NZ's $17b international tourism sector big loser as Australia reopens

The outlook for NZ's international visitor sector remains gloomy as Australia reopens. Photo / George Heard

A tourism leader says Australia's decision to fully open to vaccinated tourists from February 21 delivers another serious hit to the New Zealand sector.

While some state restrictions remain, the move in Australia has been welcomed as a sign the country is moving quickly to operating its visitor industry as it was pre-pandemic.

Chief executive of the Tourism Export Council of New Zealand (TECNZ) Lynda Keene said while there was happiness for Australian counterparts the immediate reaction was ''a bit of dismay'' in this country.

''The immediate reaction from tourism businesses in New Zealand is a bit of dismay. We hadn't expected Australia to set a date as early as the February 21 so it's taken us by surprise.''

Operators were now worried there very high chance New Zealand will lose market share to Australia. It's another barrier to recovery of the $17 billion international tourism market.

This is because long-haul destinations like Australia and New Zealand receive up to 40 per cent of visitors that are dual destination visitors. Visitors from North America, Britain and Europe typically come to this part of the world every five to 10 years and now Australia has the jump on this country.

''New Zealand does not have a clear date as yet, just at a time in July (or earlier). The ongoing uncertainty for airlines and offshore travel partners to sell New Zealand may pre-empt a switch to increase frequency of flights and sales to Australia only over the next few months.''

The current requirement for arrivals to isolate for up to 10 days has effectively killed off any chance of a recovery in international tourism - unless that rule is dropped. During the first 18 months of the pandemic 50,000 jobs were lost in tourism, once as big an earner as the dairy sector.

Australian tourism operators have welcomed the decision to open up the country. Photo / Supplied

Keene said the head-start for Australia was devastating.

''The difference of five months to welcome back visitors could affect our tourism recovery for years as Australia throws everything at markets to welcome visitors back,'' she said.

''When you add the fact that New Zealand currently has a major handbrake with the 10-day self-isolation requirement and Australia does not, as a prospective visitor 'Downunder', the country that has no barriers to entry is the country that is going to get booked.

New Zealand was at great risk of losing the millions of dollars Inbound Tour Operators (ITOs) have booked in the pipeline for 2022 and 2023.

''This would be disastrous and could potentially send many businesses to the wall.''

Australia has a similar vaccination rate to New Zealand but has suffered a serious Omicron wave which is levelling off.

Competition is going to be fierce for visitors, and at the moment, New Zealand wasn't yet in the game.

She said she was extremely concerned New Zealand is going to be left behind and our global reputation will take another hit.

''The self-isolation requirement has baffled all of our offshore travel sellers. The demand is there for visitors to return but if we don't take action soon, travel sellers will just focus on Australia.''

Keene said the Government needed to provide a set date for the return of international visitors with no self-isolation requirement.

There was another risk to New Zealand - losing potential workers who could fill jobs when tourism eventually recovers.

''There's a high risk young Kiwis who have been displaced from working in the industry in NZ might head over to Australia for working (or permanent) holidays. Retaining IP and experience in the industry is critical so we can hit the road running when our reopening date is announced,'' said Keene.

"Another worrying unintended consequence of Australia opening so early for international visitors is that there's a high risk that a younger person who was keen to come to New Zealand on a working holiday visa might now switch their plans to Australia.''

This would exacerbate the labour shortage the tourism industry is already facing. If this happens, it will be another added stress for business owners trying to get to first base, she said.

Lynda Keene, chief executive of the Tourism Export council. Photo / Suppled

She said if New Zealand escaped the worst of the looming Omicron wave, the Government
should consider opening up to tourists as early as March 19 - two years since borders were closed.

''A date around this time would allow New Zealand to be in a competitive space with Australia and provide the impetus for tourism businesses to have hope of surviving when the first visitors start to return.''

Philip Goh, the International Air Transport Association's regional vice president for Asia Pacific, said the Australian government to open its borders was greatly welcomed by the airline community and a big step forward.

''The Asia Pacific region has been very cautious in its approach to border restrictions so far but in recent weeks, we have seen growing momentum towards relaxation of travel restrictions – in the Philippines, Thailand, and to some extent New Zealand,'' he said.

''We urge other governments in the Asia Pacific to look at similarly further easing their border restrictions so as to enable aviation businesses to accelerate their much needed recovery and to bring maximum benefits to their economies."

New Zealand's home isolation requirement is also clouding the outlook for Auckland International Airport, say analysts at Jarden.

While last weeks confirmation of border reopening for New Zealanders and
eligible travellers from Australia ( February 28)/rest of the world ( March 14), Australia and visa waiver countries (by July) and all other countries (October) was an important step in normalising the airport's operating environment.

But they say the home isolation requirement will be a major deterrent for both leisure and business travellers and will dampen the recovery profile at the same time as jet fuel prices near historic highs and Chinese borders remain closed throwing doubt on the recovery of this market.