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The New Zealand branch of Hostelling International has said that they had "no option but to permanently close the doors".
With a significant shift towards budget domestic travellers and family groups, the company were able to double their domestic bed nights during the Covid-19 pandemic. However, the YHA National Board said that this was not enough to offset the loss of international backpackers for almost two years.
After 19 months of severe restructuring and, faced with the prospect of another summer without international tourists, the YHA will not be reopening in 2022.
"YHA staff have been incredible during extraordinary times" said general manager Simon Cartwright, "It is an ending none of us wanted, but we want to make sure we exit in a way which ensures our people are not left out of pocket."
Affected staff and customers have been informed that all remaining hostels will close.
The announcement comes the day before Auckland's travel border is due to lift.
This closure will only affect hostels directly managed by YHA, with 23 partner hostels continuing to operate independently.
Hostels scheduled to close are in Auckland, Rotorua, Wellington, Christchurch, Lake Tekapo, Aoraki Mt Cook, Wanaka, Queenstown Central, Queenstown Lakefront, Franz Josef and Te Anau.
NZ tourism cornerstone 90 years on
Since opening the first New Zealand hostels in 1932 in Canterbury, New Zealand became a key location for the worldwide Hostelling charity.
By 2019, YHA was New Zealand's largest network of backpacker accommodation with over 30 hostels nationwide. The newest of which was the Lake Tekapo YHA.
However, this was greatly strained by the pandemic restructuring for a more modest, domestic market.
"This is a sad time for our staff, our members and our industry. YHA has been a cornerstone of youth travel in New Zealand for 89 years," Cartwright said.
"Unfortunately, the Covid 19 pandemic has just gone on too long for us to be able to ride it out. Today is a sad day for tourism in New Zealand."