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The Road Ahead: What's really happening in the engine room of NZ tourism

David Fisher
By
Senior writer·NZ Herald·
15 mins to read

RoadAhead

Reporter David Fisher and visual journalist Mike Scott are on a nationwide road trip to ask New Zealanders: What matters to you?

The trail of destruction starts to emerge at Queenstown.

There were signs before then - Bluff and its tiny tourism industry was gasping, the rail trail businesses across central Otago in early winter hibernation, empty boats tied up in the stillness of Te Anau.

But Queenstown, our tourism nerve centre, was in spasm. It was inarticulate, going through the motions while trying to work out if there was any point in doing so.

Post-lockdown, numbers picked up. Visitor numbers surged during the July school holidays - money saved for overseas holidays now spent locally, lump sum subsidy money used to fund family breaks.

With holidays over, visitor numbers dwindled. Retail staff wander empty shops aimlessly.

Oh, there's life, and there's hope but from Queenstown to Haast, and then through the marvel of the West Coast, the wreckage of our tourism industry paints a picture in which there is little life, and so very little hope.

In Frankton, near Queenstown's international airport, construction continues on anew commercial zone of hotels and retail outlets. It's clear Queenstown was ready to capitalise on its international reputation.

Building and construction is continuing in Frankton, near Queenstown, despite the dearth of international tourists. Photo / Mike Scott
Building and construction is continuing in Frankton, near Queenstown, despite the dearth of international tourists. Photo / Mike Scott

If you build it, they will come. But no one is coming while the borders are closed and domestic tourists have accepted for years that Queenstown is priced beyond where they can reach.

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At the airport, Heliworks offers one of the many premiere Queenstown tourism experiences. General manager Richard Mills, 62, is winding down a lifetime of work with the imminent closure of the company's branch.

Discussion around the office is who has secured a flying job, and where in the country they will have to move to take it up. Not everyone is so lucky, yet.

It's not just the drop in tourist numbers. It's the drop in spending. Domestic tourists just don't drop the kind of money international visitors on a "trip of a lifetime" will spend, and it's that money which has raised Queenstown's high tide mark.

Heliworks' Queenstown general manager Richard Mills during his final days on the job. Photo / Mike Scott
Heliworks' Queenstown general manager Richard Mills during his final days on the job. Photo / Mike Scott

"Kiwi tourists have been damned handy during the holiday period," says Mills. But where they will spend $300 for a short hop, international tourists will spend $2000 on a full-blown flight.

"That sort of money is what we need to balance out the other parts of the business," says Mills, referring to police and search and rescue contracts.

"I don't know - and I don't think anybody knows - when they're coming back."

Bubble dream burst

There was the prospect of an Australian bubble. The recent surge in cases has dispelled that prospect.

Mills says Queenstown has its own particular issues - how the town pitched itself in the market, and the expensive ecosystem that created for those who live and work here.

"This town went from being a $300-a-night town to $600-a-night about four or five years ago and has never looked back."

Right now, "everyone is doing discounts", but that won't be enough.

As a reflection of the impact on business, Guy Cotter, CEO of Adventure Consultants, describes the landscape his international guiding business is attempting to traverse. Cotter and his company are internationally regarded - he has climbed Everest five times, but the less widely known peaks he has scaled have earned even greater regard among climbers.

His company is international and rightly famous, but its business is now massively reduced. He says the New Zealand part of the business was 10 per cent of the company's income, the rest earned guiding adventures abroad.

Of that 10 per cent remaining New Zealand business, 60 per cent came from offshore. So, that leaves Cotter with just 4 per cent of his pre-Covid-19 business.

Mountain guide and Adventure Consultants chief executive Guy Cotter sorts gear after flying out of Wye Creek near Queenstown. Photo / Mike Scott
Mountain guide and Adventure Consultants chief executive Guy Cotter sorts gear after flying out of Wye Creek near Queenstown. Photo / Mike Scott

"We have a few Kiwis but we would be lucky to cover costs. It's just survival mode at the moment and see what happens. There's no end date to this."

The new unemployment benefit for those who lost jobs in the Covid-19 zone isn't helping. As Cotter understands it, staff who take it are bound from taking on any work that might emerge.

