Covid 19 coronavirus: Why Tourism NZ's doing a 180-degree turn with 100% Pure

Tourism New Zealand must turn the clock back by more than 30 years and lead what could be an industry-saving push for Kiwis to see their own country.

International tourism has collapsed for the foreseeable future - domestic tourism is the best chance of reviving what was a $41 billion-a-year industry and the government agency will be pivotal to that.

Already the country has already lost an estimated $3.5b in international tourist income, half the major hotels in the country have closed, Air New Zealand bookings are at 1 per cent of normal and a quarter of the 400,000 jobs generated by tourism are now at risk.

Tourism leaders know the only way to save the industry is a speedy pivot to push New Zealand to New Zealanders.

The predecessor to Tourism NZ, the NZ Tourist and Publicity Department promoted this country to Kiwis with a famous 1980s campaign - 'Don't leave town until you've seen the country.'

But when Tourism NZ was set up in 1990 it had by law no involvement or spending on promoting domestic tourism – which it left to individual tourism companies and the Regional Tourism Organisations.

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That's set to change following a Government commissioned study to ''re imagine'' tourism in this country.

Tourism NZ chief executive Stephen England-Hall said there would have to be a domestic restart before the organisation could think of promoting the country overseas.

''On the domestic demand stimulation it's not much of a pivot in terms of how we operate today. We'll redeploy our existing people to have a New Zealand-based market team that leverages our insights and digital technology, media and marketing expertise.''

The Government funds Tourism NZ is funded by about $110 million a year and has a staff of about 160, with half of those overseas.

England-Hall said staff overseas could be part of the New Zealand marketing push for Kiwis.

He's also determined not to let go of decades of building up New Zealand's profile in key markets even though it's uncertain when the overseas resumes again - whenever that may be.

''If we're turned off for six months or longer, then the share of voice and share of market that we have in those countries will rapidly diminish,'' he said.

''The risk for tourism and for our brand and exports in those countries is that the longer we are inactive in those countries the longer it will take to recover. I don't mean just tourism but anything we do in those markets.''

He said there had already been inquiry from travel firms about wanting to resume trips to New Zealand next year. The big challenge is to keep the idea of visiting New Zealand alive, even though travellers are unable to convert their travel plans into reality.

Success in the health battle against Covid-19 could also further enhance New Zealand's reputation, making adherence to lockdown rules even more important.

''If we emerge in better shape health-wise it will help reboot tourism,'' he said.

Our approach to the dealing with the disease could reflect well on the country's image of being a welcoming country. There had been some examples of poor treatment of stranded tourists over the past two week but ''by and large'' it had been good.

''New Zealand seen as doing the right thing for its residents and visitors.''

England-Hall said the ''crisis resilient'' traveller will lead the way back to New Zealand but it could take up to three years to restore travel patterns.

Even with those signs of interest and that need to retain a foothold with offices Australia, Singapore, China, Japan, Korea, US and Britain., will there be job losses??

''There are some sensitive conversations around that - we're still looking at what our offshore needs are going to be.''

The domestic push is set to get a financial boost from the border levy introduced last year.

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Tourism Minister Kelvin Davis said that he and Conservation Minister Eugenie Sage would review the international visitor conservation and tourism levy  plan. The $35 per person levy was expected to generate about $80m, was aimed at funding sustainable tourism and conservation projects.

"This plan was prepared at a different time, for a different future. We are now looking at what aspects of the plan remain fit for purpose and how the IVL can be best used to help rebuild the tourism industry as part of a restart package," Davis said.

Tourism New Zealand would work alongside MBIE and the Department of Conservation, and with the industry to ''re imagine'' the way we tourism was governed, marketed domestically and internationally.

Repackaging domestic tourism

England-Hall said some domestic businesses will have to refine their product offer and pricing tiers for Kiwis.

Already luxury lodges have discussed changing their approach, with the 30 per cent discounts that apply during winter to try and lure Kiwis could be applied year round. And New Zealanders will find holiday hotspots less crowded.

England-Hall says the absence of international arrivals might not have the impact on National Parks that some perceive.

''Most of our walks in parks are taken by New Zealanders - it's around 70 to 80 per cent of bookings on tracks are by Kiwis,'' he said.

''My advice to any operator out there is that if you're targeting a product or offer to the international market it's not going to get you any revenue - you have to think about how you're gong to pivot or reposition your offer for the New Zealand market place.''

One spin-off of bleak prospects of overseas holidays was the potential for some of the $11b Kiwi holidaymakers spend abroad to be spent here, on top of the $24b they do already.

''But we've got to overlay that with the likelihood there's going to be a recession and people will have less disposable income.''

He said how well a 100% Pure message would go down with Kiwis was a good question. The campaign had moved from promoting a pristine environment to the purity of the welcome and this would still apply locally.

NZ Hotel Owners executive director Amy Robens. Photo / Supplied

The biggest challenge facing the industry is whether there will be one to support domestic tourism.

Industry group Tourism Industry Aotearoa's chief executive Chris Roberts says it's not dead but it's on its knees, having been set back by 20 years.

Before the Epidemic Response Committee he outlined how dire the position was.

Some 100,000 of the 400,000 jobs tourism supported were immediately at risk and just a third of the $18b forecast to be spent on tourism over the next six months would be spent.Almost all tourism businesses have taken up the wage subsidy scheme – the only ones who haven't are the ones that have chosen to close.

Many tourism operators are waiting keenly to hear about a rent rescue package, he said, without which more businesses will close. He's also pushing for relief from council targeted rates on commercial accommodation providers, something echoed by the NZ Hotel Owners Association.

Its executive director Amy Robens said overnight our hotel sector nosedived from dealing with a critical shortage of hotel rooms to accommodate our booming tourism sector, to the heartache of closed doors and empty beds.

Around half of New Zealand's 250 hotels (50 rooms or more) are now closed. Those remaining open do so with skeleton staff to help stranded tourists, guests in self-isolation, air crew and essential service workers; the police the medical staff.

There need to be steps to protect hotel assets worth around $10b.

''Any targeted rate on the commercial accommodation sector that councils around the country have in the pipeline to pay for growth infrastructure, must go. The Auckland Provider Targeted Rate (APTR), must go.''

That increased rates bills by up to 200 per cent in some cases.

''It wasn't sustainable before, and it certainly isn't now - not in this new norm,'' said Robens.

With a full recovery expected to take up to five years, everything to relieve the burden on the hotel sector must be done, including the government reviewing tax obligations, depreciation and extending the wage subsidy scheme for those in the tourism sector.

''Things will be far from normal in three months' time when the subsidy period currently ends. While hotel owners unreservedly support the Government efforts to eliminate or minimise Covid-19 and ensure we live up to our 100% Pure brand, it is essential that support is given in various forms to recognise the economic and social disruption that its policies have caused,'' she said.

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Covid19.govt.nz: The Government's official Covid-19 advisory website