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Trans-Tasman bubble likely to lead to higher domestic tourism costs

Cheap domestic holidays are likely to become a distant memory with the return of international tourists, as the industry scrambles to rehire staff and recover costs.

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Tourism New Zealand boss René de Monchy said those struggling amid the pandemic are eagerly awaiting the Government's announcement today. Source: Breakfast

By Nona Pelletier of rnz.co.nz

The travel and tourism industries were anxiously awaiting the Government's announcement on the proposed trans-Tasman quarantine-free travel bubble later today, with some companies needing just 24 hours to prepare, while others, such as Auckland Airport and Air New Zealand, want about three weeks' notice.

A trans-Tasman bubble will initially see the return of Australian tourists, which accounts for about 41 percent of New Zealand's international travel, or about 30 percent when connecting international flights are excluded.

Hotel Council Aotearoa strategic director James Doolan said hotel operators were looking forward to a two-way bubble, but it would not mean a return to business-as-usual.

"Australians typically spend less money than people who come to New Zealand from further away, so it's not going to be a sudden total fix to the problem that the hotel sector, or even the wider hospitality sector is facing, but it's a very very important first step," Doolan said.

He said hotels needed time to ramp-up their businesses and would struggle to find and train staff to serve an increasing number of tourists.

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Holiday Parks New Zealand chief executive Fergus Brown, representing more than 300 sites, said labour would also be a challenge for the company, which had been operating with skeleton staff in a number of locations around the country.

"And of course we haven't got those working holiday visa people in the country so we're going to be relying on employing New Zealanders to fill that gap," he said.

"They are going to be pretty keenly sought after, so I think if people are looking for jobs, the tourism industry is going to be offering some great opportunities over the next few months, once we get that bubble established."

Concerns about labour shortages were also top of mind for Tourism Holdings (THL), which operated camper vans and tourism facilities, including Waitomo Caves and other facilities associated with the Kiwi Experience and Waitomo Group.

THL chief executive Grant Webster said the company would also need to raise the rental price on recreational vehicles.

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"New Zealanders have responded to what we would consider a very low price regime, and to be honest, an unsustainable price regime in terms of us being able to reinvest in the capital that we have in those motor homes," Webster said.

"So pricing will move up from a THL perspective and I think you'll see pricing move up more broadly across the industry."

International passenger numbers were currently down by around 97 percent at Auckland Airport, and with flow-on effects to other international and domestic airports, with Air New Zealand running a greatly reduced international fleet.

Air New Zealand was also among the companies that needed more time to respond to quarantine-free travel, so it can reopen its international lounges and bring back staff.

However, Air NZ chief customer and sales officer Leanne Geraghty said advanced trans-Tasman bookings were already picking up.

"We're obviously very busy ensuring that we are prepared for the two-way bubble to open, and for any announcement that might come from the Government," she said.

Wellington Airport chief executive Steve Sanderson said his airport would be fully prepared to receive passengers and saw limited risk of a Covid breach, as international passengers had not been travelling through the airport terminal.

"It's something that I think people in Wellington or using our airport can feel quite safe that the airport doesn't have any Covid flights going through," Sanderson said.

While the Government's announcement will almost certainly cover the easing of air travel, any lifting of restrictions on cruise ships was not clear.

Cruise Association chief executive Kevin O'Sullivan said he was expecting to hear more next month, when the industry expected to meet with the Minister of Tourism.

"There has to be a political will from Government to enable crews to begin, and there also has to be a change to regulations to enable cruise ships to come into New Zealand waters," O'Sullivan said.