- TIA as the peak industry body and voice of the tourism industry has a central role to play in responding to the COVID-19 crisis, collating information from all tourism sectors and providing a collective voice to government.
- Current priorities for TIA are advocacy, business support and connection, and communications. TIA also needs to be actively involved in the tourism recovery and keeping stakeholders committed to the long-term sustainability goals of the industry.
Impact on Tourism
- Tourism is the most impacted sector of the economy. Previously, Tourism was over 20% of our exports, 10% of GDP, and supported almost 400,000 jobs.
- A TIA survey indicates average job losses of around 50% for tourism operators.
- Up to 200,000 of the jobs currently supported by tourism may go.
- Predicting the full extent of the economic impact is difficult, as we don’t yet know what the recovery pathway looks like. Looking at the next six months (April-Sept) we would have expected around $18 billion in total tourism spend. This may now be only $6b – a $12b drop in spend. At $2b a month this is the equivalent of losing in one month the annual value of the kiwifruit or the seafood industry.
- The impact on communities from losing tourism businesses and jobs is immense, especially in many smaller towns with a large reliance on the visitor economy.
- Like all businesses, tourism businesses need clear guidelines on what is required under each Alert Level, and access to quick answers on what they need to do to operate their business correctly.
- When New Zealand reaches Alert Level 1 and most domestic business activity is possible, Government support should focus on those businesses still directly impacted by border restrictions.
- It should be presumed that there will be no return of international visitors in 2020. A return to anything like the previous level of international tourism could take 3-5 years.
- Brand awareness must be maintained in international markets and New Zealand should respond quickly to any opportunities to facilitate safe international travel.
- TIA supports Tourism NZ’s new mandate to take a lead role in domestic tourism promotion, which will need to be coordinated with regional tourism bodies and tourism businesses.
- The crisis has reinforced the need for our industry to have more near real-time data. In particular, it has highlighted the gap in domestic tourism data.
- The Government needs to calculate and share one to five-year forecasts for tourism recovery and economic contribution.
- The tourism industry is people and infrastructure rich. We need innovative ways to utilise these resources, so they are not lost.
- TIA and the industry are keen and ready to be closely involved in the Tourism NZ-led project to reimagine tourism. It will fail without private sector involvement.
- The Tourism Sustainability Commitment, the Tourism 2025 Industry Framework and the Government New Zealand Aotearoa Tourism Strategy must be at the heart of any work to reimagine tourism.
- The project must consider inclusion, economic value, community values, cultural connection and climate change perspectives.
- A trans-Tasman “bubble” must be fully explored. If both countries maintain our current, apparent success in containing the spread of the Covid-19 virus within our own borders, the opportunity to open up the Tasman would be a major boost. If would require all the systems to be in place to deal with Covid-19 risks and public acceptance that such a reopening was safe and possible.
- We should consider whether we can also safely include the Pacific, which is hugely reliant on links with NZ and Australia.
- New Zealand must also be prepared to open its borders as soon as it can to other countries which have the virus under control, and which can demonstrate they can facilitate safe travel.
Taxes and levies
- TIA is pleased the Government acted on its recommendation to allow profits from the last financial year to be offset against forecast losses in the current financial year.
- The Government should consider the suspension of ACC employer levies for the remainder of 2020, as this fund has sufficient reserves to cover past claims.
- The Government needs to make some urgent decisions on investing the $45m available in the International Visitor Levy fund.
- Local Government must review targeted rates on business, where planned expenditure is no longer possible and/or the benefits are not shared equitably.
- Sensible tax and rating relief needs to be considered at central and local government level.
- A TIA survey identified the wage subsidy as the most important support measure taken by the Government.
- TIA was pleased the Government quickly acted to lift the cap on the initial 12 week wage subsidy.
- TIA advocated strongly for the subsidy period to be extended. Member feedback is that many businesses were hoping for more than the 8 week extension announced in the Budget.
Fixed Cost relief
- Plans to introduce legislation to extend the timeframes for dealing with commercial lease disputes caused by COVID-19 are welcome but do not deal with the underlying problem, that businesses without customers cannot meet ongoing rent payments and face going out of business without further government support.
- Further relief is needed for fixed costs. The government should be considering targeted loans or grants to cover rent and lease payments.
Targeted assistance for Tourism Businesses
- The Government needs to have urgent direct discussions with the larger tourism businesses, which provide many of the essential elements of the New Zealand tourism industry, to address their particular needs.
- The Strategic Tourism Assets Protection Programme is welcome as it will provide direct support to businesses that have a wide-ranging and positive impact on their communities.
- The Government needs to move with urgency to have discussions with individual tourism businesses to address their particular needs.
Other support measures
- DOC should suspend the collection of all fixed, non-revenue based concession fees.
- Maritime NZ and Civil Aviation Authority should suspend the collection of fixed, non-revenue based levies and fees.
- All agencies including DOC, CAA, MNZ, WorkSafe and NZTA must review audit requirements and extend time periods. There should be a risk-basedapproach – if a business is not operating there is no risk.
- Banks and other lenders must be encouraged to understand the long-term value of tourism-focused businesses. If banks are not prepared to lend to tourism businesses the government may need to provide direct
- Domestic airlines need direct government support. Their sustainability is a key to recovery and regional connections.
- The Government should investigate the new French Cancellation Law. This allows tourism and travel companies to keep funds received for travel services for up to 18 months, in return for rebooking clients on the same or an equivalent service. The scheme protects tourism operators from negative cashflow, where refunds exceed new revenue, and also provides for the consumer to receive 100% value of their booking.
- The Government should support tertiary education initiatives to provide fees-free training and qualifications to current and displaced tourism employees.
- The medium-term requirement is the reset of 'Tourism' within the education funnel from our schools.
- The Government should invest in the development of a workforce planning framework for the post-COVID tourism industry.