Tour And Coach Industry In Danger Of Imminent Collapse

The Labour government recently provided clarity on border openings, with plans to open New Zealand’s domestic borders in December, then international borders in early 2022. With this clarity, many, including Labour, hope that the challenges businesses have experienced over the last 18 months will just disappear.

For some they will, but not for all. In fact, the challenges facing tour and coach bus operators will just get worse. For a sector that previously carried well over 2 million passengers a year – as of December 2021, a third of all tour and coach operators have closed shop forever. The industry expects that by October 2022, 70-80% of tour and coach operators will fold. “The businesses that have closed so far have been a trickle. It is nothing compared with what we are seeing on the horizon. Tour and charter operators are in serious trouble,” says Ramash Swamy from Yello Cabs in Wanaka.

These operators are a vital connector to tourist destinations all over New Zealand. The institutional knowledge lost with those leaving the industry is immeasurable.

International and domestic tourists will need to find alternative ways to travel the country. This could include private rental cars, which would mean significantly more vehicles on NZ’s roads. More vehicles mean more emissions. More vehicles mean more congestion. More vehicles also mean, unfortunately, more road deaths.

However, the rental vehicle sector is struggling too. It has also had very little support. The rental fleet is currently 50% below capacity nationwide, so how does the Labour government expect international tourists to travel round New Zealand? Will they walk?

“Whilst the destruction of the tour and coach industry appears to fit in with Minister Nash’s future vision for high-value New Zealand tourism, the Bus and Coach Association believes it is extremely damaging to New Zealand’s international reputation. It is also a massive kick in the teeth for New Zealand small businesses that have been fundamental to the development of New Zealand’s transport and tourism infrastructure. They contributed significantly to our economy for years when the going was good. Only to be hung out to dry at the first sign of trouble,” says Ben McFadgen, CEO of the Bus and Coach Association.

New Zealand tour and charter operators have just barely survived the last 18-months with no international tourism, and extremely restricted to zero domestic tour and charter services, particularly over the last four months. Their income is less than 10% of income received pre-COVID19. All this with no support, no direct engagement and no interest from the tourism minister in their plight.

“With NZ now ‘back in business’ there are no longer wage subsidies available for struggling businesses, yet operators are being expected to have their capital-intensive operations back up and running at a time when there will be no work until at least the end of January! Over the summer season, there are no school or university charters, no corporate charters, and no sports charters. This means no income,” says Brent Early from Leopard Coachlines.

The Department of Conservation has also reinstituted charging for the use of its facilities to operators from 1 January 2022. Hitting operators right when they are struggling to get back up and running.

If New Zealand’s tour and coach industry collapses, the tourism sector is in serious trouble. International tourism is not the reason New Zealand has COVID. It is a victim of COVID.

On behalf of New Zealand’s tour and coach industry, the BCA calls for:

(1) Core financial support if New Zealand’s international borders are not fully opened without need for quarantine, (despite New Zealand being almost 90% vaccinated).

(2) If the Labour Government won’t support struggling businesses - open the border fully, so that businesses can function.

(3) If Labour won’t directly support the sector and won’t open the borders then the sector must be assisted via a government loan scheme, to help ease the pain.

The Labour party, in particular Minister Nash, has shown a staggering lack of understanding of the complexities of business and the needs of small business owners during this pandemic. It has become abundantly clear that he lacks the credentials required to be effective. In fact, Minister Nash could quite well go down in history as the politician responsible for singlehandedly destroying a burgeoning tourism sector and a sustainable small business sector.

We do not ‘buy into his strategy’. For the sector to recover, we need support or a fully open border to safe countries, and Minister Nash’s removal as Tourism Minister.

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