Prolonged border closure will be ‘extremely painful’

The Queenstown we know today exists because of tourism, Adrian Januszkiewicz says. PHOTO: SUPPLIED

How dependent has adventure tourism in Queenstown been on overseas visitors?

I’m not sure how it works for all operators, but for most of the businesses I have been involved in, over 20 years, it has been north of 90%.

This means any prolonged border closure is going to be extremely painful for the adventure tourism industry.

Companies that have significant cash or funding support may emerge from the crisis alive, but a lot depends on how long the crisis lasts. I’m afraid there are going to be a lot of casualties.

The prospect of a V-shaped recovery [fast drop and fast recovery] is what we are all hoping for, but it’s not the most likely scenario.

Do you think it is possible for your sector to survive on just domestic travel over the next year?

If you ask most operators whether their business can survive on 10% or less of their last year’s revenue, they would say "no".

So adventure operators are going to have to convince New Zealanders to spend more — but even if we did this successfully and domestic numbers doubled, very few operators can survive on just 20% of the previous year’s revenue. Therefore it is a pretty grim prognosis if borders stay closed.

Operators are also going to have to reinvent operational structures and develop leaner cost models, because revenue is likely to to be depressed for some time.

In my view, the best hope for the industry is that the Government finds a way to develop safe border protocols, which will allow a return of some of our key international markets, as soon as possible. A partial reopening of borders will make the difference between survival, or not, for a large portion of the industry.

Has Queenstown been too reliant on tourism?

I’m not quite sure how to respond to that question.

The reality is the Queenstown we know today exists because of tourism. All of the infrastructure and industry that has since developed (wine, building, retail, technology, professional services, etc) has all developed because of tourism. Those who suggest our forefathers had an option to develop an alternative direction are not being realistic about our history.

Whether Queenstown in the future should attempt to diversify and generate other streams of community income is a much better question and should be a topic for future discussion.

Do you foresee huge job losses in the adventure tourism sector and the rest of the tourism industry?

Sadly, the answer to this question is "yes".

Currently, there are many businesses in Queenstown supporting staff only because of the Government wage subsidy.

At this stage, that only lasts until June 30.

If it is extended, hopefully businesses will continue to support their staff, if they can afford to.

A lot depends on the prospects of a timely recovery.

Any thoughts on how central Government could help more?

I think the Government is doing what it can to put a Band-Aid on the short-term pain. I have my own views about the broader policy approach taken by Government in reacting to this crisis, but that’s beyond the scope of this interview.

Will Queenstown’s tourism industry ever, or maybe in five years, get back to what it was?

I’m an optimist, so I will say "yes".

Humans are creatures of habit, and I don’t think the habitual behaviour of humans will change overnight.

Right now, while we are in lockdown, it might feel like things have changed forever, but I doubt it.

With much of the world’s airline capacity grounded, it will be no small job to bring capacity back on stream.

There will be a desperate will to do so if demand is there (the very survival of airlines will depend on it), but it won’t happen quickly.

I think a probable scenario is that our industry will come back, but slowly, over time.

Adrian Januszkiewicz is a former Shotover Jet Group (now Ngai Tahu Tourism) CEO. His company, Adventure Group, owns Canyon Explorers and Snow Rentals in Queenstown. He is also chairman of Canyon Swing and a director of Fox Glacier Gliding and Mt Cook Glacier Guiding.