$1b boost: Business and travel groups welcome trans-Tasman bubble

Author
Grant Bradley, NZ Herald,
Publish Date
Tue, 6 Apr 2021, 5:20PM
Most skiers from overseas come from Australia. Photo / Supplied
Most skiers from overseas come from Australia. Photo / Supplied

$1b boost: Business and travel groups welcome trans-Tasman bubble

Author
Grant Bradley, NZ Herald,
Publish Date
Tue, 6 Apr 2021, 5:20PM

New Zealand stands to benefit by up to $1 billion a year now that Australian tourists can come here quarantine-free from April 19.

Business groups, pilots and travel agents have welcomed the announcement by Prime Minister Jacinda Ardern.

While travellers from New Zealand have been able to enter much of Australia quarantine-free for the past six months, the announcement of a start date for a two-way bubble is a shot in the arm for struggling tourism and travel businesses on both sides of the Tasman.

The Australia New Zealand Leadership Forum (ANZLF) welcomed the start up from 11.59pm on Sunday, April 18.

Forum co-chair Ann Sherry said it was wonderful news for the 600,000 New Zealanders living in Australia who will now be able to travel home to see families and friends and share important occasions.

"It is also great for all the Australians who are keen to have a holiday in New Zealand, and New Zealanders wanting to holiday in Australia without going through quarantine on their return."

It is estimated Australians will spend around $1b a year when they visit this country.

Sherry said there would be significant pent-up demand.

Co-chair Greg Lowe said with around $27b in two-way trade flowing between New Zealand and Australia (pre-Covid-19 this meant there were about 400,000 business trips a year across the Tasman).

News of trans-Tasman travel opening is a positive step that will allow friends and family to reunite and supports New Zealand's international tourism recovery.

"We expect that the first people to take up travel will be those wanting to reconnect with friends and family and our modelling shows that while visitor numbers aren't anticipated to return to previous levels overnight we can expect to be back at 80 per cent by January 2022," says Tourism New Zealand interim chief executive René de Monchy.

Tourism New Zealand estimates quarantine-free travel between Australia and New Zealand resuming soon could bring in $1b to the economy by the end of the year.

"Tourism New Zealand has been working hard to keep Aotearoa top of mind for Australian visitors over the last year. We will need to work even harder to convert this into bookings."

Despite solid domestic tourism, there is an estimated $12.9b expected gap from the loss of international visitors. The return of Australian visitors will go some way to helping reduce this gap. Australians spent $2.7b in New Zealand in 2019.

Airlines say they have been ready for months for quarantine-free flights, known as green-zone flights, going both ways between Australia and New Zealand.

Now they have been given the go-ahead Justin Tighe-Umbers, executive director of the Board of Airline Representatives of New Zealand (Barnz), says the last pieces of the complex system that enables air travel can be slotted into place.

"This includes things like locking in staff rosters and go-live dates on commercial contracts with suppliers," he said.

He expects there will be three or four airlines that will offer flights in the next few months. But whether the fares will return to pre-Covid fares like $399 one way, it is too early to tell.

"The Tasman has always been one of the most fiercely competitive routes in the world," Tighe-Umbers said.

"While competition will no doubt remain strong as airlines seek to retain traveller loyalty, the facts include aviation has been decimated by Covid-19 and airlines have little opportunity to spread costs across routes.

"Health and safety requirements for Covid have also placed more costs on airlines."

Tighe-Umbers expects the number of green-zone flights to be somewhere between 30 per cent to 50 per cent of pre-Covid levels.

Passengers should expect to remain separated from travellers from flights other than the green-zone flights and they must wear face masks. Masks are compulsory for passengers 12 years and older and are recommended for children from age six.

The NZ Air Line Pilots Association is ''grateful and hopeful'' following news of the bubble but there was still a long way to go until the airline industry recovers

"Along with the continued roll-out of the Covid-19 vaccine and the announcement of a further $170 million government funding boost for the International Airfreight Capacity (IAFC) scheme last month, today's announcement is very welcome," said association president Captain Andrew Ridling.

"These developments are good news for the recovery of our aviation industry and are extremely good news for our furloughed colleagues and others who lost their careers due to Covid. Hundreds of New Zealand pilots' careers ended a year ago, along with the careers of hundreds of cabin crew, while others were left clinging on to their roles, often on drastically reduced hours and wages."

Ridling said that this, coupled with highly restrictive but necessary conditions at the border, had added to a very stressful 12 months for pilots, crew and their families.

The announcement of the is a win for businesses on both sides of the ditch, BusinessNZ Chief Executive Kirk Hope says.

"New Zealand's tourism and hospitality sectors have suffered the full force of Covid-19. Today's news will give them great encouragement that there is light at the end of the tunnel," Hope said.

David Coombes, managing director Flight Centre NZ said it had been over a year since we have been able to send Kiwi's abroad quarantine-free, ''so the launch of a trans-Tasman bubble is very exciting news.''

Demand for a trans-Tasman bubble has been steadily increasing over the past couple of weeks and the firm's staff have already been taking bookings from those eager to visit family and friends in Australia.

Accommodation was priced competitively, there are some great value hotel deals which are not far off pre-Covid pricing.

''Currently, flights are on the more expensive side, but we expect to see these prices lower as certainty around a date leads to capacity increases and the market becoming more competitive,'' said Coombes.

Pre-Covid, Australians spent $2.7b a year and were valued in the regions because 70 per cent embarked on self-drive holidays and were likely to return three to four times in their lifetime.

The Insurance Council warned today that government-imposed border closures are not covered by any insurer.

''Border closures imposed by a government are not covered by any insurer as it is simply not possible to develop a product that accounts for the uncertainty and the level of risk this presents, said chief executive Tim Grafton.

"Insurers and customers need certainty of the exact dates and times borders open or close so that they know when cover is available and when it is not."

At present policies won't cover:

  • Cancellations to travel caused by government-imposed lockdowns
  • Costs if the government imposes a blanket quarantine
  • Travel delay caused by Covid-19
  • Border closures due to Covid-19
  • Travel to any other countries where there is still a "do not travel" alert in place.

Insurers had tailored policies to respond to Covid-related claims such as cancellation costs if clients contract Covid-19 and can't travel, costs to return home if a relative gets sick with Covid or costs if clients get sick with Covid and need to quarantine while overseas.

Some also cover reasonable costs if the person clients are supposed to stay with gets Covid-19 and you need to find alternative accommodation.