Working holiday visitors to Rotorua are moving on with too few backpackers operating

Rotorua's Rock Solid Backpackers is one of two backpackers open for business in the city. Photo / Laura Smith

Working holidaymakers keen to stay in Rotorua are moving on due to a lack of accommodation options - at a time when their desire to work is badly needed by a struggling hospitality sector.

As of November 28, there have been 19,723 Working Holiday Visa (WHV) holder arrivals in New Zealand since the border re-opened and 38,414 applications approved. This was up from 34,435 approvals and 15,637 arrivals as of November 5.

Rotorua’s Rock Solid Backpackers is one of two backpackers still open for tourist business in the city. Owner Belinda Hargreaves said visa holders looking to stay for longer than a few weeks struggled to find accommodation, so rebuilding staff numbers had been slow.

She said the city was losing out to other places on visitors at a time when Rotorua businesses had been struggling to find staff.

Part of the Government’s response to staffing shortages across the country was to temporarily double numbers under the Working Holiday Scheme and extend visas to retain labour already in the country.

A number of hospitality business owners in Rotorua took to Eat Streat in October in protest of what they believed was an expensive and complicated immigration system.

Rotorua’s Hennessy’s Irish Bar owner Reg Hennessy joined the protest.

Speaking with the Rotorua Daily Post Weekend this week, the Hospitality New Zealand Bay of Plenty spokesman said he would typically hire five or six WHV holders during the busy summer period before the pandemic.

Most of these employees chose to stay in backpackers, but with so few left in the city offering this, ideal staff members were not staying.

He recently interviewed an Irish visa holder who wanted to work at the bar, but left for Napier as she could not find anywhere to live.

“It’s another kick in the guts.”

The tourists were coming, he said, but there was a need to fix the shortage and rebuild accommodation options to meet their expectations.

Indian Star owner Ray Singh said there were instances of new employees coming from overseas, and while he provided rental accommodation to long-term employees, he was struggling to find anywhere for new staff to live.

Rotorua Restaurateur Ray Singh, owner of Eat Streat's Indian Star. Photo / Andrew Warner

According to RotoruaNZ’s list of accommodation providers, of the 14 listed backpackers, two were operating, two were closed and 10 were listed as providing emergency housing.

The list could be found on its accommodation dashboard. It worked with an external provider to create the list and information had been sourced through online booking sources, industry feedback and other supplementary information such as Ministry of Social Development grants.

Its website provides a disclaimer that this information may not be 100 per cent correct.

RotoruaNZ research and insights manager Justin Kimberley said the purpose of the dashboard was to provide visitors with confidence the accommodation they were booking was not a sole or mixed-use provider of emergency housing.

“We want visitors to have the best possible experience in Rotorua so it’s important they have the correct information available to them regarding accommodation options.

“We classify emergency housing as visitor accommodation that is no longer used for the sole purpose of providing short-term visitor accommodation. This is also in line with the terminology widely understood by the general public.”

One former backpacker accommodation provider, listed on the Rotorua NZ list as providing emergency housing, said this was not the case.

He said they provided rental accommodation to beneficiaries, and were paid directly by Work and Income for this. He said 99 per cent of tenants were beneficiaries.

He spoke to the Rotorua Daily Post anonymously as he feared there would be negative feedback from the community for providing this accommodation.

He said there were not enough tourist numbers coming through to be able to switch back to providing accommodation to backpackers, and there would be a minimum $50,000 investment needed to bring the building back up to the standard wanted for that.

He did not want to provide accommodation to both tourists and beneficiaries as he did not want to hurt visitor experiences.

Most tenants, who had no agreement and paid a maximum of $350 a week, stayed between a few weeks and a few months, he said.

Rotorua NZ marketing manager and Rotorua-based Backpacker Youth Adventure Travel Association board member Haydn Marriner said the accommodation issue was not exclusive to Rotorua, with long-term hostel accommodation not as strong as it was pre-Covid.

“What we are finding is that successful employers of backpackers are providing accommodation security in addition to employment.

“This doesn’t mean they are paying their rent, but simply holding bonds for accommodation and guaranteeing that with the job is a place to live at a reasonable price.”

He said there were cases, such as in Queenstown, where large employers had “gone the extra mile” and were setting up their own private accommodation to combat the lack of available affordable rentals.

“The backpacker worker is facing the same affordable rental shortage that New Zealanders are during these times.”

But this limited local market also meant there was “tremendous opportunity” in Rotorua for other high-quality backpackers, he said.

Globally, hostels were becoming more and more high spec, he said, giving the example of the $40 million Lylo hostel which opens this week in Auckland’s CBD. Marriner said this signalled there was some serious investment into the NZ backpacker sector, with more to come.

“Rotorua is a single major hostel investment away from realising its potential with this market and possibly providing much-needed staff to our local businesses.”

Ministry of Social Development regional commissioner Mike Bryant said its role was to make sure people with an immediate urgent housing need received help to access emergency accommodation.

“Whenever someone comes to us for help with emergency housing, we work with them to identify a suitable accommodation based on their particular needs and what is available at the time.

“We provide advice to clients on emergency accommodation providers who we know have space available.”

He said the accommodation providers it worked with, such as backpackers and motels, were commercial businesses that set their own rules and standards around who they accommodate.

“Unlike Ministry of Housing and Urban Development Te Tūāpapa Kura Kāinga (HUD), we do not contract with accommodation providers for the supply of emergency housing, rather the relationship is between the guest and the provider.”