Covid-19 traffic light system: Airlines, hotels worried they’ll be left in the dust

Hoteliers say the Government’s Covid-19 recovery plan “ignores the elephant in the room”, while airline and tourism groups say there’s still highly damaging uncertainty over when travel can open up.

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

The council’s 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.

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,” he said.

“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 appeared that support payments will end 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,” said Doolan.

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?”

Doolan said the health response rightly targeted the most vulnerable in the country, 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 per cent of accommodation sector revenues pre-Covid, while hotel revenue overall is down 40 per cent.

“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.”

He said 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.”

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.

Tourism Export Council chief executive Lynda Keene said the Government plan announced today is “utterly confusing and underwhelming”.

She said it was disappointing that the Government had failed to acknowledge tourism and hospitality businesses all around New Zealand that had been impacted by the lockdown of Auckland and Waikato.

They were hanging on by a thread and who need targeted support.

“We appreciate the extension of the wage subsidy and resurgence support package is a help to many businesses and we’re pleased that Auckland businesses have been able to attract additional funding,” Keene said.

However, as tourism businesses have been most impacted by the closure of the border the council said it had been hoping there would be targeted funding for our international sector.

“The biggest flaw and exclusion in the Government’s plan is no reference at all to what their thoughts are on reopening New Zealand’s border, so Kiwis can come home and the country can begin in a safe and phased way to welcome back international visitors.”

She said the council had expected a monthly or quarterly timeframe with vaccination targets in 2022 so the international tourism sector could advise our offshore partners of when New Zealand would reopen.

“The lack of this detail not being included in the plan today, dramatically increases the risk that international agents/visitors will not put NZ on their bucket list in 2022. This will not only impact the economy and thousands of businesses, but also NZ’s global reputation which is fast going down the gurgler,” said Keene.

Airlines and ground handlers hope the financial support packages for Auckland will help keep them solvent.

Some Board of Airlines Representatives have struggled to qualify for support for Auckland workers because their revenue is already so low they can’t meet the 40 per cent reduction required in the test period.

Cashflows were already in tatters due to the earlier closure of the Tasman quarantine-free travel zone.

“So despite their workers being the most heavily hit with air travel halted for both Auckland and the Tasman, they couldn’t qualify for the critical support needed. Others that aren’t as reliant on the Tasman are faring better in securing some support for their workers,” said the board’s executive director Justin Tighe-Umbers.

He said he was urgently seeking clarification from the Government on when in the traffic light system domestic air travel out of Auckland can restart, and under what conditions.

“New Zealand’s airline sector is experiencing the worst conditions it’s faced for the entire pandemic. The Tasman is closed, and Auckland domestic air travel has been stuck at the same restrictions as Alert Level 4 for months now,” he said.

Well over half of the normal passenger numbers nationwide are not travelling, and it is not clear when it will end.

Prime Minister Jacinda Ardern said this morning she expected Aucklanders to be able to have Christmas with their families but didn’t specify where.

“This is creating deep uncertainty for thousands of people who work in the aviation sector. Clarification is desperately needed from the Government so the airlines and ground handlers can give their people confidence and know when their cashflows will start to recover.”

Managing Director of Cordis Auckland, Franz Mascarenhas, said he was pleased that there are now some specific targets linked to when the countrywill transition to the new system, and we hope this will instil some urgency to get the vaccine across Aotearoa.

“The message in the press conference this morning was clear – if you do not get the vaccine you will miss out on some of the freedoms that other Kiwis will be able to enjoy. Getting vaccinated helps to protect you and those around you, and helps prevent our healthcare system from being overwhelmed,” he said.

”The most significant positive aspect for us at the Cordis is the clarity that was provided for businesses, who can choose to operate only in a vaccine mandated environment.”

He said the hotel was ”keenly” awaiting the passing of legislation promised by the Government in the next few weeks, to make this a reality.

”We believe this will certainly help in achieving the vaccine targets, hopefully by mid-December.”

He was pleased with the increased resurgence package amounts but it does not provide the support large businesses need to sustain the huge losses being made.

”Equally disappointing is the lack of any clarity as to when the borders will reopen within New Zealand, as well as reinstating our travel bubble with Australia and then opening up to the rest of the world.”


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