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Lockdown 2.0 shatters tourism’s hopes of seeing international visitors return in 2022.

The first 10 days of the lockdown represent a loss of 500 500 million to the national economy, said Brad Olson, principal economist at Informatics.

Bejon Housewell / Equipment.

The first 10 days of the lockdown represent a loss of 500 500 million to the national economy, said Brad Olson, principal economist at Informatics.

Tourism businesses awaiting the resumption of international travel will have to change their game plan with “Game Lockdown 2.0”.

Brad Olson, principal economist at InfoMetrics, said many tourism operators see the domestic market as a “bulp” until international travel and tourists return.

“We think this is a wrong plan and we think tourism needs to focus on domestic travel as a core part of their business.

“In New Zealand we need to look at product offerings from this domestic sector.”

Brad Olson presented an audio-visual to the YP District Council with a snapshot of the effects of the August 2021 lockdown.

Supplied.

Brad Olson presented an audio-visual to the YP District Council with a snapshot of the effects of the August 2021 lockdown.

Olson announced the effects of the 2021 lockdown to the district council via audio-visual on Tuesday.

In the first 10 days of the lockdown, he said, the national economy recorded a loss of more than 500 500 million, representing a 49 percent decline.

“It’s worth considering, but not as deep a hit as we saw in Lockdown 1, we saw a reduction of about 60-62% in costs.

“But in Lockdown 2.0, businesses have found a way to work at Level 4 and Level 3 with delivery without much contact.”

Olson said air travel had not returned to pre-epidemic levels before the latest lockdown was announced on August 17.

Air New Zealand had canceled some of its long-haul flights and it was unlikely that long-haul flights would resume at the same level.

Olson said many travel and tourism operators had hoped that 2022 would reach more international travelers, but that date would have to be extended.

“Given that we can’t even travel to Australia at the moment, we have to be realistic. It’s not going to happen again.”

A graph announcing the lockdown showed an increase in spending that night, then an expected decrease.

Supplied.

A graph announcing the lockdown showed an increase in spending that night, then an expected decrease.

Domestic tourism was strong, more people were taking the time to look around the country, and that’s where the focus should be.

Closing the borders for international travel also means that migration will be reduced from about 5,000 people to 370 per month and this will put pressure on the job market for years to come.

“We have to consider how we resource the labor market because at the moment it is stretched to the edge where there is no real way to release the pressure.

“We don’t have migration to bring in skilled workers and it’s hard to match supply and demand.”

This could be a long wait before international tourism returns to New Zealand after the latest Level 4 lockdown.

Ricky Wilson / Stuff.

This could be a long wait before international tourism returns to New Zealand after the latest Level 4 lockdown.

There was more pressure on wage inflation, employers had to pay more to hire existing staff as well as hire new people. There were also plenty of “job hunters” at the time.

“Job advertisements are incredibly high, but the number of applicants has dropped.

Expenses had risen across the country on the night of the lockdown announcement, but have fallen sharply since then.

“Spending in supermarkets has doubled. [on the night of the announcement] As the great toilet paper wars of 2020 come back to haunt us.

Migration levels fell, creating a vacuum in New Zealand's job market.

Supplied.

Migration levels had fallen, creating a vacuum in New Zealand’s job market.

“But buyers were spending more on produce, fresh fruits and vegetables, hopefully they have already stockpiled all the toilet paper.”

Olson said YP is in a good position to cope with the latest lockdown, which has power in the primary sector, construction and retail.

Housing affordability continues to be a major issue, although there are currently around 100 applications for state housing assistance.

He hoped that when the country went beyond the warning level, the national economy would return to strength. Kiwis who saved their money during the lockdown will consider spending and investing.

“New Zealand went into lockdown in April last year and within three months our consumer spending was above pre-epidemic levels.

“People were buying locally with the money they saved during the lockdown, and we’re sure we’ll see it again.”

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