Hospitality sector seeking greater government commitment

Hospitality sector seeks greater government commitment to help realize New Zealand’s economic potential through vaccine rollout and border reset

Hotels in New Zealand are navigating a difficult path towards a positive future

The opportunity for a sustained rebound in tourism rests not just with a successful rollout of the vaccine and the corresponding easing of border restrictions, but through increased dialogue between the government and the New Zealand hospitality industry, the parties agreed. speakers at the New Zealand Hotel Investment Forum this month.

Andrew Monteith, partner at MinterEllisonRuddWatts and co-host of the Forum, said recent news about New Zealand’s plans to review current border restrictions and MIQ requirements in the first quarter of 2022 has encouraged a struggling hotel sector.

“A strong message from industry participants at the Forum was that it was essential to prioritize vaccinating our general population because, quite simply, there is no plan B for New Zealand,” says Monteith.

“The pandemic and border closures have had a devastating impact on the New Zealand hospitality industry. Hotels are expensive infrastructure assets with substantial overheads, including a large workforce with varied skills. The rise of domestic tourism has been fantastic to see, but that alone won’t be enough to sustain the hospitality industry for much longer.

“Forum participants recognize that vaccination requirements, testing regimes and managed isolation requirements will be a feature of travel for a long time to come. However, recalibrating our border controls to enable safe international travel while managing the general health risk to the population is now crucial to sustaining our starving tourist economy. The hospitality industry looks forward to working more closely with government and local authorities to help make the proposed changes a success. »

Nick Thompson, director of JLL New Zealand Hotels & Hospitality Group, which co-hosted the Forum, said that while the current environment remains challenging for hoteliers, the long-term picture looks positive.

“Despite MBIE data showing that 11% of New Zealand’s tourist accommodation was closed or had no guests in June, the hotel market remained active as investors had long-term investment goals. knowing that there are always cycles in the market,” says Thompson.

“Lenders say they are well and truly open for business for bargains, and we’ve seen several deals across all value ranges. There’s a lot of capital knocking on New Zealand’s door at the looking for a new home, which to date have not been able to come in. The biggest problem with bringing this capital into New Zealand is that the existing stock remains tightly held by long-term investors.”

Nonetheless, Thompson says the hotel industry’s attractiveness to investors and therefore its ability to support our tourism and broader economic recovery should not be taken for granted.

“Hotels host the vast majority of international visitors to New Zealand, who collectively contribute billions of dollars to our economy. However, as this clientele has no say in local or national elections here, the concerns of the New Zealand hospitality industry over issues such as proposed rate hikes and taxes can often be too easily ignored. .

“As we begin to prepare to reopen our borders, new government regulations could jeopardize the future of New Zealand hotels. Therefore, it is more vital than ever for the government to maintain open lines of communication with the hospitality sector to ensure that subsequent decisions are based on a clear understanding of its challenges and its ability to help.

JLL and MinterEllisonRuddWatts hosted the New Zealand Hotel Investment Forum on Thursday. Panels of frontline experts discussed key issues and opportunities for 2021 and beyond, as well as strategies for successfully navigating today’s hotel environment.

© Scoop Media

Peter M. Doran