The Heavy Burden of Keeping New Zealand Safe

Tourism Industry Aotearoa (TIA) has commented that while it recognises that the extension of the COVID-19 Alert Levels is needed to protect the health of New Zealanders, it will put more pressure on tourism businesses around the country who are desperately trying to survive.

The industry was already reeling from the effects of the first lockdown and the ongoing border closures – and then almost two weeks ago the Alert Levels were raised to contain a community transmission outbreak in Auckland. Consumer spend data shows that tourism operators from one end of the country to the other are being adversely impacted by the Level 3 restrictions in Auckland.

The information, provided by the Ministry of Business, Innovation and Employment, comes from electronic transaction data. It shows that total consumer spend in Auckland fell by 24 percent in the week ended 16 August compared to the previous week, reflecting the first five days of Level 3 restrictions. For most other regions in New Zealand overall spend was up for the week, suggesting

that most economic activity was continuing under Level 2.

Taking a closer look at the numbers and removing international visitor data, accommodation spend by New Zealanders was down 24 percent across the country compared to the week before. Food and beverage spend by New Zealanders was also down 27 percent compared to the week before, with transport and travel spend down 36 percent compared to the week before.

“In other words, the spend on tourism and hospitality across New Zealand has been significantly curtailed by the restrictions on travel into and out of Auckland,” said TIA Chief Executive Chris Roberts.

“While Aucklanders have suffered the greatest restrictions, the economic impact is being felt by tourism operators across the country.”

Tourism businesses are relying solely on domestic visitors for the foreseeable future and many are struggling to survive with the diminished demand. Continuing Alert Level restrictions, including restrictions on large gatherings, will put more pressure on tourism businesses and jobs, so further targeted government support will be necessary.

“Losing a third of the domestic visitor market has been a serious blow on top of the closed borders,” noted Roberts.

“While the safety of New Zealanders is paramount, the Government must acknowledge that COVID-19 responses have disproportionately impacted the tourism industry. The package announced back in the May Budget cannot be the end – if we are to have a tourism industry that survives the biggest crisis in its history, there will need to be ongoing targeted relief.”