“The results show that the sector have made significant changes to their operations to try and keep their business alive since the Covid-19 outbreak that and many are orientated to welcome Kiwi tourism,” says Tourism New Zealand Chief Executive Stephen England-Hall.
“The industry has been focused on survival, it’s now time to work towards how we can thrive again and what is required to get there.”
Three quarters of the 1619 businesses who responded to the survey said they had changed their operations to adapt and that 88% of businesses think they can pivot their product to the domestic market.
“While there are tough roads ahead, I’m confident that there will be a viable and productive visitor economy for New Zealand. It’s vital that we continue to support those who need it, so that when activity does resume, there is a sector to return to.”
“Having this data was invaluable and we thank the industry and stakeholders who shared their information, experiences and ideas with us,” says England-Hall.
The information was collected by Tourism New Zealand and helped inform the government’s response. The survey data along with information collected through stakeholder engagement was used by Tourism New Zealand to inform its work on re-imagining the tourism sector. This will now form an input into the Tourism Taskforce that was announced yesterday.
“Our re-imagine work showed broad agreement across the sector on both the benefits and challenges that existed in the tourism system before Covid-19, the opportunity for change post Covid-19, and the need for urgent action and collaboration across the sector to achieve this,” says England Hall.
“The process also made clear the importance of ensuring there is a tourism sector to re-imagine – and this formed a key part of Tourism New Zealand’s advice to the Government in the lead up to the Budget.”
1619 responses were received across a wide range of industry sizes with 88% of respondents identifying as a sole trader or small business.
Answers were received across New Zealand, with 70% of responses from outside major population centres. Most responses came from businesses in accommodation (45%), followed by visitor activities and services (29%), and transport (7%).
Changes to business operations
- 79% of businesses are drastically changing their operations with only a small proportion of businesses (12%) staying in business as is
- 26% are sharply reducing capacity
- 27% are placing their business in hibernation
- 6% are pivoting to other business opportunities
- 18% are at high risk of ceasing operation (with 1% of respondents no longer operating)
Accessing government support
90% have accessed some sort of government assistance
- 87% have accessed the wage subsidy in April
- 11% are accessing government business financing
- 18% are accessing tax relief
Current business decisions
100% of businesses surveyed report making hard decisions to keep their business alive
- 37% have reduced staff
- 31% are mothballing assets and operations
- 9% have sold assets.
- 61% of businesses are also looking at other ways to reduce costs
Projections for the future
Businesses owner are projecting large scale job losses.
- Operators are forecasting layoffs to 52% of their workforce
- In regional New Zealand, operators forecast 49% lay-offs.
- 81% businesses say they will return to work as demand returns
- 16% plan to quickly restart at original operation levels
- 64% will gradually return to levels of operation to meet demand
- 26% will re-start with a new business model
- 3% do not believe they will be able to reopen
How operators will look to plan future operating capacity
- 77% will look to decreased domestic alert levels
- 65% border reopening
- 51% tourism high season starting
- 42% large events (e.g. sport, culture) resuming
Perceived major barriers for tourism sector reopening
- 67% value of tourism spend
- 62% volume of tourists
- 31% suitability of their product
- 7% access to staff
- 4% skills gap
- 88% of businesses think they can pivot their product to the domestic market
- 25% will require additional support to pivot their product.
*Note that participants were able to choose more than one answer in some question