The outbreak of COVID-19 has had an unreal crackdown on the global as well as domestic tourism sector as public places have been shut down, and transportation has been at a halt with the airlines grounded. Tourism was one of the first sectors to take a hit due to coronavirus and is likely to be the last sector to revive from the impact of the disease.
Tourism is a significant part of the economy of New Zealand. It is the largest export industry in terms of foreign exchange earnings by contributing 21 per cent of foreign exchange earnings (for the year ended 31 March 2019) and directly employing one in eight New Zealanders. During the same period, tourism in New Zealand accounted for 5.8 per cent of GDP and generated a direct contribution to GDP of NZ$16.2 billion.
Total GST revenue generated through tourists was NZ$3.8 billion for the period, out of which NZ$$1.8 billion was generated from international tourists visiting New Zealand. During the year 2019 (ended 31 March 2019), a growth of 5.2 per cent or NZ$843 million was seen in the international tourism expenditure to reach a total of NZ$17.2 billion and contributed 20.4 per cent to New Zealand’s total exports of goods and services.
Australia is New Zealand’s largest international visitor market, accounting for almost half of all international visitor arrivals, and the proximity and healthy relationship of Australia with New Zealand continues to drive consideration and arrivals.
Currently, due to the lockdown restrictions, closed borders with no domestic as well as international travel, the tourism industry is undergoing turmoil. The massive setback to the tourism industry due to the coronavirus is unmeasured till date. Speculations in the market say that the impact of the COVID-19 shall be apparent on the tourism industry till the mid of the year 2021.
However, there has been a heavy deployment of resources by the governments across the globe to tackle the spread of the COVID-19. New Zealand has emerged as one of the few countries to successfully deal with the situation in time with minimum losses to human life. As at 9:00 AM NZST on 08 May, there were two reported cases in the last 24 hours.
Every country is now looking to establish control over the spread of COVID-19 and ease the restrictions to open their economies for activities. Tourism is a special concern for the governments across the world as there are high chances of a bounce-back of the disease if social distancing and controlling measures are entirely disposed of.
Every country is expected to have its own ways of healing once borders reopen, considering the ability and desire of the consumers to travel. Moreover, Tourism New Zealand is currently engaged in developing its market insights to advise its activity in the post-COVID-19 scenario and planning is underway to be prepared and ready to launch when the right time arrives.
Let us look at five things that are likely to contribute to the revival of the tourism sector in New Zealand.
Disappearing COVID-19 cases
Till date, New Zealand has reported a total of 1,490 confirmed and probable COVID-19 cases, with 90 per cent of all confirmed and probable cases recovered from COVID-19. The country has dramatically moved to a level of reporting minimal COVID-19 cases while several countries are still struggling to tackle the situation. The decreasing number of new confirmed cases reflects the county’s preparedness and is an indication that New Zealand can soon move to open the economic activities. This shall directly benefit in the early opening of the tourism and related sector.
Easing Restrictions and Likeliness of Opening in Near Term
With the falling number of cases and flattening of the curve, there has been easing of restrictions in New Zealand. The country is already operating at Alert Level 3 of lockdown and pondering moving to Alert Level 2 if the situation continues to stabilise. Once the country can completely tackle the spread of the virus, there can be more relaxations in place.
Tourism-related activities like the hospitality industry are preparing to open soon with the introduction of further relaxations by the government. A lot shall depend on the opening of the hospitality sector and its ability to tackle the spread of COVID-19 effectively. This will further leverage the chances to open the tourism sector soon.
Strategic Initiatives by the Travel Industry
According to Tourism New Zealand, tourism industry shall play an essential role in New Zealand’s economic recovery in the post-coronavirus scenario. However, it will be distinct to the one that we are familiar with. The organisation is working closely with the Ministry of Business, Innovation and Employment (MBIE), the Department of Conservation, and with industry stakeholders to:
- Reimagine the way Tourism in New Zealand is governed
- How tourism is marketed both domestically and internationally
- The target population to whom it is marketed
- The way visitors are managed when they arrive on NZ shores
As travel businesses are keen on restoring the operations safely in the post-COVID-19 scenario, Innovativeness in the travel and tourism experience industry of New Zealand shall also be integral to support the industry.
Operate with Health and Safety Measures
With increasing relaxations, businesses are opening in compliance with health and safety measures. The tourism sector is not different and devising effective health and safety measures to tackle the spread of the disease can help to gain the confidence of the travellers and revitalise the tourism industry.
New Zealand has the advantage of tackling the virus sooner than many countries and can look forward to the opening of the tourism industry with adequate measures. Also, the willingness of travellers to travel shall be a significant governing factor as to how soon the tourism industry can reboot.
High Tourist Attraction from Australia
Australians form the highest number of travellers to New Zealand and spent a total of AUD 152.4 billion on tourism for the year ending December 2019. Australians are also believed to have the flavour for extreme sports, adventure and unique experience and the high standard of living is expected to create a push for New Zealand’s tourism sector once the restrictions are lifted.
Although international tourism is a less thought-of thing at present, the proximity of New Zealand with Australia makes it a likely prospect for opening tourism activities too. Australia has also been able to reduce the number of COVID-19 cases significantly and is looking to ease some restrictions in the country.