Hostels face first summer without backpackers, closures likely

Urbanz Accommodation Christchurch co-owner Paul Crooks has grave fears for the backpacker...
Urbanz Accommodation Christchurch co-owner Paul Crooks has grave fears for the backpacker industry unless it receives more government support. Photo: Geoff Sloan
Backpackers often lead a hand-to-mouth existence, and now hostels that accommodate them are facing a similar predicament in Christchurch with closures likely.

Hostels usually welcome an influx of overseas backpackers this month, but the Covid-19 pandemic has heaped more pressure on a tourism sector still recovering from the Christchurch earthquakes.

Urbanz Accommodation Christchurch manager and part-owner Paul Crooks shared a grim outlook as the city’s first summer without significant numbers of backpackers beckons.

“There’s usually 50,000 (backpackers) in New Zealand over the summer months. November is the peak month for arrivals on working holiday visas and, of course, there’s zero coming now,” he said.

“Closing is definitely getting higher up the list of options. We only survived winter because of the wage subsidy.

“The backpacker industry can’t survive when we’ve lost 80 per cent of our customer base.”

Crooks and an Australia-based co-owner purchased the former YHA premises on Manchester St five years ago. It can house 170 people and usually has a staff of 14 over summer.

“We had a couple of backpackers leave when their visas expired so we haven’t had to lay off any staff yet, but everyone’s on reduced hours,” he said.

Urbanz Accommodation Christchurch co-owner Paul Crooks. Photo: Geoff Sloan
Urbanz Accommodation Christchurch co-owner Paul Crooks. Photo: Geoff Sloan
Crooks lamented the end of the government’s wage subsidy and appealed for it to be reinstated.

“Australia, Canada and the UK have extended their wage subsidy, the New Zealand government have thrown us to the dogs really,” he said.

“It’s grossly unfair because the worst-affected industries have lost all support. They gave out the wage subsidy to everybody in the early days and most of those industries have simply bounced back and made huge profits.

“Retailers had a very temporary downturn in their sales, our downturn has carried on continuously and it’s getting worse because the borders remain closed. Hostelworld (backpacker website) said their bookings in Christchurch are down 90 per cent this month.”

Crooks was aware the Dorset House Backpackers has temporarily closed and said others are only taking weekly bookings to stay afloat. Slashing rates was also a necessity.

Pip Bradford has run the Around The World Backpackers on Barbadoes St for three years but worries if the venture will last another six months.

“We can’t pay our full lease every month, we’ve been on a reduced lease since Covid hit,” she said.

“Times have been so, so tough. The intention is for us to pay it back but I don’t know when that’ll be. We’re barely making ends meet.”

The hostel takes a maximum of 38 travellers and was currently “half full if that”, said Bradford, who is aware some owners are trying to escape the industry.

“I know there’s been a few places that have been trying to sell, I don’t think they’ve had much luck,” she said.

The meeting space at the Around the World Backpackers on Barbadoes St was deserted yesterday,...
The meeting space at the Around the World Backpackers on Barbadoes St was deserted yesterday, illustrating the lack of budget travellers in Christchurch. Photo: Geoff Sloan
Crooks also bristled at suggestions from Tourism Minister Stuart Nash that operators reset during Covid-19 and target high-spending visitors rather than backpackers.

“I firmly believe that the low-spending but high-cost tourist is not the future of our tourism industry,” Nash said.

In response Crooks said: “He’s completely wrong. Backpackers actually spend the most money in the country because they stay for weeks and months. They are the high-value tourists.

“They’re the ones that spread out around the whole country, they are the ones who support all the local communities.”

Jenni Powell, chair of the Backpacker Youth Adventure and Tourism Association agreed, adding: "International youth represent almost a quarter of all holiday arrivals and generate $1.5 billion in foreign exchange earnings, which is higher than any other age demographic."

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