Coronavirus: How the outbreak is impacting New Zealand's hospitality sector

Following hotel and tourist activity cancellations, operators are expected to offer competitive prices and packages. Photo / Mediaworks / Dan Jones

The hospitality sector is bracing for the economic fallout from the coronavirus outbreak - and subsequent bar on travellers from mainland China.

Leaders of the sector have "significant concerns" over coronavirus and how far-reaching the impacts will be on dining, accommodation and wider tourism operators.

They say it will have an impact but they do not know to what extent.

Accommodation operators have already begun to report a flurry of booking cancellations by Chinese tourists, and food and beverage operators are reporting "significant drops" in the number of people using Alipay, predominantly used by Chinese tourists.

"That's an indication that [the impact of coronavirus] has extended to our food and beverage members," Hospitality NZ chief executive Julie White told the Herald.

"Right here and now we do not understand what the full extent will be."

White said Hospitality NZ was in the early stages, and working with Tourism NZ, to seek financial cover from the Government for operators affected.

"We're concerned and we're working with Tourism NZ who are in direct contact with the Government around initiatives to turn on tourism activations to replace the impact.

"A lot of our members rely on this high season to get them through the winter. Should they not be getting the revenue coming through that's going to put more pressure on them."

Chinese travellers on average spend $4000 each during a visit to New Zealand, spread across dining, shopping and tourism activities, White said.

More than 350 people have died from the coronavirus. More than 17,000 cases worldwide have been reported in 26 countries.

New Zealand has not had any confirmed cases. However, following the US and Australia, the Government has barred all foreign travellers from mainland China from entering New Zealand for up to two weeks.

Customs has closed eGates and is processing all incoming passengers manually. Photo / Mediaworks / Dan Jones

Fewer visitors to New Zealand means less money circulating in the economy.

Tourism operator David Gatward-Fergusson, director of Queenstown-based Nomad Safaris, said the business would lose money as a result on the short-term ban on tourists from China, which ordinarily makes up around 15 per cent of business.

In February - the height of the season - Chinese tourists make up around 40 per cent of business.

The company, which has been operating for 25 years and offers scenic tours in small 4WD vehicles, has already received cancellations in the last couple days.

Gatward-Fergusson said he believed the decision to bar travellers coming from China was "excessive", given February was a peak month for tourism, and with the country expecting about 40,000 Chinese tourists in the next six weeks.

"The whole country is going to be losing tens of millions of dollars a day for something that is probably already here."

Nomad Safaris would as a result have to "do a lot of fighting on the streets with all the other operators to try and take a piece of other peoples' business", he said.

Hotel operators too are looking to lose "millions of dollars in cancellations".

Nomad Safaris operator David Gatward-Fergusson says New Zealand was expecting 40,000 Chinese tourists in the next six weeks. Photo / AP

New Zealand Hotel Owners Association executive director Amy Robens said operators were anticipating between 20 to 70 per cent of total business to be impacted, depending on how focused on the Chinese market each were.

"Hotels who are heavily reliant on the China market are seeing occupancy from 90 per cent to 40 per cent, so they are losing more than half of their business," Robens said.

She agreed that it was "too early" to gauge the long-term impacts on the sector.

"The coronavirus is likely to impact other travel markets around the world as people delay their travel until the virus is under control.

"Hoteliers will be looking to other long-haul markets to compensate including North America and European markets focusing on conference, meetings and the leisure market."

One positive from the situation was, due to cancellations, domestic travellers could expect "very competitive deals and innovative packages" to encourage travel throughout New Zealand, Robens said.

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The Herald understands Auckland's Dominion Rd was quiet over the weekend as news of the virus spread.

The Restaurant Association said it was "unknown" how the block on foreign nationals who have been through mainland China will affect New Zealand's hospitality industry.

Chief executive Marisa Bidois said the association was hopeful that "there would be a quick resolution for all concerned".

Retail NZ chief executive Greg Harford said retailers around the country were "gearing up for reduced income".

"We are going to see reduced visitor numbers, that is going to have a big impact on the overall spend throughout the peak period, and that's really not good news for retailers," Harford said.

"It's bad news at a time when things have been a little bit tight anyway."

Retailers of all categories would be affected, Harford anticipated. "The reality is visitors coming to New Zealand are shopping at all sorts of places. Yes they shop at tourist shops and perhaps those high-end boutiques that are targeted at the tourist market, but they are also out buying groceries and petrol, and if you are effectively taking a whole lot of customers out of the market, then those impacts will be felt broadly across the sector."