No holiday from uncertainty

The pings, dings and electronic whistles some of us heard over afternoon tea on Monday were the sound of an economic boost that seemed a long time coming.

They were the sound of email notifications and application alerts sent to countless mobile telephone users keen for good news from the midst of the global pandemic.

Excited users checked their devices and many hurriedly started tapping away at their screens and their keyboards. In doing so, they offered new hope for the future.

The alerts were sent by Air New Zealand and JetStar almost immediately after Cabinet decided to relax proscriptive social distancing rules on domestic flights.

Before then, the airlines could only sell every other seat. It meant often half-empty flights carried passengers who parted with an arm-and-a-leg to buy their tickets.

Monday’s eagerly anticipated announcement prompted Jetstar to resume the flights it stopped when Auckland plunged into Level 3 restrictions about four weeks ago.

Air New Zealand threw open its bookings and slashed the price of more than 180,000 airfares as the domestic airline industry suddenly flew back into business.

It was the news many in the South had been waiting for. Choosing mandatory mask wearing instead of empty seats means our airports will welcome many more visitors.

Those visitors will bring much-needed cash to our communities, especially where tourists are the bread-and-butter of an economy reeling from the effects of the pandemic.

Queenstown Lakes Mayor Jim Boult was clearly pleased Cabinet heeded his calls to relax the social distancing rules that stopped his region tapping crucial markets.

Aucklanders, Wellingtonians and Cantabrians provide the lion’s share of the market now that Australia and the world is grounded in the global Covid-19 response.

They were a sizeable fillip when the country emerged from lockdown but the tap was turned to less than half in the wake of Auckland’s ongoing community outbreak.

Mr Boult last week said tourism businesses in his district were in an economically desperate situation and in dire need of visitors. The new rules provide a new chance.

However, the South’s accommodation providers, bars, restaurants and tourism operators will hardly expect a colossal windfall over the forthcoming school holidays.

The July school holidays fell after lockdown, when there was no community transmission of Covid-19 and when the government subsidy still supplemented many wages.

There was a sudden release of pent-up spending as New Zealanders did as the Government asked and replaced their long-lost trips overseas with holidays at home.

Many southern tourism and hospitality businesses cut staff and services well before the school holidays. They did well from the boost, but not as well as a year before.

Now, after successive weeks of sometimes muted spending during the Alert Level 2 restrictions pundits predict a modest recovery when we move down to Alert Level 1.

Sustained growth will rely upon improving employment prospects and better consumer confidence — which might struggle without an effective Covid-19 vaccine.

The latest Westpac McDermott Miller consumer confidence survey reveals confidence is the lowest it has been since the 2008 Global Financial Crisis.

This translates to caution from households worried the next big-ticket item — such as a week away — might leave them vulnerable if their finances take a hit.

The economists expect spending to stay sluggish through the final months of the year. Spending in the usually buoyant period before Christmas "looks to remain subdued".

This will worry many of the businesses who will soon benefit from having more seats available to more people on domestic flights, for such flights will pay dividends only if the passengers are willing to spend. The school holidays will bring more people and new money south, but there will be no holiday from uncertainty about what the pandemic-affected future holds.

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