Covid 19 coronavirus: Thames-Coromandel region feels economic impact of pandemic

The Driving Creek Railway attraction has been hit hard by the latest lockdown in Auckland. Photo / Thames-Coromandel District Council

As the door slammed shut on international tourism in the wake of Covid-19, the Thames-Coromandel economy took one of the largest economic hits in New Zealand with recent spending down by more than 6 per cent.

The June quarter report from the Thames-Coromandel economics consultancy Infometrics shows the region's economic activity falling 2.4 per cent over the year to June 2020 as tourism activity plunged in the wake of Covid-19.

The fall is the sixth-largest in economic activity across New Zealand, behind the likes of Otago, which is also dependent on tourism.

Over the June 2020 year, visitor spending was down 6.4 per cent, with a $26 million drop in expenditure recorded by the council.

Infometrics senior economist Brad Olsen said it was expected the three months to June would be the worst quarter for the year, after the 4.5-week lockdown took the wind out of the sails of many sectors of the economy.

"The numbers for the quarter take into account the really dark days of Covid-19 alert level 4 and these have not been reversed out by the better days since, under level 1," Olsen said.

Brighter recent times are reflected in the Marketview consumer spending data for July, which included the recent school holidays.

Total consumer spending for the Thames-Coromandel district of $16.93 million for July was up 32.2 per cent on the same time last year.

"July was the peak of pent-up demand for many people with the school holidays," Olsen said.

"Our view is, we are likely to see a softer profile in spending going forward. So don't bank on such a strong second rebound this time [after the current Covid-19 alert levels are eased."

Jobseeker numbers have also risen in the district, up 27.5 per cent for the year to June. This compares with a rise of 19 per cent for the country as a whole.

"What we're starting to hear from businesses across the country is that we're likely to see job losses mount, but we could well have a bigger spike coming through at the start of 2021, as businesses keep staff on through the Christmas period," Olsen said.

A key factor will be what happens with the current Covid-19 outbreak in Auckland, and when restrictions there are eased, he said.

"The September quarter might not be as glowing as we expected due to the Auckland lockdown."

Mayor Sandra Goudie said while the data was disappointing, the region needed to stay optimistic on the tourism front.

"Winter is always our quiet season for visitors, and we anticipate domestic tourism activity, which makes up a significant share of our market, to pick up heading into summer," Goudie said.

The gloomy figures have arrived as a lot of local businesses, particularly tourism operators, are grappling with the abrupt loss of their key Auckland market since it moved to alert level 3.

Executive director at Driving Creek Railway Neil Oppatt, summed up the impact on the popular tourist attraction saying, "It's dead."

There were four people riding the rail cart on Monday this week, its worst day in years.

"Even on the days when there are road closures, we do better than that," Oppatt said.

"We had more than 100 people a day visiting us this time last year."

Aucklanders make up approximately 50 per cent of Driving Creek's domestic tourism market and the city's lockdown has certainly taken a toll.