By James Doolan, Strategic Director, Hotel Council Aotearoa
A Steamboat Not A Jetboat
The post-COVID recovery in international tourism is well underway, however Hotel Council Aotearoa’s previous predictions that the recovery would be a multi-year affair are proving accurate.
Hotels are cyclical businesses that rise and fall with the tide. Once borders were closed, air links collapsed and staffing levels slashed, it was always going to take time and patience before the sector was back at full speed.
Like a magnificent steamboat on its maiden voyage, the Kiwi hotel sector is afloat and building momentum – no longer stranded on the riverbank. But there is still a lot of work to be done before things are back to “normal”.
Milestones during the three-year battle against the COVID global pandemic tend to blur into one at this stage, so it’s worth reminding ourselves that New Zealand’s international borders were still effectively closed in January 2022 after the first cases of Omicron. A possible reopening of borders was signaled for the start of summer 2022/23.
Thankfully, robust advocacy from Hotel Council Aotearoa and others contributed to an earlier reopening, which likely saved hundreds of jobs and businesses. In truth, the sector was very close to breaking point. New Zealand’s tourism economy would have been permanently damaged if we stood by and remained isolated while the rest of the world reconnected once again.
Unfortunately, HCA could not replicate that advocacy success in other areas. New Zealand, like many other countries, is suffering from a massive shortage of tourism and hospitality workers. It’s near-impossible to fill entry-level hospitality jobs, especially in resort locations such as Queenstown which are also experiencing a cost-of-living squeeze.
HCA clearly signposted the looming labour shortage to Government in mid-2020 – well before border reopening was even a thing – but we failed to get buy-in for targeted policies and interventions to make it easier to attract foreign workers to fill the gaps.
Our sector expertise was ignored or overlooked, which is frustrating for everyone whose livelihoods are affected by government policymaking.
As a direct result of chronic labour shortages, stories of limited service and reduced opening hours are now commonplace throughout New Zealand. A key service-delivery pressure point in 2023 will be the FIFA Women’s World Cup, which is being co-hosted by New Zealand and Australia. New Zealand’s true ability to deliver international travelers an even adequate experience will be fully tested on the world stage.
Over time, technological changes (self-service, anyone?) and more domestic training and career pathways will no doubt help to ease some of the global reliance on migrant workers in tourism and hospitality. But the fact that isolated locations with low populations turn to imported hospitality workers is not a market failure and will never go away completely. It’s important that government policymaking is more nuanced and thoughtful around this topic, especially when tourism was once New Zealand’s largest export earner.
New Zealand can definitely improve how it trains tourism and hospitality workers. We must do a better job creating sustainable career pathways for New Zealanders wanting to build lifelong careers in the sector. Why doesn’t New Zealand aspire to building a reputation for tourism tertiary education that rivals Switzerland or the USA (in particular Cornell)? To truly transform the sector, we need visionary goals and the right policies to bring those goals to fruition.
The biggest challenge and opportunity for 2023 is undoubtedly the return of outbound Chinese travel. Countries that welcome and host those first waves of outbound Chinese travelers in the best possible way will be the most successful tourist destinations for the next decade, notwithstanding the broader geopolitical risks from allowing economies to become too reliant on Chinese spending. That means: ensuring visa processing is efficient and dependable; not imposing unnecessary COVID-relating testing regimes (when COVID is now globally endemic); welcoming Chinese travelers warm-heartedly and sympathetically following the recent upsurge in COVID cases there. Finally, while acknowledging that costs have increased and dynamic pricing is an industry reality, we must still strive to deliver value-for-money. Otherwise, long-term reputations will take a hit.
Once again, it’s the basics that matter in 2023. Ultimately, the COVID period will be remembered for the constant overhang of fear, restriction, illness and death. Successful hotels, tourism businesses and countries will be those that actively create hassle-free and life-affirming travel experiences. In 2023, guests are once again seeking the joy of travel.
Get on board the steamboat and enjoy the view!
