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The “do something new, New Zealand” motto has mobilised the domestic tourism sector – but has it been enough to buffer operators from the international tourism hiatus?

Sarin Group Hilton Double Tree Wellington

Statistics New Zealand data showed that domestic tourism accounted for $24 million dollars’ worth of spending in the financial year to March 2020 – the highest it has been in the last 20 years.

The spend figure has risen 61 percent since 2010, and accounts for annual growth of five percent.

However, there are big tourist boots to fill given that in the last 20 years, there has been a steady rise in tourism to New Zealand – a cyclical pattern with an annual peak each December. When lockdown hit, the previous peak of December 2019 – with over 500,000 international arrivals – was slashed to just 1,721 people in April 2020.

Wayne Keene, Bayleys’ national director hotels, tourism and leisure said domestic tourism in New Zealand has had highs, lows and everything in-between over the past 12 months as Kiwis tried to holiday and visit friends and family in a safe and compliant way.

“It’s fair to say that destinations within a few hours’ drive from Auckland have seen the bulk of domestic dollars since the borders were closed to overseas tourists and visitors.

“Commercial accommodation providers in Northland, Bay of Plenty, Taupo, and Coromandel have largely seen good turnover and occupancy since the country came out of lockdown.

“Naturally, these areas also noted a constriction in business when the Auckland region yo-yoed in and out of alert levels – as did South Island destinations like Queenstown as traveller confidence was dented by the prescribed health response and associated uncertainties.”

While Kiwis have got out and supported places that they’ve been meaning to go to for years – like Stewart Island and Great Barrier Island, it’s been a tough slog for regions like Western Southland, the West Coast, Queenstown, and Kaikōura.

Pre-COVID-19, Tourism New Zealand said New Zealanders contributed 60 percent ($23.7 billion) of the country’s tourism expenditure. They also spent $9 billion on overseas travel every year.

Fun and games

Bayleys national director business sales, Jayson Hayde, said he takes his hat off to New Zealand tourism operators who have battled to weather the COVID storm.

“It’s been a tough call expecting domestic travellers to prop up business models that were geared towards international visitors,” he said.

“We all know how much more-freely we spend when we go on overseas holidays ourselves, so it is disingenuous for people to be disparaging about the New Zealand tourism industry and saying they should ‘suck it up’.

“So many tourist-related businesses in New Zealand have been built on the back of robust marketing strategies and strong relationships with in-bound tourism operators, they’ve provided thousands of jobs and our communities have benefitted from the money these international guests put back into the economy.”

Hayde said we can’t just play the ball that is in front of us.

“COVID is here for now – not forever.

“The tourism sector needs to be brave, look to the future and identify opportunities that will be relevant, marketable and profitable.”

Long-term horizons

Sudesh Jhunjhnuwala is the founder, owner and chief executive officer of Sudima Hotels with its portfolio comprising Auckland City, Auckland Airport, Rotorua, Christchurch City, Christchurch Airport and the under-construction Kaikōura and Queenstown Sudima hotels.

Jhunjhnuwala said Sudima currently has around 500 rooms across its Auckland Airport, Rotorua and Christchurch Airport facilities under managed isolation and quarantine (MIQ) contract arrangements and while he’s largely happy with how this has helped to underpin Sudima’s wider business, there are downsides.

“We have been very mindful of managing staff wellbeing and safety at all times and that has been extremely important,” he said.

“But also, once our MIQ contractual arrangements end, we will be facing massive reinvestment across those properties as I estimate they have incurred about 10 years of wear-and-tear in just 12 months of constant occupation.

“In this industry, we must always be looking to the long-term horizon and that’s at least 10 years ahead,” he said.

Intense times

Chief executive officer for Sarin Hotel Group, Udai Sarin, said it’s been a mixed bag in the last 12 months for its hotels in Auckland, Wellington, Christchurch, Queenstown and Invercargill as they’ve worked to keep doors open in pandemic times.

“Queenstown’s been a particularly hard market for us, and occupancy levels elsewhere have been somewhat hit and miss,” he said.

“Hotels are expensive to run – there is a huge amount of investment and effort involved in maintaining the land and buildings, in staffing responsibilities, compliance and regulatory factors and marketing.

“Most of what we make goes back into the business and it is fair to say that the last year has been intense – and very demanding for hoteliers.”

Sudima Queenstown

Sudima Auckland City

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