“The phone has almost stopped ringing. If it does, it’s someone cancelling,” said Mike Dougan, owner of five-star Riverstone Motel in Rangiora.
His story is repeated up and down the country by every type of accommodation business.
Forward bookings show that occupancy will stay as low as 20 percent for the next three months, forcing many to finally consider closure after two hard years. First quarter projections given to Hospitality NZ show that despite the move to the less restrictive traffic light system and ‘phase two’, New Zealanders are not travelling, exacerbating the two-year absence of overseas tourists.
Auckland locations are operating on an average occupancy of less than 20 percent. Occupancy, minus MIQ in Auckland was 6 percent in November, 14 percent in December and 18 percent in January. Wellington providers are averaging less than 30 per cent.
Hospitality NZ CEO Julie White expressed that the compounding strain has left the sector unable to get through the Omicron wave.
“It’s desperate times. Everything is connected. Every cancelled event causes hundreds of cancelled bookings for rooms, dinners and drinks. The Government has over-cooked the fear and the health rules. People are fearful to go to their local shops, let alone go to another city. Whatever we try to do - no bookings means no business.
“People also fear being caught as a close or secondary contact. We need to drop isolation for people coming into New Zealand who test negative and allow close contacts to continue to live and work normally with Rapid Antigen testing.
According to White, to get through this booking hole, the accommodation sector needs reinstatement of the wage subsidy and resurgence payments.
Riverstone Motel recently lost a 55-night booking due to a cancelled AGM, and a 14-night booking from a sporting event, all due to fear of repercussions of close contact.
“This is like lockdown, but without financial support. We need that support now, to get through this,” said Dougan.
Richard Rooney General Manager at Wharekauhau Country Estate said year one of Covid was a “golden period of domestic tourism”, but the shine wore off last year, and now Kiwis are being discouraged from travel.
“We’re in a booking hole that will last at least six months. People are in their bunker – they don’t want to risk travel.”
Rooney said many operators will consider closure during the omicron period, but don’t want to harm or lose staff. Franz Mascarenhas, Managing director, Cordis Auckland said the hotel was making losses in the millions.
“We have held on to our work force with the hope things might improve, but the elongated time period is getting us to a position when some tough decisions will have to be made.
“What we want from the Government is an indicator of the criteria being used to move us back to Orange and a targeted time frame by when isolation requirements will be removed, so that the industry can start to trade again. And in the interim, some financial support to get us through.”
David Ovendale, CEO of the TOP 10 Holiday Parks group, noted that bookings after the traditional Christmas holiday period “fell off a cliff”; “There is no long summer tail this year.”
He said on the back of the two-year success in holding the pandemic at bay, with it now in communities and with no real Alpha or Delta experience to fall back on, through fear, many of the public are now in self-imposed isolation.
“People know they can travel, but they choose not to. If it takes six more months to work through this next phase of the pandemic in NZ, the effect on holiday parks and the wider accommodation sector will be terminal for some, perhaps for many - we’ve got to learn to live with this virus.”
Hannah Chinnery of Wellington-based family owned, and operated Bolton Hotel said trading conditions are “terrible”.
“This is the worst we have experienced in 18 years. We were looking forward to strong trading in the months of February and March 2022 with occupancy of up to 80 percent, but overnight the Red setting dropped it to the 210 percent range.
“With no government financial support, we are burning cash and making unsustainable losses.”
Mike Dougan noted that rent was a large cost, but the Government’s rules for landlords and commercial tenants to agree rent relief only applied where premises could not be accessed, which excluded most commercial motel accommodation.
