Lockdown 2.0 shatters tourism hopes of seeing international visitors return in 2022
Bejon Haswell / Tips
Infometrics senior economist Brad Olsen said the first 10 days of the lockdown represented a loss of $ 500 million in spending to the national economy.
Tourism companies waiting for the resumption of international travel will have to change their game plan thanks to “containment 2.0”.
Infometrics senior economist Brad Olsen said many tourism operators are treating the domestic market “like a blip” until international travel and tourists return.
“We think this is not the right plan and we believe that tourism should focus on domestic travel as an integral part of their business.
“In New Zealand, we need to see the product offering emerge from this domestic sector.”
Olsen delivered a snapshot of the impact of the 2021 lockdown to Waipā District Council via audiovisual on Tuesday.
He said the first 10 days of lockdown saw a loss of more than $ 500 million in spending to the national economy, which is a 49% drop.
“It’s a huge hit but not as deep as the one we saw in Lockdown 1, we saw around 60-62% drop in spending.
“But companies in Lockdown 2.0 have found a way to operate at Tier 4 and Tier 3 with more contactless deliveries.”
Olsen said air travel had not returned to pre-pandemic levels even before the latest lockdown was announced on August 17.
Air New Zealand had taken some of its long-haul planes out of service and long-distance travel was unlikely to resume to the same level.
Olsen said many travel and tourism operators hope 2022 will deliver more international travelers, but that date should be pushed back further now.
“Since we can’t even travel to Australia at the moment, we have to be realistic it won’t happen again quickly.”
Domestic tourism was strong, more people took the time to visit the country and this is where efforts should be concentrated.
Closing borders to international travel also meant a drop in immigration from around 5,000 people per month to 370, which would continue to put pressure on the job market for years to come.
“We’re going to have to think about how we supply the job market because at the moment it’s stretched to the edge with no real way to release the pressure.
“We don’t have to migrate to bring in skilled workers and it’s difficult to match supply and demand.
There was higher pressure on wage inflation, employers had to pay more to keep existing staff as well as to hire new people. There was also quite a bit of “job poaching” going on right now.
“The vacancies are incredibly plentiful, but the number of people applying has decreased… which shows that it is difficult to match the demand with the skills of the people. “
There had been an increase in spending across the country the night the lockdown was announced, but this was followed by an expected drop in spending.
“Spending in supermarkets has doubled [on the night of the announcement] as the great toilet paper wars of 2020 have come back to haunt us.
“But shoppers were spending more on fresh produce, fruits and vegetables, hopefully because they already stocked up on toilet paper.”
Olsen said Waipā was in a good position to overcome the latest foreclosure, with strengths in primary, construction and retail, to name a few.
Housing affordability has continued to emerge as a major issue, with around 100 applications for state housing assistance to date.
He expects the national economy to rebound strongly when the country emerges from alert levels. Kiwis who had saved their money during the lockdown would be looking to spend and invest.
“Last year New Zealand went into lockdown in April and within three months our consumer spending was back above pre-pandemic levels.
“People were buying local with money they saved during the lockdown and we think we’ll probably see it again.”