OPINION: More headwinds to face before return to ‘normal’

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We all accept we don’t wish to see our health system overrun by throwing open the borders.

However, we do need to improve planning and better manage our financial, mental  health and physical health.

We need to co-exist with Covid, or risk being an outlier to the rest of the world.

Pandemics aren’t new — the most famous being the Bubonic Plague (1346-1353) — but, over the past century, there have been many pandemics of varying degrees of contagiousness and lethality.

Interestingly, research into the psychology of past pandemics has shown the same human responses have repeated.

During the Spanish flu, for example, merchants suffered hardship because of staff absenteeism and shoppers were either too ill or too frightened to venture out to the stores, while panic buying and anti-vaccination sentiment were also features of
past pandemics.

The personal financial impact of a pandemic can be as severe and stressful as the infection itself.

Covid’s tested everyone’s resolve and brought out the best, and worst, in people.

While the stoicism of many has been impressive, there are exhausted frontline care workers, and hardworking families and wage earners who have had to take pay cuts
to remain employed.

Renters are now experiencing rent in creases, while property values have inflated beyond the reach of many disheartened, prospective purchasers.

Business owners have been forced to sell assets or increase debt to fund losses, keep
staff employed and businesses alive.

Landlords who have reduced rents to support tenants, and many others separated from loved ones by closed borders.

Two years in, Covid fatigue is real and starting to show.

The growing inequality gap is a real social concern, leading to a divided society and increased domestic violence.

Last week’s announcement of borders opening is welcomed and provides hope to many.

But new research shows EU travel restrictions had little impact on Omicron spread —  and airlines will not commit to New Zealand should we delay opening to ‘‘hassle-free’’ travel.

The loss of capacity could take years to rebuild, and NZ is dropping off the sell list of offshore travel sellers.

Unfortunately, for tourism-centric areas, the move to the Red traffic light setting and
the self-isolation requirement while away from home will discourage domestic travel.

The requirement for international visitors to self-isolate on arrival is another major negative, which must be relaxed if tourism is to survive.

It was an important contributor to the NZ economy, pre-Covid, totalling 20% of exports, contributing $41 billion annually, or $115 million a day.

Annual international tourism expenditure was $17.5b — $48m/day — and the industry generated a direct annual contribution to GDP of $16.4b, or 5.5%, and a further indirect contribution of $11.3b, another 3.8% of NZ’s total GDP.

Tourists paid $3.8b of GST — including $1.8b collected from international visitors — while the industry itself employed close to 400,000 people, directly or indirectly.

Displacing tourism, as some suggest, will test the law of unintended consequences.

Besides the actual visitor infrastructure and strategic assets, there are hundreds of peripheral support businesses which depend on tourism for their income.

Tourism has lost 72,285 people from the industry; this includes 6738 or 25% of tourism working proprietors/owner-operators.

We’ve been hearing we need to diversify away from the tourism economy — the industry agrees tourism management and delivery can improve.

However, this diversification is not anticipated to occur anytime soon, and we should look to balance tourism, rather than replace it.

NZ suffers from the tyranny of distance and with disrupted, reduced and more expensive shipping and air freight capacity, our exports and imports are becoming increasingly more expensive.

This may see 2022 present more challenges than the past two years combined.

With the community spread of Omicron and required isolation, all businesses will be negatively impacted.

Recently-released data and numbers speak volumes — residential property values have increased by 27% in the past year, rents are up by 8% and inflation has increased to 5.9%, particularly in relation to essentials like food, rent and fuel.

Meantime, remuneration has not kept pace with inflation, and 40% of Kiwis have less than $1000 in savings.

The immediate future remains uncertain — the way Covid has played out has not matched any predictions.

We have many headwinds to contend with before we’re back on track — borders
remaining closed to free-flow travel, uncertainty with financial markets, enigmatic property prices, new financing restrictions, no migration and labour shortages, rising
inflation and interest rates, disrupted supply lines, increased government-imposed compliance and employment costs, and reduced financial support for workers and businesses.

The World Health Organisation’s Europe office this week said the continent is now entering a ‘‘plausible end-game’’ to the pandemic with the number of Covid deaths
starting to plateau.

Hopefully this will be the case world wide, we can move back to ‘normal’ reasonably quickly, and achieve improved congruity.

Mark Quickfall is a long-time Queenstowner and owner of Totally Tourism