Queenstown will take years to recover - economists

The Government has been advised allowing bed taxes by the Productivity Commission. Photo: Getty...
Queenstown will take years to recover from the Covid-19 hit. Getty Images/File
A quarter of Queenstown’s jobs will disappear over the next 10 months and the tourism-driven economy will take years to recover, financial forecaster Infometrics says.

Infometrics senior economist Nick Brunsdon has advised the Queenstown Lakes District Council nearly 8000, about 25%, of the district’s jobs will be lost by March next year and the district’s job losses will result in lost earnings of $270 million if nothing is done to soften the blow of "the greatest economic shock in living memory’’.

"Although the full extent of the shock is still to play out, it is clear is that the economy will be irrevocably changed by this pandemic,’’ he writes.

"Employment in Queenstown-Lakes is expected to decline from over 31,200 in the year to March 2020 to approximately 23,300 in the same period to March 2021, a decline of 25.2% or over 7,900 jobs. This compares to a nationwide decline in employment of 9.8%.’’

Source: Infometrics
Source: Infometrics
The fall in employment of 25.2% places Queenstown-Lakes as the second hardest hit district in the country, behind Mackenzie District, and just ahead of Kaikoura and Westland as each of the four districts rely heavily on international tourism.

Queenstown-Lakes would the fifth-hardest hit area in New Zealand strictly in terms of the total number of jobs lost, behind Auckland, Christchurch, Wellington and Hamilton, but those four areas have larger workforces than Queenstown where the impact will be keener.

Queenstown Mayor Jim Boult today said the report "paints a bleak picture’’, but said the district was already making "big steps . . . to improve our future’’.

"Predicting how and when domestic and international tourists come back to the Queenstown Lakes is a tough game, but we are more hopeful than the research on this front. The projections show that the timing of a trans-Tasman bubble, or the extent to which Kiwis travel down here, could make the difference of nearly 1,000 jobs," Mr Boult said.

"And this could be even sooner than we hoped with recent news the trans-Tasman bubble may be here earlier than expected.’’

The Infometrics report notes international tourists account for 63% of all tourist spending in the area and the forecasters expect international tourist arrivals to fall to zero over the coming 12 months, as New Zealand’s borders remain closed due to the global pandemic.

"While international tourist may start coming back in 2021, the recovery will be gradual, and even by 2025 we expect arrivals will be well below pre-Covid levels,’’ Mr Brunsdon says.

The report also outlines that without intervention, low-skilled workers were likely to be the most affected by job losses especially in the accommodation and food service industries, as well as food trade workers, cleaners and laundry workers.

As part of the response to these issues, community hubs had been established in the Upper Clutha and Wakatipu Basin (Frankton), today’s statement says, for the community to access welfare support and find information about gaining new employment or diversifying their skill set.

"Queenstown Lakes is still a unique, beautiful place and international tourism will slowly return. So this makes now an ideal time to look at infrastructure for that return, as well as benefiting our local residents,’’ Mr Boult said.

"QLDC is waiting on a final decision regarding the funding applications to the Crown Infrastructure Partners for our shovel-ready projects which, if successful will support in excess of 1,600 jobs over the next few years and boost the economy.

“Our district has a proud entrepreneurial spirit and we are doing all we can to shorten the curve and support our businesses and communities through this stressful period. In partnership with other organisations and supported by $1.4m in funding from MBIE, we are working on creating redeployment options for some of our local workers that have lost their jobs."
hamish.maclean@odt.co.nz 

Comments

The question is: do we want Queenstown to recover to what it was - a classed society of low-paid workers and the fly-in/fly-out wealthy?

This is natures way of giving Queenstown and mass Tourism a breather. Aside from the economic downturn most of the side effects will be more on the positive side for the out of control development mecca. There is a chance of it returning to some form of normality.

Infometrics have been vastly wrong in the past and will be wrong again. Sadly things will bounce back faster than most people expect.

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