Covid 19 coronavirus: Epidemic Response Committee listens to tourism players and minister

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Aotearoa chief executive of the tourism industry, Chris Roberts, says it is now about the survival of the tourism sector.

He appeared before the Epidemic Response Committee, which listened to key actors in the tourism sector.

He said that 40 percent of all hotels in New Zealand are closed at the moment.
Job loss varies from 55 to 85 percent across the hotel sector.

Roberts says 100,000 jobs will disappear in the tourism sector.

And he said there will be a “wave of people” fired in June, when the wage subsidy scheme expires, if not enough support is provided in the budget.

But the government’s decision to allow domestic travel at level 2 will save thousands of jobs.

However, this will not be enough to save the sector.

While it’s good news, with the fate of many events across the country still uncertain, that will decrease the total number of trips.

Roberts said that most tour operators have suffered at least a 70 percent loss in revenue.

In addition to an extension of the wage subsidy scheme, it requested a fee surcharge for operators and a more specific scheme.

He said the government needed to focus on helping boost domestic spending.
The government must provide so much clarity around opening the borders.

“We are not going to see any substantial tourist activity until at least October.”

He asked government departments not to cancel their small meetings and conferences later in the year, and asked for more clarity on the collection of rules.

Picton-based Managing Director of Sounds Air Andrew Crawford also appeared before the committee and told parliamentarians that the business would not survive without further government assistance.

The business faced $ 500,000 a month in costs, but with no income.

Crawford told parliamentarians that his business cannot survive without further government support.

Sounds Air has 85 employees and has adopted the wage subsidy scheme.
“These are very difficult times,” said Crawford.

Even entering level 2, the business is still suffering. This despite the Sounds opening for reservations again this morning.

There are promising early signs, he said, and Crawford expects demand to continue.

At level 2, he said that passengers will be required to wear face masks on Sounds flights, which will be provided by the airline. He said this was despite the fact that there are no tips from regulators to do so.

Crawford was open to work with Air New Zealand when the sector begins to reopen, but has not yet been able to speak to the airline.

When asked what he wanted to see in Thursday’s Budget, he said it was very important that the wage subsidy scheme continue.

The Epidemic Response Committee heard tourism leaders and Minister Kelvin Davis this morning. Tourism has been one of the industries most affected by the Covid-19 pandemic.

Pan Pacific Travel Managing Director Matt Brady also appeared, telling MPs that, unfortunately, the business could have “done” on Covid-19.

He said that Pan Pacific, like many other operators, was operating with zero revenue.

“We cannot survive 12 months without significant help,” he said.
That kind of support will have to be targeted, which means the wage subsidy and more support on top of that.

Brady said that as soon as Prime Minister Jacinda Ardern said at a press conference that the borders would be closed for “a long time,” she saw a wave of cancellations.

A major problem for him and other tour operators was the lack of certainty.

He asked the government to establish a specific timetable for the reopening of the borders.

He said he was hopeful of a rebound in the future, when potential foreign visitors were searching for vacation destinations, but said it would be a long time coming.

Sudima Hotels chief operating officer Les Morgan told the committee that the hotelier has had to cut his staff by 80 percent due to Covid-19.

Before the pandemic, Sudima had 550 employees, now only 110.

And the hotelier was down to just 20 percent in revenue, compared to the days before Covid.
That income comes almost exclusively from the Ministry of Health, which pays Sudima to quarantine people infected with Covid-19.

“We are hanging on a thin thread.”

It is asking the government for interest-free loans for another four or five years.

In fact, he said it could take four to five years for the hotel chain to return to the days before Covid.

Request specific assistance, as well as an extension of the salary subsidy scheme.
Morgan was also looking for a rate relief: “We paid a lot of fees.”

First in this morning’s session was New Zealand’s Executive Director of Tourism, Pania Tyson-Nathan.
He called Tourism Minister Kelvin Davis over comments he made that could be damaging to the sector.

“We are both not good at public speaking,” he said when asked about the minister’s comments.

Davis had previously said that now was not a good time to start a tourism business.
Tyson-Nathan said he disagreed with those comments.

She said the government needed to do more for tourism, not the other way around.

