The zoom zipline experience at Skyline Enterprises Rotorua. About 50 per cent of its business comes from domestic tourism. Photo / Alan Gibson
Tourism juggernaut Skyline Enterprises has succumbed to the financial pressures of Covid-19 and initiated job cut talks.
And chief executive Geoff McDonald has warned they will be significant.
Tourism Industry Aotearoa says a survey carried out on its members revealed they plan to lay off about half of their staff.
The 547 members who responded said they would normally have 27,536 staff employed at the moment, but 13,213 would lose their job because of Covid-19.
About 65 per cent had already made cuts.
Ngai Tahu yesterday announced it intended to mothball its operation, affecting up to 300 of its staff.
The Christchurch-based business owns the Shotover Jet near Queenstown, Franz Josef Glacier Guides, Rotorua's Agrodome and Rainbow Springs, the Dark Sky Project in Tekapo, and was establishing the All Black's Experience due to open in Auckland in mid-year in what was the SkyCity Convention Centre.
It will confirm its position next month.
Skyline Enterprises has gondola and luge operations not only in Queenstown and Rotorua but also luge in Canada, Singapore and South Korea. It also owns Christchurch Casino and several hotels.
McDonald said he was surprised by Ngai Tahu's decision but could also understand as there was no imminent restart of international tourism, for which the majority of its business was fuelled by.
"It's very interesting what they're doing ... but I can understand their thinking.
"I suspect they're thinking that domestic tourism is a small percentage of their business and it's just not sustainable for them."
As for Skyline Enterprises, McDonald said they had just this week begun the consultation process with staff about job cuts.
"We are grateful for the Government subsidy because that's enabled us to support people, but like a lot of other operators we know that as soon as we're out of lockdown the environment is going to be tough and tough for some time ... there's been advice to staff and shareholders that there's going to be some pretty significant changes to the structure.
"We've just kicked off literally this week the consultation process and will probably finish at the back end of next week.
"I can't talk numbers, but it will be significant, really significant changes to our workforce size.
"It's everywhere, it's a real challenge and there's just nothing pleasant about it."
The company had 1200 staff in total. About 1000 were based in New Zealand and the remainder in Singapore and Korea.
McDonald said he had been talking about a trans-Tasman bubble before the country went into lockdown and was encouraged to see Prime Minister Jacinda Ardern and Australian PM Scott Morrison opening the door to that possibility.
"I'm really pleased to see that the Government seems to be trying to get that to happen because that's really key for all of us, really. If we can get some alignment on it and actually make it happen would be really good."
About 40 per cent of its Queenstown business came from Australian tourists.
As for its domestic market, its Rotorua business had a 50/50 mix of domestic and international tourism. However, Queenstown was "far more reliant" on international visitation - between 70 and 80 per cent.
Tourism NZ's initiative to organise domestic packages with help from Air New Zealand, hotel and adventure operators was "critical" to kick starting the industry, he said.
"I think that sort of thing is really critical. If we can come up with really simple but attractive packages for families it would make a lot of sense."
He said the mood in Queenstown at the moment was "incredibly" quiet and locals were "very concerned".
There was also a large contingent of about 6000 migrant workers who were stuck in the town with no income.
There were also families who operated Air BnBs to help pay mortgages that would also be feeling the brunt too, he said.
"We're pretty worried, really, about the community here because there's probably 80 per cent that are reliant on tourism. It's probably even higher than that."
Totally Tourism owner Mark Quickfall said the announcement of further job losses in the industry was devastating and ongoing, but he was fortunate to still retain all of his 160 staff until at least the end of June, thanks to the Government's wage subsidy.
"There's no other industry that has been more impacted ... where does that leave us? We went from operating 21 helicopters, seven fixed-wing, a couple of vessels in Milford, heli-hiking and heli-skiing in winter with a lot of customers, down to zero.
"But we have to be realistic we are in lockdown at the moment ... and we're all under the pump."
While the wage subsidy had been a big help, "it's not going to help forever, of course".
"Most businesses are like a family and you do feel that responsibility of those that work for you. A lot of our staff have been with us for 10, 15, 20 years, so it's a difficult thing to deal with."
He was also keen to see the trans-Tasman bubble formed with Australia.
Queenstown Mayor Jim Boult told Mike Hosking on Newstalk ZB the whole situation, including Ngai Tahu's decision to lay off 300 staff, was "mindblowing" but understandable.
"It's just shock after shock after shock, it's very concerning.
"Most of New Zealand gets benefit out of the tourism industry but for us, it's our sole economic base and so visitors aren't coming any more, businesses have zero income and while I feel enormously sad about what Ngai Tahu have done, it's understandable as they have to cut their costs."
He accepted Queenstown had been too reliant on tourism but his council had been in talks with companies about diversifying.
"Prior to this we were in discussions with a couple of companies from Silicon Valley about setting up centres for excellence here and their interest was based on what a fabulous place to live it is."
Rotorua Mayor Steve Chadwick told Newstalk ZB Rotorua had been hit hard by the lockdown, and its $845m-a-year tourism industry had come to a halt.
"But worse than that, approximately 33 per cent, so a third of our people, are employed in either tourism or hospitality and accommodation so that's a lot of our people who are gong to be impacted."
However, she was thankful Rotorua had alternative industries to generate income including forestry, agriculture and manufacturing.
• Covid19.govt.nz: The Government's official Covid-19 advisory website
The Government has committed funding to the sector in an effort to support future plans.