Queenstown braces for mass layoffs
The South Island tourist mecca usually attracts 3.2 million tourists a year, but the tap has turned off and businesses are eyeing job cuts. David Williams reports.
Large Queenstown businesses might start laying off staff as soon as today, Mayor Jim Boult says.
Border restrictions and quarantine measures to stop the spread of coronavirus have led to a huge reduction in people arriving at Queenstown’s airport and a massive drop-off in bookings. Many Queenstown companies are welcoming the Government’s business bailout package, announced yesterday, but it’s aimed at small-to-medium businesses, with payments capped at $150,000 per company.
It seems certain larger Queenstown firms will soon have no customers and will be forced to close, at least temporarily.
“Speaking to an operator this morning, they said we’ve got reasonable bookings today, tomorrow, but as of the weekend it’s less than 10 – and this is a big operator,” Boult, who is also chairman of tourism company Wayfare Group, says.
“I think this time next week you’ll be able to fire a gun up the street.”
Another Queenstown tourism business which attracts nearly 200 customers a day in peak season says within two or three days that will drop to single digits. Boult says every big business in town is contemplating large layoffs.
“I expect that you’ll start to see that announced as of today/tomorrow. They just don’t have any choice. No business, doesn’t matter how big and how robust it is, can afford to pay for staff to sit round doing nothing when there’s no customers coming in.”
Queenstown has one confirmed case of coronavirus – a Danish woman who was hospitalised for one night, but has since been discharged. The number of confirmed cases across the country rose to 20 today, an increase of eight cases, the Ministry of Health confirmed.
“For most operators, the domestic market is probably less than 10 percent of normal trade.” – Mark Quickfall
Mark Quickfall, the owner of Totally Tourism, has a staff of more than 200 people who operate tourist flights in helicopters and planes, as well as a Milford Sound cruise operation. He expects to tell his staff about job cuts within 24 hours, as it reduces operations.
“They realise that if you’ve got a fleet of 21 helicopters and you’re only going to be operating six you don’t need 30-odd or 40 pilots,” Quickfall says.
Totally Tourism is heavily reliant on international tourists. Some visitors are postponing their bookings, which is good news, but many, including large conferences, are cancelling.
“For most operators, the domestic market is probably less than 10 percent of normal trade,” he says. “If your business is geared up, staffing wise, for 100 percent and suddenly you’re only getting 10, there will be some job losses, no question.
“We’ve got over 200 staff, and at the moment we’re flat out to see what levers we can pull to retain as many jobs as possible using the wage subsidy that came out from the Government to buy us some time. And really looking how we redeploy some people or re-purpose their job roles. This is unprecedented and we don’t know how long it will go on for.”
From 30 bookings a day to none
Nik Kiddle owns the Villa Del Lago luxury apartments – and happened to run against Boult in last year’s mayoral race. He made one staff member redundant today and another is likely, from a peak workforce of staff and contractors of 15.
“We’re going to take steps to protect as many positions as possible using the Government wage subsidy package, which we welcome very much. We think it will assist to limit the damage.”
The worrying thing, Kiddle says, is the town hasn’t hit rock bottom. There is a flood of cancellations, even from winter, but no new bookings. “We get probably 30 bookings a day, and we’re getting none.”
At this stage, Villa Del Lago will be empty on March 30, with only patchy bookings after that. And as Kiddle says, many of the bookings in the coming weeks may also be cancelled.
“We’re also in conversation with the bank and looking forward to some mortgage interest and principal relief, but there’s nothing clear from the banks yet.”
One of Queenstown’s biggest employers, NZSki Ltd, operates Coronet Peak and The Remarkables ski fields, as well as Mt Hutt in Canterbury. Chief executive Paul Anderson says it plans to open all its mountains on its advertised dates, adding: “But we’ve got a lot of scenarios to work through.”
Without Australian tourists, its visitors are expected to drop by 30 or 40 percent, he says. Some international staff, ski industry professionals who switch hemispheres to work winter seasons, are still planning to work in Queenstown. While casual travellers in lower skill roles might not come from overseas, he hopes it can find people in New Zealand to do that work.
The likely scenario this year is a domestically-focused ski season, he says, with a reduced workforce – with cuts in places like food and beverage and restaurant staff. “We’ve got to make sure we staff the mountains at a level to fulfil all our health and safety obligations and ensure the safe operation of the mountain. There’s a certain level you just can’t drop below.”
He’s unsure how skifields would manage the ban on mass gatherings of more than 500 people. “In terms of people’s mental health, allowing them to continue to do some of the recreation activities that we love down here, it would be great for us to continue with that and that’s what we’re planning for at the moment.”
Mayor Boult will meet with government ministers and representatives from the visitor and accommodation sectors tomorrow. Top of the list is central government support for businesses in his district, which extends to Arrowtown and Wanaka.
Queenstown will be the worst-hit place in the country by the travel restrictions, he says.
“I’m really sick in the stomach thinking about all the businesses, how they survive, how the folk whose income is taken away or severely reduced, how they pay their mortgages, how they continue to provide for the families. It worries me enormously and I will be doing everything in my power to get the best possible outcome for this district.”
Quickfall, of Totally Tourism, is a 40-year veteran of the industry, having twice been a chairman of Destination Queenstown, the tourist town’s marketing and promotions agency, and a former chairman of Skyline Enterprises, which runs the town’s gondola and luge operation.
He acknowledges the need for the restrictions, and the fact the virus has hit all parts of the world, and all businesses.
Still, this situation will cripple the country’s tourism industry, he says, leaving hotels empty in some tourist spots. Quickfall doesn’t think domestic tourism is high on many people’s agenda right now.
“Every business [in Queenstown] now, no matter how solid you are, no longer do we have business plans, we have survival plans. Unless for some reason this turns around really quickly, we’ll just see, I would suggest, quite a few businesses close and others just struggle.”
Totally Tourism is determined to get through the crisis, he says. “We’ll scale down accordingly and hunker down and manage the businesses with the objective of being here when it picks back up, when those borders open.”
The problem is knowing when that will be. Initial travel restrictions, announced on Saturday, will be reviewed in 16 days, but are expected to be extended. Quickfall says it was initially thought it might take six months for tourism to recover. “I think most people are realistically looking at a minimum of 12 months, but we just don’t know.”
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