Once-successful tourism business now operating at just 1%

Rebecca Moore
Source: 1News

With his tourism business booming year-round, David Gatward-Ferguson felt “bulletproof”. Tens of thousands of visitors from around the globe flocked to his Queenstown-based operation each year.

But a threat few saw coming - Covid-19 - has a grip on the neck of his livelihood, two years after it first arrived in New Zealand.

That invincible feeling has gone, replaced with anger, his business on the brink of collapse.

"Our business at the moment is trading at less than 1 per cent of pre-Covid levels," he says, frustration and hurt in his voice. "Fragile, I think, is the best way to describe ourselves."

Gatward-Ferguson owns Nomad Safaris in Queenstown with his wife. In the tourism business for 27 years, they offer transport and scenic tours, including a once-popular Lord of the Rings tour.

Before the pandemic he was seeing 25,000 or more visitors each year, mostly thanks to Lord of the Rings. The biggest market was the US, followed by the UK and China.

"It felt fairly bulletproof," Gatward-Ferguson says. "The market wasn't a one-trick pony, it was so diverse, it was brilliant.

"We were busy 12 months of the year so it was really easy to run a business like that. There was this nice flow of tourists coming day in, day out. It was an exceptionally powerful industry… it really was a positive vibe."

Tourism Industry Aotearoa communications manager Ann-Marie Johnson says there was "a remarkable period of growth" prior to the pandemic, making "a huge contribution" to the economy.

"Tourism was New Zealand's biggest export sector, ahead of dairy, contributing 20.1 per cent of total exports."

But since the borders shut in early 2020, she says the sector has been "devastated".

Nomad Safaris had been "riding the wave" of the fantasy adventure film's hype up until "everything crashed and burned" in March 2020.

"We were a modest-sized company, we had a good turnover, a variety of activities and about 50 part-time and full-time staff," Gatward-Ferguson says. "It's just been downhill ever since and it's still going downhill I'm afraid to say, with absolutely no life in the tunnel whatsoever."

While they'd prepared for an earthquake, Gatward-Ferguson never expected a pandemic.

"We'd been warned enough times about [previous viruses] and basically each time it seems to have gone away without doing anything.

"You only needed SARS and MERS to combine and then you've got a highly transmissible disease that kills 50 per cent of the humans it touches, and we all ignored that even though it's a real thing.

"So no, we absolutely didn't ready ourselves."

Nomad Safaris now only has part-time workers, all supported by the wage subsidy at times, and they're operating at less than 1 per cent of pre-Covid levels.

"There's a line in the sand where the banks are just gonna say 'no more'."

Gatward-Ferguson says that line is the fourth quarter of 2022 - "if we're very very cautious". That just happens to be when the Government plans to reopen the border to international tourists.

He's not alone. Stats NZ figures show in the year to March 2021, the tourism industry lost a third of its workforce - 72,285 people, equivalent to almost the entire population of Palmerston North.

"The impact on communities from losing tourism businesses and jobs is immense, especially in many smaller towns with a strong reliance on [the] visitor economy," Ann-Marie says. "New Zealand's border closures are costing our visitor economy more than $1 billion a month."

Businesses in Auckland have endured months of more stringent Covid-19 restrictions than the rest of the country.

Auckland Business Chamber chief executive Michael Barnett says two years ago no one would have predicted "such a controlling environment, and controlling in a negative way".

He says small and medium enterprises, including in retail, hospitality, accommodation and travel, were "treated as businesses and we probably should have looked at them more as people".

"Small, medium businesses where you had an owner who had taken an idea and converted it into a business and employed some people, and that was their life and their lifestyle and we took it away from them.

"Or the mum and dad who'd been operating the business that was ultimately going to be their retirement fund - we destroyed it for them."

Auckland Business Chamber chief executive Michael Barnett.

The consequences have been "absolute failure" for some businesses, while for others it has "totally stalled their lives", Barnett says, expecting to see more businesses close in 2022.

"I think our biggest failure is looking at those businesses as business failures and failing to recognise the impact on people."

Pre-pandemic, he says Auckland's business sector was "gung-ho, it was confident".

"Business was good, there was nothing in our way and I think that's what Auckland really is - it's a place of business, it's a place of entertainment, it's a place of hospitality, it's driven by confident people and people who do things."

But that's completely flipped.

"What we've had is we've had an environment where we've had Covid modellers who kept on predicting the absolute worst case so we ended up with the worst restrictions," Barnett says.

"It was almost like a noose tightening around the neck of somebody.

"The more you took away, the angrier that the people of Auckland got."

Gatward-Ferguson can relate, saying the tourism industry is "on its knees" and the idea of domestic tourists filling the gap is "rubbish".

Domestic tourism spending grew 2.6 per cent in the year March 2021 compared to pre- pandemic times. But that did little to offset the 91.5 per cent decline in international visitor spending, down $17.5 billion to just $1.5 billion.

International and domestic tourism spending was also down 37.3 per cent on the previous year to $26.1 billion.

"That is $15.6 billion in just one year that has been lost to the New Zealand economy, including a drop of $1.7 billion in GST returns to the Government from international visitors," Tourism Industry Aotearoa chief executive Chris Roberts says.

"Tourism was the first industry to be affected by the pandemic and will be the last to recover."

Gatward-Ferguson says the Government spent too long "teasing" about opening up.

"Business people who have been working in the industry for years, decades, who've all been following the Government line and we're just starting to lose it, we just literally can't take any more.

"We just can't cope with this, that's how angry we are."

Barnett says the feeling over the past two years has been stress, anxiety and frustration.

"I think the personal impacts on individuals will be bigger than what you would expect and would be longer-lasting than what you would expect."