‘Pushed to the brink’: Hospo and tourism under pressure in build-up to Christmas
The hospitality and tourism sectors are still struggling to fill positions in the lead up to the holiday season. Photo / Getty Images
Despite being pushed to the “brink” due to labour shortages and fears New Zealand’s visitor reputation could be tarnished, the hospitality and tourism sectors are hopeful the upcoming holiday season will be a prosperous one.
In the Bay of Plenty, international visitor spend jumped by more than 900 per cent in one city as businesses “clawed” their way back from the “rollercoaster ride” of the last few years.
RotoruaNZ chief executive Andrew Wilson said Marketview data shows in October, international visitor spend jumped 904 per cent to $6.8 million compared to the same month last year. Over the same timeframes, domestic spend hit $29.3m, up 26.3 per cent.
Staffing shortages continue across the board. However, most businesses in the local attractions and activities space had managed to recruit seasonal staff.
“We are hearing that skilled workers such as chefs are harder to find, which is further impacted by the immigration challenges experienced.”
Pre-Covid tourism contributed 11 per cent to Rotorua’s GDP, and he hoped international visitors would help it return to that level.
Operators were anticipating an extremely busy summer, and many had experienced a significant increase in visitor numbers compared to previous years.
“In addition to the high number of international tourists we are seeing, and the packed events schedule for the coming months, we expect that Rotorua will be much busier than it was pre-Covid.”
Tourism Bay of Plenty general manager Oscar Nathan said the entire region was ‘‘extremely energised’’ about the upcoming summer period.
Most of the available accommodation was already booked from Christmas Eve through to January 8, with another peak over Auckland Anniversary weekend.
“We are buoyed by the number of new operators and products that are coming into our local tourism sector. This includes several Māori operators offering small group tours that will encourage visitors to fully engage with our indigenous stories and culture.”
He was also well aware of the pressures the hospitality and retail sectors were under nationwide to attract and retain staff.
“We hope that the revision of the working visa rules and the opening of international borders will help to alleviate this. Both the tourism and hospitality industries provide incredible, global career opportunities – whether as a first job or as a life-long career.”
Tourism Export Council forecasts the number of international arrivals will exceed 2.1 million in the year to May, 2023, 63.1 per cent of the number in the 12 months to May, 2019.
Adventure Helicopters pilot Will Dolman said the last couple of years had been a ‘’rollercoaster ride”, and the price of fuel and other components had made it harder.
It had to sell one helicopter and downsize to make the family-owned and operated business economically viable, but he was optimistic about the future.
“We’ve held in there… We are fortunate we do a range of different activities, including training and learning to fly. However, in terms of scenic tourist flights and charters, we are coming into our busy season now.”
Dolman said international tourists had started to return, and the business was grateful locals had also taken advantage of the sightseeing flights which encompass the stunning coastlines, whales and dolphins.
Skyline Rotorua general manager Andrew Jensen said like many local businesses, it was experiencing labour pressures in a tight employment market.
“These are across most areas of our business. Candidate numbers are in line with the constrained nature of the labour market. We have had to adapt, just as we did through the Covid pandemic, to be flexible and agile in our operating models.
“Our focus continues to be on delivering a world-class customer experience for our visitors.”
Jensen said it had continued to see good domestic support throughout the year and it expects this to continue through summer.
“We’re on-track to complete the next phase of our Luge track upgrades prior to the busy Christmas and summer period. The first phase of the track upgrades was completed back in May, and visitors can now experience a whole new series of corkscrews and tunnels as part of their Luge experience – over seven kilometres of gravity-fuelled fun.”
Waimarino Group operated across the region, and director Blair Anderson said it had invested heavily in staff and remuneration, which had stood it in good stead.
He said the Waimarino Education Charitable Trust had suffered massively during Covid and was still trying to “claw its way out of financial debt”, but numbers had started to pick up.
It had invested in a new riverside grotto café with Naden Tamihere, and Anderson said it was really excited about the venture.
