Queenstown Lakes Mayor, Jim Boult, anticipates that many businesses could end up boarded up by the time international visitors return to the tourism hub. This is supported by a recently released report by the Treasury that indicates that Otago and Southland will be amongst the hardest hit regions by the pandemic.
The report does predict the district’s GDP could resurge with a 6.4% rise by 2025. Boult, however, fears this boom will not apply to the tourism sector and is seeking government support in providing a rescue package to the hospitality and tourism sectors. He is also hoping for a reintroduction of the wage subsidy to support this.
With such backing, Boult hopes that tourist dependent businesses may be able to survive in the short term with reduced staffs. Keeping them afloat for long enough till visitors return. But this seems overambitious given that Infometric research suggests that the South may not begin recovering from the pandemic effect until after 2025.
Otago is expected to suffer the worst decline with a 3.3% drop in GDP for the period 2020 to 2022 with a subsequent 3.4% rise from 2022 to 2025. This recovery, however, relies on overseas travellers making a comeback.
Famously known as the adventure capital of the world, Queenstown has taken quite the beating over the last year thanks to the absence of international visitors that do much to support this once thriving tourist economy. More than half of the region’s economy has been reliant on tourism pre-Covid. Now, prime establishments like the 220-room Millennium Hotel and famed Muskets and Moonshine bar have closed their doors.
The region welcomed over a million international visitors in 2019. A figure that has dropped to almost nil since March 2020. Queenstown did see a boost in domestic tourism over the Christmas and New Year holiday period. This has however dwindled back to almost nothing as Kiwis returned to work and school. And, given that international visitors spend four times as much as domestic tourists, it has resulted in quite a fall in revenues for tourist businesses.
Tourism Minister, Stuart Nash, has advised businesses to take advantage of the government’s existing interest-free loans for small businesses and $400 million Tourism Recovery Package. A recently announced expansion of the government’s Flexi-wage initiative may also offer further assistance. The scheme will help businesses take on new workers and provide increased support for those that are unemployed and wish to become self-employed.