Support Package Does Little For Hotels And Other Tourism Businesses Smashed By Closed Borders

The latest COVID support package largely ignores businesses that continue to struggle with the impact of closed borders.  Instead, it prioritises businesses that have been fortunate enough to rebuild revenues to near-normal levels after borders were first closed in March 2020.

Hotel Council Aotearoa (HCA) Strategic Director, James Doolan, responded to the new support package, which is available to businesses that have lost revenue as a result of moving to phase 2 of the Government’s Omicron response plan.

“New Zealand has fought the COVID pandemic using a combination of border restrictions and domestic COVID settings, such as lockdowns, domestic borders and the traffic lights system.  Why is government still refusing to offer targeted support to worthy tourism businesses that are disproportionately affected by border settings?  Hasn’t the border closure been a key part of our COVID response?”

The new support package requires businesses to show a drop in revenue of 40 per cent as a result of the shift to phase 2 on 15 February.  

“The Omicron outbreak has been pain-on-pain for hotels,” said Doolan.  “For hotels, the Omicron outbreak is like been kicked when you’re already knocked out.  The kick isn’t great, but it’s not the main problem”.

“Many hotels and other tourism businesses will not qualify for the new support package because the comparison is between revenue levels already smashed by closed borders.  If earnings were terrible before 15 February and terrible afterwards, you might not qualify.  That’s a bizarre outcome,” said Doolan.

The problem is easily fixed according to Hotel Council Aotearoa.  Support should be provided to any business that can show a 40 percent drop in income between the periods either side of 15 February, or alternatively if they can show an even larger 50 per cent drop in income when compared with the same periods in 2019, before borders were closed.

“Adjusting the qualification criteria to acknowledge the ongoing impact of closed borders is the absolute minimum that Government should do for battered tourism businesses”, said Doolan.  “A truly targeted support package until borders reopen properly would be even better.  The Prime Minister and Minister of Finance claimed that businesses have been able to ‘operate as normal’ at times since New Zealand closed its borders.  Once again, government has chosen not to support worthy businesses for whom the borders, and not domestic outbreaks, are the biggest problem”.

HCA was also concerned that the Prime Minister gave no further clarity on when isolation on arrival will be removed for international travellers.

“No high value international tourist will return to New Zealand if they are required to spend the first seven days staring at a hotel room wall”, said Doolan.  “If we want a good winter season, if we want to save Summer 2022/23, then our hotels, airlines, travel agents and inbound tourism operators need the green light to start marketing New Zealand without isolation on arrival.  Our nearest competitor Australia is open for business already, so time is fast running out.” 

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