The return of tourists has started slowly following the relaxation of Covid rules. Photo / Supplied
New Zealand is in danger of being left behind by tourism rival Australia and other countries that have opened up fully, says a tourist sector group.
While New Zealand will open to visitors from visa-waiver countries next week after earlier scrapping isolation for Australian arrivals, the Tourism Export Council NZ says the lack of travel restrictions across the Tasman disadvantages this country.
From last week Australia joined a growing list of countries that have scrapped pre-departure testing taking out the risk of travel to that country being disrupted by a positive Covid-19 test.
New Zealand still requires a negative test before people can fly to this country. The Government and health experts say this provides another layer of defence as the country opens up, and testing by an arrival has picked up the new XE strain.
Epidemiologist Michael Baker said there was still a rationale for pre-departure testing but said anything to make it as least disruptive as possible needed to be explored. Early figures showed infection rates among arrivals from Australia were around twice that of the New Zealand population but he told the Herald inbound testing requirements needed to be constantly reviewed following dialogue between airlines, the travel industry and government.
Council chief executive Lynda Keene said the testing requirements and Australia being quick off the mark to promote itself means New Zealand could be left behind.
"It might be a real struggle for New Zealand to get the rebound of international travellers we hope for if we can't keep pace with Australia. We're kind of back, but we've just tipping our toes in the water,'' she said.
Inbound tour operators (ITOs) have already seen bookings switch from New Zealand to Australia because offshore travel partners can't keep waiting for more decisions from the Government. The tourism sector is also urging the Government to quickly name a date for the lifting of the ban on cruise ships so operators can look in schedules for what before the pandemic was a $550 million a year industry.
The tourism sector earned more than $17 billion a year in foreign exchange before Covid-19 hit more than two years ago.
''It would be a tragedy if the New Zealand industry can't maximise the return of visitors that matches airline capacity over the next six to twelve months, '' said Keene.
To be globally competitive and take advantage of the demand ITOs see building, the country needed to have more urgency to ''shout out'' that New Zealand is open and remove all barriers.
In Singapore last week, Prime Minister Jacinda Ardern said it was now time to demonstrate that the country was open for business, students and visitors.
But Keene, and others in tourism say the country is ''sort of'' open because of the restrictions.
She said New Zealand and Australia are once in 10-year visitor destinations for big spending long haul tourists from Asia and the Northern Hemisphere.
''We can't afford to be complacent and assume just because people like New Zealand that they will commit to travel. We are at risk of losing inbound business that was booked for NZ to Australia if we don't present as a desired and easy to travel destination."
International tourist arrivals had got off to a slow start with the opening on April 14 of arrivals from Australia who no longer have to self-isolate.
''We know the majority of those coming from Australia will be visiting friends and relatives (VFR) visitors. Ski/winter visitors will start to come across in July 2022.''
This is borne out by figures out just before Anzac Weekend.
During April 2019 there were about 131,000 visitor arrivals from Australia in April 2019, but the number of arrivals last week was running at about a quarter of what they were pre-pandemic, Ministry of Business Innovation and Employment figures show.
And, as forecast, they were overwhelmingly travelling to visit friends and relatives. Around 80 per cent were VFR travellers last week, compared to just under 16 per cent for the same time in 2019.
One Auckland hotel is also seeing the VFR trend. Franz Mascarenhas, Cordis Auckland managing director, said bookings from Australia were improving but the bulk of current arrivals are visiting friends and family.
''However, we see this increasing over time with large numbers coming in to attend meetings and conferences/incentive movements, which have been suppressed so far thanks to Covid restrictions.''
Keene said the Australian government had recently allocated $60m into extra destination marketing funds into global markets. The New Zealand government has not increased Tourism NZ's marketing budget after capping it at around $110 million before the pandemic. The agency has continued to promote the country overseas during the pandemic and has refreshed its push into Australia.
Keene said while tourism businesses here have benefited from wage subsidies, Australian ITOs have also just got a third tranche of grant support to help them recruit staff back.
''NZ ITOs are still waiting to hear if they will receive funding or any targeted support,'' said Keene.
From May 2, visitors from visa waived countries such as the United States, Canada, Britain Europe, Germany, Singapore, Japan will be able to enter isolation-free.
Keene said the traditional flow of holiday visitors will not start until October when northern hemisphere travellers seek warmer weather in their winter months.
Within a week of the announcement by the Government that border rules would ease for long haul travellers, encouraging bookings began to flow back into the NZ inbound system..
''However, the survivability of many businesses is still a major concern. Some businesses might not make it to June let alone October. It will take a few months of cashflow to have a positive effect on operations. There is still a long way to go for the industry to have confidence in its future. It will be a slow rebuild and there is still a level of nervousness out there.''
There still hasn't been a date set for non-visa waiver countries, notably China and India.
Keene said international visitors were critical for the visitor economy.
Domestic spend is crucial for businesses and generates revenue on a 'bread-and-butter' type of basis. That is, enough cashflow that helps break/even or create a small surplus.
In contrast, international visitors spend money seven days a week and most international bookings are booked in advance so businesses can plan staff rosters and purchase local food/beverage in advance.
This helps with operational planning and cost management.
International spend helps creates the ''cream'' for a business, said Keene. When a business generates profit, it allows the business to create more jobs, build new infrastructure (hotels, luxury lodges, marinas etc.), upgrade equipment and fleets, undertake refurbishment programs, implement new technology and systems and innovate with new products and experiences.
She listed steps that needed to enable success:
• Targeted tourism funding is needed for international tourism businesses to help get them to the start line of October 2022
• Government needs to remove pre-departure testing and arrival testing as soon as possible (now).
• Industry urgently needs a date from government for the return of cruise ships to NZ. Every day that passes puts NZ at risk being taken off global cruise line Pacific itineraries. Prior to Covid, the number of cruise passengers put this sector of the industry as NZ's third largest visitor market behind Australia and China. NZ needs a strong cruise industry to assist with the country's economic recovery.
• A firm date needed from government when visitor visa countries can return to NZ (China and India)
• Focus by government in expediting processing of Working Holiday Visa holders
Kevin O'Sullivan, chief executive of the New Zealand Cruise Association said that the PM drumming up tourism business in Singapore was ''ironic'' when the borders are still firmly closed to cruise ships that could deliver 350,000 passengers keen to spend in the regions.
Because the Government has not made an announcement about the maritime border opening there continued to be cancellations. So far 250 port calls lost and there will be many more. It takes a considerable time for cruise lines to plan deployment and any uncertainty means they will go (and are already going) elsewhere.
''We believe that government has received clear advice from agencies (including a risk assessment from Health) that the maritime border can be safely opened. So don't understand why ministers are not taking that advice and costing the New Zealand economy many millions of dollars - probably more than $150m so far.''
O'Sullivan is in Miami this week and will be part of a regional panel at Seatrade Cruise Global, the industry's annual get together. Before leaving he said he ''didn't want to have to stand up and say we are not open to cruise, but I may have to.''
Rates for hotels have soared in one tourist hotspot while others have suffered.