It means experienced staff are "stuck on the dole" with skills that risk atrophy while not being used.

And those staff would be earning an unemployment benefit - the "super dole", as it is dubbed, for its tier above the standard unemployment benefit - in a town that charges a premium for living space. The town is skewed towards high-end visitors. Those working here exist on the fringes, cramped into small flats and shouldering huge debt.

As Mills says: "Tourism isn't the best paying job. If you've got a $700,000 mortgage - that's the one that worries me."

Paying the mortgage

The mention of his freshly acquired mortgage sees the blood start to drain from the cheerful face of Irish worker Ruaidhrí de Faoite, 31. He works at Hydro Attack on the Queenstown esplanade, at the shore of the village-style, tourist-focused, shopping precinct.

His new mortgage is key among reasons for de Faoite's huge optimism over the recent surge in domestic tourists, who embraced the opportunity for a discounted plunge into the waters of Lake Wakitipu in the company's semi-submersible shark ride.

Ruaidhri De Faoite from Hydro Attack in Queenstown. Photo / Mike Scott
Ruaidhri De Faoite from Hydro Attack in Queenstown. Photo / Mike Scott

The $155 ride has been discounted to $99, bringing in more New Zealanders. The expense to the New Zealand market is not lost on De Faoite - he says he has likewise balked at spending on tourism in his native Ireland.

"A lot of people come to New Zealand on a once-in-a-lifetime holiday. I do appreciate things do seem expensive but if you are coming to New Zealand on a once-in-a-lifetime experience, you will spend the money."

When New Zealand emerged from lockdown, it was "day to day". Now it seems a little more stable; about half the customers talk about funding their New Zealand break with funds intended for an offshore holiday.

"It's crazy people need this kind of push to get out and explore their own backyard."

Discounts helped move Annabel Smolar, who hadn't been to Queenstown for a decade but came for a holiday with more regular visitor, sister Justine Joseph.

The school holidays, they agree, were busy but the days after significantly less so.

"The package deals were amazing," said Smolar, who was able to arrange ski lessons for daughter Lucy, 8, for $125 for the day, including gear and pass, leaving her free to explore the slopes.

On holiday in Queenstown from Christchurch are Justine Joseph, left, Lucy Smolar, 8 and Annabel Smolar. Photo / Mike Scott
On holiday in Queenstown from Christchurch are Justine Joseph, left, Lucy Smolar, 8 and Annabel Smolar. Photo / Mike Scott

"The affordability with the discounts has made it that much more possible for us to come."

Joseph and Smolar, though, have noticed the shock waves of Covid-19. There's the lack of accents, the reduced foot traffic. Their stay at the Hilton was discounted yet it has restaurants that are closed. Although operators are offering discounts, some attractions have reduced days on which they open. In addition to discounts, some are not charging for children - and drawing that line at 18 years of age.

"They will have to make some hard decisions," says Joseph.

The abandoned West Coast

The road to Haast, alongside Lake Hawea. Photo / Mike Scott
The road to Haast, alongside Lake Hawea. Photo / Mike Scott

From Queenstown through the remarkable Haast Pass, there is every sign tourism threw a party and the guest list didn't turn up. Instead, a handful of rowdy whānau gatecrashed and ate everything they could get their hands on.

It really incredible, this stretch of New Zealand. Awe-inspiring and unimpeachable, countryside isn't the right word because it suggests it has been developed or manicured in some way. This stretch of country has had none of that.

No wonder foreign tourists come, and great wonder we don't all visit, again and again. It's less the distance and more the cost, as many operators acknowledge. As yet, there are no signs of government lifelines beyond the obvious wage subsidies - no tax breaks to encourage domestic tourism, or rebates on GST for those who holiday locally.

Without the hordes of visitors from abroad, what happens here? The road south from Haast to Jackson Bay is threatened by the sea, and locals grumble at the lack of interest the council shows in protecting the foreshore. Jackson Bay itself - the end of the West Coast by road - is near to becoming an abandoned settlement.

Eamonnd and Helen Johnston run the service station and mechanics at Haast Junction. He came here in 1967 when his parents moved from Balclutha in the hope of building a future, selling their car to pay for a fresh start.

