Three Key Trends Defining Travel Sector’s Recovery From COVID-19 Storm

Saturday, 5 September 2020, 2:49 pm
Press Release: Kalkine

Summary

• The tourism industry remained at the core of the NZ economy in the pre-COVID-19 era.
• COVID-19 driven travel curbs stimulated a sharp fall in Kiwi Land’s border crossings in June 2020 quarter.
• The extension of the Tourism Loan Scheme by the government has come as a great sigh of relief for ITOs seeking income support for the past few months.
• Kiwi Landers are likely to access some of the most sensational sceneries of the world shortly, with the potential resumption of train services.
• Prospective travel bubbles with the Cook Islands and Australia can provide a firm nudge to NZ travel industry in restoring normalcy.
• The impact of the second wave of infections in Auckland and Victoria on the travel bubbles’ progress remains under the scanner.

No doubt, COVID-19-induced restrictions initially smashed the thriving NZ travel industry amid stringent lockdown restrictions and overseas travel bans. However, some optimistic trends that appear to hit the ground running deserve closer attention to evaluate the growth trajectory of the travel sector in the near term.

The tourism industry remained at the core of the NZ economy before the COVID-19 outbreak, contributing NZD 16.2 billion to the nation’s GDP during the year ended March 2019. However, the pandemic emerged as the destroyer, squashing both inbound and outbound travel demand drastically.

As per Stats NZ’s latest figures, the coronavirus-driven travel restrictions stimulated a sharp fall in Kiwi Land’s border crossings in June 2020 quarter. The aggregate number of border crossings plummeted acutely to 78,400 in June 2020 quarter, as compared to 3.14 million in June 2019 quarter.

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Indeed, the travel sector is not out of the woods yet! However, certain trends are instilling hopes of industry’s gradual revival from the Global Virus Crisis (GVC). With that said, let us quickly discuss these promising trends that can salvage the hammered travel sector from large-scale downturn:

1. Government’s Tourism Loan Scheme: A Guardian Angel

To ensure the endurance of the tourism industry from border closures, the NZ government has recently approved NZD 20 million in loans for 26 Inbound Tour Operators (ITOs) reeling from the virus crisis. The 26 ITOs chosen under the government’s loan scheme have been considered to be of strategic importance and present exposure to key international markets.

The loans have been approved as a part of the government’s NZD 400 million tourism rescue package, announced in Budget 2020. With an extended repayment period and favorable terms, the loans are expected to help these ITOs prepare for border re-opening.

Initially slated to cover just 10 ITOs, the extension of the loan scheme has come as a great sigh of relief for ITOs seeking income support for the past few months. While ITOs constitute a workforce of just 5 to 50 staff members, their survival is likely to make a valuable contribution to the sector’s revival, with these operators being a key source of support for overseas tourism.

2. Potential Resumption of Scenic Train Journeys: A Much-Needed Refreshment

Kiwi Landers are likely to access some of the most sensational sceneries of the world shortly, with the potential resumption of the Coastal Pacific and Northern Explorer services. The state-owned enterprise, KiwiRail has recently updated that these train services are likely to return this spring, provided the nation restores to Alert Level 1 restrictions.

In addition to these two train services, the TranzAlpine is also expected to resume operations when the nation falls to Level 1 curbs. The recommencement of these services is anticipated to provide travel enthusiasts with exposure to incredible sceneries, which often remain untouched in their active planning to save for international trips.

While these train journeys can whet your travel appetite considerably, some extra care and planning should be undertaken to lessen the risk of contracting the COVID-19 infection. Maintaining physical distancing, keeping a tab on local regulations and rules and carrying hand sanitisers are some of the safer ways to cherish the beauty of scenic spots.

3. Potential Travel Bubbles: A Flicker of Hope

Though renewed virus outbreak in Auckland has put plans for Cook Islands travel bubble on hold, NZ has not given up on the travel corridor prospects. Kiwi Land expects to open a travel bubble with the Cook Islands before the end of 2020, enabling New Zealanders to experience quarantine-free travel to the popular tourist destination.

Moreover, Australian Prime Minister Mr Scott Morrison is also keen on renewing the travel bubble discussion with NZ. The trans-Tasman travel bubble was put on the backburner in August this year post the emergence of fresh COVID-19 cases in Victoria. While NZ is undertaking the foundational work for travel arrangements with Australia, the travel bubble is less likely to be implemented in the near term.

Undeniably, potential travel bubbles with the Cook Islands and Australia can provide a firm nudge to NZ travel industry in restoring normalcy and reviving from the crisis. At the same time much depends on control of the second wave of infections in Auckland and Victoria that may set back the pace of travel bubbles’ progress.

All in all, these promising signs of recovery can turn the tables around for NZ travel industry, potentially enabling it to return to its pre-pandemic shape.

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