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Airfares slashed as Kiwis urged to support ailing local industry

The government is calling for calm as it considers a financial bailout for businesses facing millions of dollars in lost revenue due to global spread of coronavirus.

“Well we need to keep level heads. The last thing that the industry needs from anybody is for poorly informed decisions to be made,” tourism minister Kelvin Davis said this week, as Aotearoa recorded its first case of the disease.

The Australian prime minister has promised a financial stimulus package within weeks to help struggling businesses across the Tasman, and Davis said the government had not ruled out such a move, but a decision would be made “when we can really make sense of what all the data and information is telling us.”

Air New Zealand put $9 domestic airfares on sale on Monday morning across 32 domestic routes, and within an hour all 1000 were snapped up by Kiwis looking to take advantage of cheap trips.

The national carrier has little choice but to slash both domestic and international fares in an effort to stimulate travel in the face of the coronavirus threat, a move Flight Centre chief executive Graham Turner predicts will happen across the industry.

“It’s inevitable – flying empty seats is something they can’t afford to do,” he said.

Qantas, Jetstar and Virgin have all been forced to cut Asian and antipodean routes, with Qantas so far grounding 18 planes and standing down 700 staff as it faces a $150 million loss of business. Air New Zealand’s hit is likely to total close to $100 million, according to economist Benje Patterson.

Tourism Industry Aotearoa has welcomed Air New Zealand’s cheap flight offers and is pushing the ‘holiday at home’ message as the coronavirus pandemic continues to shrink international visitation.

“We’ve still got New Zealanders who are the bulk of our tourism industry,” chief executive Chris Roberts told Newstalk ZB this week.

“Go to some of those places that are a bit quieter than you might have thought, because there aren’t as many overseas visitors here.”

He said of the cheap airfares on offer: “That’s going to encourage people to travel locally, which is great, so there’s definitely an opportunity for New Zealanders to get out and support those tourism businesses by having another domestic break.”

The push to stimulate domestic tourism comes as new data from Stats NZ shows Kiwis are spending far more on accommodation overseas than they did three years ago.

Spending on accommodation increased by more than 40 percent when comparing the year to June 2016 and the year to June 2019, says Stats NZ, with most of those dollars going to fund overseas stays pre-paid in New Zealand.

“The increase in spending on a place to stay overseas coincides with a big rise in the number of New Zealand residents travelling overseas,” said spokesperson Emily Shrosbree.

In 2016, New Zealanders took about 2.5 million trips during the year ended 30 June, rising to more than 3 million for the corresponding 2019 period.

Industry bodies hope the push for New Zealanders to holiday here rather than jet off overseas will help counter a continued softening of the Asian market.

While arrivals from Australia and the US remain steady, the lack of visitors from China, and slowing of arrivals from Japan, South Korea and other Asian nations, is causing many operators severe financial stress.

Chris Roberts says while big businesses may be losing tens of millions of dollars during the crisis, it’s the small China-reliant business which are particularly vulnerable.

“We’re hearing a lot of these small owner/operator businesses are basically just closing up their business and finding other means to survive as they wait this out,” he told Newstalk ZB.

Other industries are keen to stress the business as usual mantra, with cruises around New Zealand, Australia and the Pacific relatively unaffected by coronavirus, according to the TIA chief.

“One or two of the Pacific Islands might be preventing people from coming in, but there is no reason not to get on a cruise ship around New Zealand, because there is no danger involved in doing that, despite what people are seeing through the news and in other parts of the world,” said Roberts.

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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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