In fact, he said, many Maori tour operators were suffering.

She said that many operators are reusing their businesses and some businesses that used to be rivals were now working together.

But, he said, there was still optimism: “Many people see hope for the future.”

He asked the government to do “everything it can” to create a buffer for the sector.

“We need the wage subsidy,” he said, adding that there were “significant” liquidity problems.

Meanwhile, he urged parliamentarians to analyze compliance costs, as that was hurting many operators.

“What we need is a free year, not a year to pay them,” he said of compliance fees.

It was the same with things like health and safety regulation costs.

She said she was “mortified” by the kind of costs that companies have to pay.

These costs run counter to productivity, he said.

When asked about job loss, Tyson-Nathan said he had spoken to leaders in the hospitality sector, who estimated between 51,000 and 68,000 job losses.

This was a concern for her, as hospitality was a “big employer” for Maori.

She gave the example of Sky City job loss.

After the borders were closed, the industry essentially stopped, he said.

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And with Prime Minister Jacinda Ardern’s indications that the borders will remain closed for the foreseeable future, the sector will continue to feel pain.

‘How to call an architect instead of the fire service while it’s on fire’

Haka Tourism Group CEO Eve Lawrence said the sector was suffering due to the closure of the border.

She was very skeptical about the national tourism campaign, saying it would only generate around 20 percent of additional revenue.

“It’s like calling an architect instead of the fire service while it’s on fire.”

She said the government needed to focus on saving the tourism sector before redesigning it, focusing on domestic tourism.

For example, Lawrence said, the wage subsidy scheme needed to be expanded and without it, things would get even worse for the sector.

Haka Tourism Group has 184 full-time employees; Without the reopening of the border or the extension of the wage subsidy scheme, Lawrence said 171 jobs would have to be cut.

She said that tourism companies cannot operate with zero income.

“We need support until the borders can reopen.”

She said operators were “incredibly concerned” about making ends meet, particularly hosting providers.

She said commercial rent reductions had to be on the table, or many more operators would fail.

Lawrence asked that the “bed tax” be removed at least until the end of the year.

‘Level 2 disappointment: the carpet was pulled out from under us’

Event Impressions Director Jeff Alexander said all of his operations had gone eight weeks with no income.

This has been serious and without further government support, the event planning industry will have serious problems.

Alexander, like many in the industry, was planning the limit of 100 people on level 2.

But yesterday, it was announced that the limit was only 10.

He said yesterday’s announcement “pulled the rug out from under us.”

He said that all non-essential services have been cut from his business and that he was working on a survival plan.

“For us … we are struggling with the fixed expenses of the business.”

He said that was not covered by the wage subsidy, which does not cover the full cost of paying his staff.

Although the sector was pleased to see a downward movement in alert levels, there was still too much uncertainty for many people.

This means that the reserves have not been collected.

He called on government agencies to work with event planners and not plan events internally: “Now is the time for professionals.”

Parliamentarians are listening to a variety of affected companies and groups, including NZ Māori Tourism, Sounds Air, Sudima Hotels and Tourism Industry Aotearoa.

“We are heading into a deep recession and our economic recovery plan will be of great importance,” said Simon Bridges.

Today’s hearing comes just days before the 2020 budget, or, as Finance Minister Grant Robertson has called it, the “recovery budget.”

Tour operators and businesses will have high hopes that there will be a support package for them among the billions of dollars of new spending that is likely to be announced.

• Covid19.govt.nz – The official government Covid-19 advisory website
Committee Agenda:

• Pania Tyson-Nathan, Executive Director of NZ Maori Tourism 10am – 10.15am
• Eve Lawrence, General Manager of Haka Tourism Group 10.15am – 10.30am
• Jeff Alexander, director of Event Impressions 10.30am – 10.45am
• Andrew Crawford, Managing Director of Sounds Air 10.45am – 11am
• Matt Brady, Managing Director of Pan Pacific Travel 11am – 11.15am
• Les Morgan, director of operations of Sudima Hotels 11.15am – 11.30am
• Chris Roberts, executive director of Tourism Industry Aotearoa 11.30am – 11.45m
• Kelvin Davis, Minister of Tourism 11.45m – 12.05pm