Glimmer of hope for much leaner hotels

The Government has been advised allowing bed taxes by the Productivity Commission. Photo: Getty...
Queenstown hotels are expected to cut their staff by 70%. Photo: Getty Images/File
New Zealand’s move away from Covid-19 Level 3 restrictions is giving Queenstown hoteliers a glimmer of hope.

But as their phones begin to ring again and they restore something close to full operations, they are expecting to cut their staff by 70% overall.

That is the standout figure from a national survey of hoteliers by Horwath HTL and Tourism Industry Aotearoa (TIA) between April 30 and May 5 that also shows two-thirds of them expect to have negative operating cash flow this year.

TIA hotel sector manager Sally Attfield said Queenstown hoteliers were expecting to lay off 69% of their staff overall, compared with an average of 56% for hotels nationwide.

``Hoteliers have no choice but to let their people go, as they are not expecting to continue receiving government wage subsidies for the next two or three years until the demand for hotels has recovered.''

The Rees chief executive Mark Rose said its occupancy last month was ‘‘99.99% down’’ on April last year, and it would be about the same this month.

But this week’s announcement by Prime Minister Jacinda Ardern of the move to Level 2 was a ‘‘great shot in the arm’’ and provided a sliver of light at the end of the tunnel.

Bookings were starting to pick up and he hoped a domestic ski season — possibly extending to Australian visitors by August — followed by school holidays from late September would keep his staff busy.

But anyone who thought domestic tourism would be a panacea for the resort was ‘‘on drugs’’, Mr Rose said.

Through attrition and a hiring freeze since January, his staff numbers had fallen from about 110 to 80, and he was keeping them on with the aid of the wage subsidy.

A restructuring was on the cards, but he was holding off making any decisions until after tomorrow’s Budget.

Millbrook Resort director of operations Brian Howie said it would reopen for hotel guests next Thursday, while its golfing, health spa and other operations were opening tomorrow.

Bookings had been coming in since this week’s announcement and he was pleased by the improving prospects for a ski season.

All his staff would stay on until the wage subsidy scheme ended on June 21, but redundancies ‘‘across all departments’’ had been notified, Mr Howie said.

The Hilton Queenstown, which has remained open during the lockdown, has already notified redundancies for 150 of its 230 staff.

General manager Chris Ehmann said the lockdown had been a difficult time, but staff had ‘‘prepared ourselves for the new start’’.

‘‘I think we’re in a good position for that now, and emotionally we’re on an upswing.

‘‘The phone’s ringing a bit more. It’s still very slow, but the numbers are starting to go up.’’

Novotel Queenstown Lakeside general manager Jim Moore said he hoped interest would ‘‘start to open up’’ with the move to Level 2, and a domestic ski season and September’s school holidays would help.

Although there had been attrition in staff numbers already, a restructuring plan was being worked on.

‘‘We won’t be able to have the same number of staff we had when we were at 80-90% occupancy.’’

Some respite for the resort’s hoteliers may come from a withdrawal of many of the 5000-plus homes, apartments and rooms from Airbnb and other peer-to-peer short-term accommodation platforms they have been competing with for the past few years.

With predictions of tourist numbers in the resort never reclaiming pre-Covid-19 heights, many property owners are switching to long-term lets — at least for the next six months.


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