The group’s glow-worm kayak tours were also making a strong comeback alongside its waterpark activities, and he was feeling positive and upbeat about the future.
‘’The last two years have killed a lot of businesses that were very hard done by, but Waimarino is surviving and investing into the future.’’
Hotel Council Aotearoa strategic director James Doolan said some hotels were reporting 10-20 per cent shortfalls in the number of full-time equivalent staff, and in the worst cases, hotels were having to cap room supply in order to give staff time off and prevent burnout.
Others had closed their restaurants on some nights amid a severe labour shortage.
In the first 12 months after borders closed, the accommodation sector lost 54 per cent of its workforce, and there were still shortages in various entry-level roles like room attendants and waitstaff.
‘‘New immigration settings and visa-processing delays are not helping things.’’
RevPAR (Revenue per available room), a performance measure that combines occupancy and room rate, was revealed in the three months to October to be $131, six per cent below the same three-month period in 2019.
Meanwhile, operating costs had increased considerably due to inflation and the cost of living crisis.
Doolan said it was delighted the international borders were open for the summer, but there are real concerns about service levels and damage to “Brand NZ” if we cannot find solutions to the staff shortage problem quickly.
Hospitality New Zealand accommodation sector Bay of Plenty chairman and 850 Cameron Motel owner, Tony Bullot, said every sector was short of workers, and it was no exception.
“It’s affecting motels seriously. There are members out there cleaning a lot more rooms than they normally would. In a small business, the first thing to give is any leisure time, and you end up picking up the slack.”
“The only flexibility you have got is your own man-hours – if you have to do your accounts at 3am, then that is what you do.”
Holiday bookings were looking good and the cruise ships were back, which was great, but Bullot said the current situation was “crippling and hurting economic activity, that’s for sure”.
Restaurant Association chief executive Marisa Bidois said a member survey found 85 per cent of businesses were understaffed.
Two-thirds had to temporarily close in August due to staffing challenges.
“Feedback is that businesses are permanently recruiting – 78 per cent of those businesses currently recruiting say that they currently receive fewer than five applications.”
In her view, one of the biggest issues was the current immigration settings that made it “increasingly challenging for our members to access the workforce they need”.
“One of the most common pieces of feedback to our helpline is the frustration in visa processing times.”
Margins in the hospitality industry were deceptively low, with an average between just 4-7 per cent, and food prices had reached a 14-year high of 10.1 per cent.
“There isn’t a lot of wiggle room there. Inflation is already heavily impacting input costs. This already puts margins under pressure. Our sector is being pushed to the brink with compounding compliance costs, difficulty in finding staff, and restrictive immigration policy which has made it hard to bring workers in.”
However, members were optimistic and excited about the onset of the festive summer season.
“The summer season is an incredibly important time of year for our businesses. With the last two years of subdued trading, it’s more important than ever that hospitality is able to operate at full capacity to recoup some of the losses. We are also very conscious of being able to offer our visitors first-class dining experiences, but this is challenging with the current worker shortage.”
Ministry of Business, Innovation and Employment data on electronic card transactions related to tourism reveal in September, domestic spend jumped by 24 per cent compared to the same month last year. Over the same timeframes, international spend increased by 2 per cent,while in the Bay of Plenty, international spend fell by nine per cent and domestic spend was up by 18 per cent.
Overseas visitor arrivals in New Zealand numbered 151,300 in September, 2022, down 42 per cent from September, 2019.
Minister for Immigration Michael Wood said it was listening to the concerns of these sectors, and working with them to take practicable steps to unlock additional labour, as businesses work towards more productive and resilient ways of operating.
There had now been approvals for businesses to recruit internationally for more than 88,000 positions since it streamlined the system to coincide with the borders reopening.
To date it had approved visas for more than 800 cooks, 212 chefs, 89 kitchen hands, 82 restaurant managers, and 51 other hospitality workers, he said.
‘‘I acknowledge wait times have been longer than desired but timings have improved, with the average time to process job checks going from 13 days at the start of August to 4 week days currently.”