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How To Bring Back Tourists And Save The Hotel Sector

Hoteliers have today released their own COVID recovery plan describing the Government’s announcement this morning as helpful in parts, but ignoring the elephant in the room.

While Hotel Council Aotearoa (HCA) supports the Government’s strong health-based approach and welcomes increases in the resurgence package and wage subsidy scheme, it is urging the Government to catch up on border settings and provide targeted support for tourism businesses.

HCA’s COVID recovery plan calls for targeted expansion of the wage subsidy programme aimed specifically at the tourism and hospitality industry until borders re-open and reasonable tourist inflows return.

HCA Strategic Director James Doolan said for as long as borders remain closed and movement in and out of Auckland is restricted, the tourism sector has massive problems that justify ongoing targeted support.

“It is incredible to think that tourism once contributed to 9 per cent of New Zealand’s GDP and 20 per cent of all exports. A key contributor to our national economic wellbeing appears to be an afterthought.

“Without international tourists and freedom of movement domestically, earnings for all tourism businesses are permanently impaired. It’s not just a lockdown or ‘code red’ problem.

“It seems likely that support payments will cease for businesses located in green areas although hotels and other tourism businesses in green areas will continue to face material financial hardship because of ongoing border closures and restrictions on domestic travel.

“Despite what the Government claims, tourism business simply can not ‘operate as normal’ when the traffic light turns green. For the hotel sector, we won’t be 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 strong health measures implemented by Government since March 2020. Every other country seems to be doing it. Why not New Zealand?

“The health response rightly targeted the most vulnerable in our society, and now greater effort should be made to support our most vulnerable business sectors too. Unlike some other sectors, the tourism industry’s product cannot be stockpiled during lockdowns. There is no such thing as pent-up demand for untaken holidays or yesterday’s restaurant reservation.”

Doolan said international travellers generated 55% of accommodation sector revenues pre-COVID, while hotel revenue overall is down 40%.

“Border restrictions are lingering long beyond anyone’s original estimation, so a path to re-opening is now critical. Employee-and asset-heavy businesses such as hotels cannot plan properly in an information vacuum.

“The current border settings as simply out-of-date now in the new, traffic-lights world. We should be getting vaccinated Kiwis home for Christmas and making real progress on safe reopening of our borders to international tourists once again.

“Now that we have the traffic light system designed to open us up domestically, it is not enough to talk vaguely about potential reopening of borders next year.”

In its COVID recovery plan HCA is also calling for the introduction of an accelerated depreciation regime for tourism industry assets, including accommodation providers, would enable renovations and repairs to be carried out before New Zealand reopens to the world.

“If Government truly believes in building back stronger after COVID, then accelerated depreciation for tourism assets is a no-brainer.

“Once again, 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 is hanging in the balance and it’s time for the Government to clearly state New Zealand’s national goals for reopening.

“Now that 90 per cent vaccination is in sight, are we aiming for quarantine-free travel for healthy, double-vaccinated foreigners in January next year? If not, why not? It is now time to give beleaguered tourism businesses some much needed clarity about when New Zealand can reconnect with our international friends, customers and loved ones.”

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