How to bring back tourists and save the hotel industry

Hoteliers today released their own COVID stimulus package describing the government’s announcement this morning as helpful in part, but ignoring the elephant in the room.

While Hotel Council Aotearoa (HCA) backs the government’s strong health-based approach and welcomes increases in the resurgence program and the wage subsidy program, it urges the government to catch up on border parameters and provide targeted support for tourism businesses.

The HCA’s COVID stimulus package calls for a targeted expansion of the wage subsidy program aimed specifically at the tourism and hospitality industry until borders reopen and reasonable tourist influxes return.

HCA Strategic Director James Doolan said as long as borders remain closed and travel within and outside Auckland is limited, the tourism sector will experience huge problems that warrant support. continuous targeted.

“It’s amazing to think that tourism once contributed 9% of New Zealand’s GDP and 20% of all exports. A key contributor to our national economic well-being seems to be an afterthought.

“Without international tourists and freedom of movement at the national level, the revenues of all tourism businesses are permanently hampered. It’s not just a lockdown or “code red” problem.

“It seems likely that support payments will cease for businesses located in green spaces, although hotels and other tourism businesses in green spaces will continue to face significant financial difficulties due to ongoing border closures and restrictions on domestic travel.

“Despite what the government claims, tourism businesses simply cannot ‘operate normally’ when the traffic light turns green. For the hospitality industry, we will not get back to normal until our international customers can safely return.

“Targeted support for the tourism industry is a natural and obvious next step after the strict sanitary measures implemented by the government since March 2020. All other countries seem to be doing it. Why not New Zealand?

“The health response has rightly targeted the most vulnerable in our society, and now more effort should be made to support our most vulnerable industries as well. Unlike some other sectors, the product of the tourism industry cannot be stored during closures. There are no pent-up requests for vacations not taken or restaurant reservations from yesterday.

Doolan said international travelers generated 55% of the accommodation industry’s revenue before COVID, while hotel revenue overall was down 40%.

“Border restrictions persist far beyond anyone’s initial estimate, so a path to reopening is now critical. Businesses that employ a lot of employees and assets, such as hotels, cannot plan properly in an information vacuum.

“The current border settings are simply obsolete in the new world of traffic lights. We should have Kiwis vaccinated at home for Christmas and once again make real progress in safely reopening our borders to international tourists.

“Now that we have the traffic light system designed to open us to the country, it is not enough to speak vaguely about a possible reopening of the borders next year.”

In its COVID stimulus plan, the HCA also calls for the introduction of an accelerated depreciation regime for tourism industry assets, including accommodation providers, would allow renovations and repairs to be carried out before the reopening of New Zealand to the world.

“If the government really believes in rebuilding stronger after COVID, then the accelerated write-off of tourism assets is a given.

“Once again, the government has missed an opportunity to indicate how and when international borders will reopen to double-vaccinated Kiwis and foreign tourists. “

Doolan said the tourism sector was at stake and it was time for the government to clearly state New Zealand’s national targets for the reopening.

“Now that 90% vaccination is in sight, are we aiming to travel without quarantine for healthy, double-vaccinated foreigners in January of next year? If not, why not? Now is the time to give beleaguered tourism businesses some much-needed insight on when New Zealand can reconnect with our international friends, clients and loved ones. “

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Peter M. Doran