Mechanic Eamonnd Johnston fixes a car at his workshop in Haast. Photo / Mike Scott
Mechanic Eamonnd Johnston fixes a car at his workshop in Haast. Photo / Mike Scott

They would need a car again, soon enough. At Balclutha, the 1960s saw State Highway 1 punched through to Invercargill. It also saw the road down the West Coast built, bringing the world to this wildness.

Watching life unfold on the coast, Eamonnd Johnston has an easy humour and a philosopher's patience. Tell someone there's a billion stars, he says, and they will believe you. Tell them there's a million leaves on a tree, he says, and they believe you. But tell people the paint is wet...

Like everyone we have met on the road, Johnston has deep satisfaction the virus is not here. "Covid was like all those other things - something someone else had, somewhere else."

All we meet speak of the unfolding awfulness in Australia, how the Government kept us free of the virus, of the impossibility of keeping it out forever.

It will require significant change to how we live, he says, and some change will be difficult to take. "A lot of those things that are imposed on one, after a while, they become pedestrian. I'm just extremely relieved it is not my decision."

Johnston's business doesn't entirely rely on tourist trade, although he says the school holiday bump of discounted campervans meant there was no need to pick up the second job subsidy. "Just managed to keep the wheels turning," he says.

Into the wild

The scale of the problem and the difficulty is revealed again and again on the West Coast, where the square peg of businesses aimed at foreign tourists confronts a round hole future, even assuming domestic tourists have money to spend.

The spectacular Lake Moeraki Wilderness Lodge - 30 minutes north of Haast - is a wonder and the work of a lifetime by Dr Gerry McSweeny and Anne Saunders. If you ever wondered what New Zealand looked like before colonisation, even before Maori, says McSweeny, this is it.

Towering rimu and kahikatea in the bush, penguins on the coast. An environment that pushes close to being pest-free, or at least, until lockdown. The accommodation here is beyond comfortable, and guests awake seeing nothing but nature and the gentle flow of the river from the lake to the nearby sea.

Wilderness Lodge Lake Moeraki co-founder Gerry McSweeny at Lake Moeraki on the West Coast of the South Island. Photo / Mike Scott
Wilderness Lodge Lake Moeraki co-founder Gerry McSweeny at Lake Moeraki on the West Coast of the South Island. Photo / Mike Scott

It's not cheap, but delivers tremendous value for what it provides. For $350 a night, you receive food and lodging, and a series of guided tours. The seven-day stay is $3000. At capacity, they have 50 guests a night and employ 15 staff.

The day we visited, Saunders was dealing with the first cancellation of 50 guests from the Californian company behind about 30 per cent of their bookings. At the same time, they have filled the first six days for when they reopen in spring.

McSweeny says the market is usually 20 per cent New Zealand so a major shift in footing will be needed. "We're reasonably upbeat about targeting the Kiwi market but we're a long way from Auckland."

He estimates two years until overseas tourists return. "I think the key strategy is survival - maintain the facilities and they will come back."

The answer is not listening to the mining industry's muttering, he says, of how tourism was always doomed to fail and how it was time to start digging deep.

The absence of traffic on the West Coast highway makes the deer bold. They have crossed into bush around the lodge to eat at the succulent undergrowth. McSweeny points out the signs as we walk.

During lockdown, there were no cars. The deer edged out of the bush and alps to the east and stood on the road before slipping down the other side to start eating away at McSweeny and Saunders' lifetime's conservation work.

If there was any doubt, Saunders found proof on the road when out for morning exercise one day. A lockdown-busting car had bowled a deer and continued, leaving it dead at the roadside. When she told McSweeny, he was up there for the hindquarters and back strip.

Wilderness Lodge Lake Moeraki co-founder Anne Saunders. Photo / Mike Scott
Wilderness Lodge Lake Moeraki co-founder Anne Saunders. Photo / Mike Scott

"We had venison three different ways," says Saunders, embarrassed to find out McSweeny has told this story. Their son, who runs the sibling lodge in Arthurs Pass, teased about "road kill casserole".

Empty roads, empty towns

There is still no traffic on State Highway 6, north along the West Coast, or such little movement as to make the roads seem empty. At times, birds drop down out of the bush and use the road as a tunnel.

