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Coronavirus losses at half a billion….and counting

Tourism New Zealand has estimated the impact of the coronavirus on Aotearoa’s tourism industry at half a billion dollars, with major hotel chains forced to absorb millions in lost revenue.

The national tourism body’s chief executive, Stephen England-Hall, told Stuff this week: “It’s about a half a billion dollar impact on the tourism sector, assuming that Chinese arrivals fall to zero for two months, and then it takes another four months to get back to where we were before.”

England-Hall says it’s too early to tell whether travellers forced to stay away during the coronavirus travel ban would defer their trips to New Zealand or abandon them completely.

Accom operators, particularly those Queenstown, Rotorua and Auckland, are feeling the pinch of multiple cancellations and a lack of forward bookings from China.

Millennium & Copthorne Hotels New Zealand, one of the nation’s largest accommodation chains with 20 hotels, announced this week it has lost nearly $3 million in revenue so far from Chinese cancellations – and is bracing for further losses.

“A number of our hotels in high tourism areas are receiving cancellations from several Chinese operators as the Chinese and New Zealand governments’ travel bans and other containment measures come into effect,” it told shareholders.

“Cancellations received to date will result in revenue loss of between $2 million and $3 million with more cancellations expected for future months.

“We have been advised that this revenue loss will not be covered by insurance. Management is implementing urgent response plans to mitigate the effect of these cancellations.”

Millennium & Copthorne reported a revenue of almost $230 million for 2019, up almost $11 million on the previous year despite a softening of the tourism market nationally.

But the group has warned operators will need to “work resourcefully” in 2020 in the face of the tourism slowdown and increased competition from large-scale hotel development in Auckland coupled with no major events planned until 2021 to fill those rooms.

England-Hall says TNZ is looking to other international markets to fill the gap, including North America, Canada, Korea, Japan and skiing Aussies.

But he says the organisation is in a tricky space when marketing Aotearoa’s winter charms to Australia.

“Our thoughts are very much with our Australian neighbours and we wish them all the best with their campaign to encourage domestic visitation,” he told AccomNews this week in the wake of a horror summer across the ditch.

England-Hall says the coronavirus will result in intense competition for high value visitors internationally, making the thus far epidemic-free New Zealand a potentially appealing destination.

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Kate Jackson

Kate Jackson is the editor of Accomnews. You can reach her at any time with questions or submissions: editorial@accomnews.co.nz

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