season up to 2000 passengers a day flew into Queenstown Airport on direct trans-Tasman services.

NZ Ski general manager Paul Anderson says Australian skiers are eager to hit our slopes this year, and they have already hoovered up most of the 4000 tickets sold for Snow Machine, a September music festival hosted by Coronet Park and The Remarkables ski fields.

A lot comes down to propensity for risk and Anderson believes family groups will be wary of being caught by a snap lock-down or being locked out of returning to their home-state.

He says tourism operators are desperate for more detail on exactly how the trans-Tasman bubble will work, so they can plan ahead.

For example, will the opening up rely on X-number of days without any community transition, how will it work with different Australian states, and what’s the position on letting in critical workers?

“There are a lot of things we’re flying blind on.”

Business events boost

Winter is meeting season for businesses and professional associations, and in 2019 Australian delegates spent $225m here, staying four nights on average in the area where the event was held and another two elsewhere.

Business Events Industry Aotearoa chief executive Lisa Hopkins says they have identified $38 million in direct spend from Australian-based conference organisers looking to host events in New Zealand between July and the end of next year.

The incentive market is also looking promising while other popular destinations, such as Bali and Thailand, are off limits for Australian corporates looking to reward their star performers.

Wayfare chief executive Stephen England-Hall says our sterling efforts of coping with Covid are paying off, and he is already seeing evidence of Australian businesses seeking safe places to send their staff.

“We’ve had an enquiry from one group that were looking to go to Acapulco in South America in 2022, now they’re looking at Australia and New Zealand, so we might see more of that stuff in the short term.”

Cruises canned for now, bus tours back

Historically Australians made up about half the passengers on cruise ships plying New Zealand waters before the pandemic struck and an outbreak of Covid-19 aboard the Ruby Princess led to community spread here.

Efforts to get Kiwis-only cruises around New Zealand foundered earlier this year, and Cruise Association chief executive Kevin O’Sullivan says cruise ships won’t be back until the Maritime Border Order banning them is rescinded or amended.

“Without an end date for this regulation, Government seems to be prepared to let it drift on. It’s a major item for us to discuss with the Minister of Tourism and agencies.”

Scott Cleaver is the general manager of inbound tour operator The Travel Corporation, and he says they will offer bus tour packages before winter if there is sufficient demand, which will help prop up the many small regional businesses they visit.

Australians used to make up almost three quarters of customers on Contiki’s New Zealand trips aimed at 18 to 35-year-olds, but Cleaver says there is also a lot of interest in bus tours from older age groups, despite concerns about access to vaccinations and health insurance.

Pacific Tourways general manager Doug Kirk is finding that too. “Older people have been sitting there for the past year, the clock is ticking, and they realise that every year is important … [they’re] saying ‘what, the hell, let’s get out there and do it if we can.’ ”

Kirk says Australian school groups who brought students here on ski packages are keen to return. “One or two schools have said ‘no we’re not taking the risk, and have pulled out, the rest are hanging on.”

Beating backpacker blues

The country’s 300 backpacker hostels were already struggling pre-pandemic.

In February, usually peak time, occupancy rates nationally were 34 per cent, and down to a dire 16 per cent in Rotorua, Ruapehu and the West Coast.

Queenstown hostel owner Brett Duncan can’t see much respite until spring, apart from areas offering seasonal work, and centres getting direct flights from Australia.

He sits on the board of the Backpacker Youth and Adventure Tourism Association and he has no illusions about how serious things are with about 20 hostels now closed, and at least that many again on the market.

Younger travellers have a reputation for resilience, so Duncan hopes Aussie students hankering for a ski holiday are less likely to be put off by the chance of being caught in a snap lock down, and he says young professionals can always sit it out working remotely.

“I’d be saying ‘pack your laptop,’ if the border closes it will be for days not weeks, and they can easily work remotely from here.”

Duncan says New Zealand should encourage the 44,000 foreign working holiday visa holders still in Australia to cross the Tasman, and the association is lobbying Immigration New Zealand to find a way of prioritising their visa applications.

As well as spending on travel, they can also fill vacant hospitality and tourism jobs.

“This year in Queenstown we’re facing a winter season with less than half the amount of working holiday visa holders [left] to fill positions, and yet we’ll have a travel bubble with Australia, so we’ll be a lot busier.”

The long wait

Stephen Norris and wife Kate own Te Anau-based Trips and Tramps which runs guided walks on the Milford and Kepler Tracks.

Winters in Fiordland are always quiet, and Norris says Australian arrivals won’t make much impact until spring when half-day guided walks for bus tour companies start to pick up.

Pre-Covid, North America was their main source of customers, and he says that business is unlikely to return until next year at the earliest.

“It’s like throwing a dart at a dart board. When I see Americans climb off a plane and touch New Zealand soil I’ll believe it.”

Lean times are also far from over for inbound tour operators (ITOs) selling packages for long haul markets.

Tim Reid of Southern World Travel says the Trans-Tasman bubble will only help those that work in Australia, and not the 60 per cent focussed on visitors from Europe and North America.

“For a majority of New Zealand-based ITOs, the Australian bubble will mean little to them, apart from being a stepping stone to opening the long haul borders.”

Forward international bookings from January 2022 into 2023 are looking healthy and a lot of clients with travel disrupted by the pandemic opted to postpone rather than cancel.

“We’ve kept 70 to 80 per cent and moved it from last summer to next summer.”

That said, Reid is worried about losing clients who won’t stomach another delay if the New Zealand border remains closed, and the real crunch will come if Australia opens up to wider international travel before we do.

Post-Covid, up to 60 per cent of customers booked “dual” itineraries covering both countries, and Reid fears international visitors will choose an Aussie-only trip if New Zealand borders do not reopen in time.