With winter closing in, there's not enough work in restaurants and bars for the workers hired to fill shortages in summer's tourism hotspots
As tourism leaders gathered at the three-day Trenz trade conference this month, they were buzzing about the chance to rebuild from the grim days of lockdowns and closed borders. It was a chance to show their stuff to more than 330 buyers from 25 markets around the world.
They welcomed the latest immigration announcement that the Government has increased the number of working holiday places for Spain and also extending the time for some working holiday makers currently in New Zealand.
"It is no secret that many tourism operators are facing workforce shortages, so having a larger number of potential workers will certainly help as tourism restarts and as we prepare to host the Fifa Women’s World Cup later this year," said Tourism Industry Association chief executive Rebecca Ingram. "This is a much-needed and positive step towards supporting tourism businesses with short-term workforce shortages that cannot be met locally."
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But what this means is that many of those showing off New Zealand's richest and most beautiful features to tourists will be from overseas themselves.
Tourism directly contributed 5.6 percent of GDP in the year before the pandemic hit; this fell to 3.0 percent through the Covid period (year to March 31 2022) as the industry focused on domestic tourism alone. With international visitors starting to return, Ingram said the sector was in a great position to recover the lost 2.6 percent of GDP.
But has tourism taken the chance to "reset" itself to a sustainable high-value model, as it promised a year ago? New figures from Stats NZ and the Ministry of Business, Innovation and Employment, alongside analysis from the Reserve Bank, suggest not.
Newsroom analysis of the latest MBIE immigration figures show the industries recruiting the most workers from overseas are food services and hospitality, alongside farming and construction.
And by the sector's own admission, key opportunities have been missed. Ingram welcomed $18.2 million Budget funding for the Better Work Action Plan, in which tourism operators are working with unions and government to address demand fluctuations, pay and conditions, and the skills gap.
But she expressed disappointment at $10m in cuts to the Innovation Programme for Tourism Recovery Fund, a new programme that had only just got started. "It is designed to enable the industry to transform, innovate and take big strides towards our ambition of regenerative tourism. Reducing the fund size curtails the potential positive impact of tourism from these innovative new projects."
The Reserve Bank, in last week's monetary policy statement, projected tourism would recover to just 75 percent of pre-Covid levels, this year. That's not because there's less demand (though China is slow to return) but because the capacity of airlines and tourism operators is limited.
Bank chief economist Paul Conway says they're commissioning research on the impacts of this new and different era of migration, with more skilled workers on higher incomes. "We want to understand more about how the current migration surge is going to influence the economy and inflation," he tells Newsroom. "We need to see how it plays out."
Decline in tourism employment through Covid
Indexed to Dec 2019
The analysis of MBIE immigration figures, showing many of those migrants are in tourism and hospitality, is backed by lived experience. "How often do you get served by someone from overseas at a cafe or restaurant?" he asks. "Anecdotal evidence suggests that they'll be getting employed there. The bits of tourism that held up best are the bits that would have been more exposed to domestic tourism."
Conway says the new, more highly skilled migrants may be putting greater demand on infrastructure and driving up prices – by contrast with the fruit-pickers and labourers of the past.
"Seasonal RSE workers tended to remit a lot of their pay back to their home countries, which sort of softened the demand impact of those types of migrants," he says.
"Whereas you can think of more highly skilled migrants as getting established, tending to bring families with them. So they could have a bigger impact on the demand side."
But on the flip side, they may move quickly to productive work that helps the export economy and generates tax revenue. "With labour markets still incredibly tight, these migrants could get integrated more quickly, coming to a job and making a supply side contribution."
As before the excessive reliance on overseas workers is highlighted by the boom-and-bust cycle, and seasonal changes.
Hospitality NZ chief executive Julie White warns that the winter season is starting – and increasingly restaurants and bars don't have so many hours for the overseas workers they took on merrily at the start of summer.