The glacier towns - Fox and Franz Josef - are desolate. A solitary car sits at the car park for the walk to Fox Glacier. No one is left to wonder at these icy marvels.

"It's been great having domestic tourism," says Marius Bron, 44, head guide at Fox Glacier Guides. Winter is always quiet on the West Coast but even then he estimates numbers are down by half.

His story is the same as other places - domestic tourists were always an "extreme minority" but school holidays were great. It brought a bulge in custom that was now a relative "dribble". The consequence is a reduction in staff at every tourism business.

Fox Glacier Guiding chief guide Marius Bron sorts out boots at the company's headquarters. Photo / Mike Scott
Fox Glacier Guiding chief guide Marius Bron sorts out boots at the company's headquarters. Photo / Mike Scott

"Those who are more responsible in business - there's a burden on those people to come up with answers."

And yet, what answers are there? The scale of Covid-19 is enormous and it hasn't stopped. "The Covid situation is still steamrolling on out there in the world."

At The Landing in Franz Josef, bar and restaurant supervisor Charlotte McElroy, 21, is making plans to return home to Waihi after five years. The tourist towns on the West Coast had already suffered poor seasons with rain and road issues. The Covid-19 impact has been the final straw for a number of businesses.

She counts off those restaurants that have closed, and the staff who have gone. "Everyone here is trying their best to be positive."

But it's hard when empty chairs spell out the size of the problem. "There's a lot of people who have left, and when the subsidy ends, there will be people losing their jobs. There's been a lot of tears.

Bar supervisor Charlotte McElroy at The Landing bar in Franz Josef. Photo / Mike Scott
Bar supervisor Charlotte McElroy at The Landing bar in Franz Josef. Photo / Mike Scott

"I'm not envious of my bosses or my manager or anyone here who has a really important decision-making role. It's not an easy choice to make - what staff to keep, what staff to let go whether to stay open or not.

"Everyone is trying to help each other but there's nothing you can really do. It's not a nice time at the moment."

Making plans, spreading the load

At the Woodstock Hotel in Hokitika, Colin and Leanne Cutler - 51 and 43 - spent lockdown coming up with a plan. The couple worked to better distribute the load beyond their hospitality-focused pub business.

With excellent food and their own beer and cider, they enjoy support from local regulars but thrive on the international visitors who parked campervans in the carpark or stayed in newly built neighbouring units.

During lockdown, they doubled-down on their food with pre-cooked meals that could be packaged for sale, and developed bottling and labels to get their beer into retail outlets.

The international tourists who did lockdown at the pub became test subjects as the couple tested food, finding what could be chilled and successfully heated.

Leanne and Colin Cutler at the Woodstock Hotel in Hokitika.  Photo / Mike Scott
Leanne and Colin Cutler at the Woodstock Hotel in Hokitika. Photo / Mike Scott

"Food is what we know," says Leanne Cutler, "and beer is what he is getting to know but if you can't sell it from your premises what do you do? We need to know we have got that security - even if we are making the piddliest little amount, it's something."

The couple have a plan but there's room for government to help, not just them but others like them. Those who can offer advice, or to develop ideas and navigate a path through regulation.

"Everything [the Government] is doing is reacting. There should be a plan first and then you're only reacting to exceptions."

Also looking for a plan are Matty and Kirsty Hawkes, 44 and 46, who manage the famous Bealey Hotel in Arthurs Pass. They are keen to see government encouraging New Zealanders to travel domestically with advertising, suggestions of destinations and incentives to go on holiday. In Ireland, citizens can claim tax back for domestic holidays.

The future is only uncertain, says Matty Hawkes, and there are awfully big issues to confront at a time when we are only a few months out of lockdown.

"We aren't ready to have that discussion yet. We're not quite in that frame of mind."

Psychic Jenny Khan. Photo / Mike Scott
Psychic Jenny Khan. Photo / Mike Scott

Among the few with any feeling of certainty is Jenny Khan, 57. She offers psychic readings to those heading east over Arthurs Pass. She says she saw the virus coming and can see the future.

She says she knows exactly what will happen. Covid-19 is going to get worse before it gets better.

We're out of the West Coast. We're not out of the woods.

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