Covid 19 coronavirus: What new level 2 rules mean for crippled tourism industry

Cycling on Adventure South's Milford Sound tour. Photo / Supplied

COMMENT

Moves to relax rules on domestic leisure travel have been lapped up by the industry and while too late for some businesses, are a beacon for many operators.

When New Zealand does move to level 2 (and a decision is due on Monday) Kiwis will be able to move around the country. International visitors are still banned but the announcement means the $23 billion a year domestic tourist industry can kick back into life in a whole new way. As Tourism Minister Kelvin Davis says if there was ever a time to discover what is unique about our country, it is now.

The big health wins on stubbing out Covid-19 means this big concession on the rules devised six weeks ago, which then stated non-essential inter-regional travel would remain banned under level 2.

Prime Minister Jacinda Ardern is bang-on when she says travel done sensibly withthe now well-drilled hygiene and physical distancing is not in itself unsafe; it's what you do when you get to your destination that counts.

The announcement today is an acknowledgment of the pain tourism is suffering and comes after growing frustration came close to boiling over. It felt the impact of coronavirus first and has been hit the deepest - revenue for an export sector that vied with dairy as our biggest earner reduced to zero income in the space of weeks.

The part of the industry catering to the lucrative China market started feeling it in January and by the end of March the whole sector had been walloped.

Ministry of Business Innovation and Employment numbers out today show Queenstown and surrounds suffered a 37 per cent plunge in tourism spending in March compared to a year ago. The big fall in international visitors was taking effect then but that only included a few days of level 4 lockdown and domestic spending. Figures for April will be horrendous.

Up to 85 per cent of hotels are in hibernation and operators are spending huge sums to protect their $10 billion worth of assets.

Tourism Industry Aotearoa has been increasingly active in pushing the Government for a relaxation of rules and said the announcement was a relief.

TIA has been working with government agencies to develop guidelines on how tourism operators can work safely at Level 2, while maintaining physical distancing and contact tracing. It says these guidelines will be shared with tourism businesses as soon as possible.

"Our businesses are desperate to get back to work and make a living for themselves and their staff. While Kiwi travellers will not replace the international markets we have lost, they will provide welcome business opportunities,'' said TIA chief executive Chris Roberts.

A survey it ran shows the number of full-time staff halved in April from the normal level of 27,635.

Roberts wants more from the Government. Along with extending the wage subsidy scheme for the tourism industry, it suggests the Government makes some urgent decisions on investing the $45m available in the International Visitor Levy fund, considers targeted loans or grants to cover rent and lease payments, and discusses ''sensible'' tax and rating relief.

Chris Roberts, Chief Executive of Tourism Aotearoa. Photo / Jason Oxenham

Air New Zealand has been looking hard at what schedule changes it will make now leisure travel is back. It will be cautious to build back from its operation of just 5 per cent of normal. In the past few weeks the number of no-shows - passengers who have booked and paid but elected not to travel - has been running at high levels.

This shows that in spite of the improving health picture people are still worried about travelling and transport and tourism operators will have to work hard to overcome that. Leisure travel is highly discretionary and for many now out of work or running short on economic confidence, a holiday is at the bottom of the list.

Travel for many in the first instance, may just be a road trip to catch up with friends and relatives for a much-needed hug.

But the New Zealand Aviation Coalition, a newly formed group putting together traditional adversaries; airports and airlines, says Kiwis are ready to fly.

From hardly any flights, more will be added to regional routes as demand for travel becomes clear.

"Like any business, the cost of providing services has to be considered. For airlines, flying half empty planes is just not feasible for long or they will not survive," says its chairman Justin Tighe-Umbers.

New Zealand is full of incredible places and attractions that haven't been marketed towards Kiwis. Operators will adapt what they sell and they will need to look hard at what they charge.

Tourism NZ changing its focus from selling this country overseas to selling here; the whole proposition is being ''re-imagined.''

That campaign is still being developed so, in the meantime, operators and the industry needs to get out and sell themselves. There's a $23 billion a year domestic tourism prize to share and today's announcement gives the beaten up - but not broken - industry plenty of hope.