New Zealand travel bubble a bust

Well, despite all the fanfare, it seems that the bubble has burst. Or not even really inflated in the first place, to be more accurate. Just because there’s excitement about being able to travel internationally, doesn’t mean that we are actually doing it. Seven weeks later, the number of people who have flown between the two countries is much lower than expected. I’ve heard lots of anecdotal stories of planes that appear almost empty. Behind closed doors, tourism officials and operators admit they’re disappointed with how things have panned out so far.

Why is this the case? There are a few factors at play here, but the biggest is obviously the threat of sudden border closures and even the possibility of quarantine. As the general manager in Australia of Tourism New Zealand told me, “Many leisure travellers will take a ‘wait and see’ approach, and border closures like the recent NSW closure will likely have some influence on booking confidence”. The first wave of travellers in both directions was mainly what the industry calls the VFR market – visiting friends and relatives – who were understandably keen to jump on a plane and see their loved ones for the first time in months. They make up 75 per cent of arrivals to NZ so far, according to Tourism New Zealand. Holidaymakers are understandably a bit more cautious.

That leads into the next factor that I think is affecting the numbers – the success of domestic tourism marketing campaigns in both countries. In Australia, for example, the demand for local holidays is booming, and it’s not just because of the closure of the international border and the volatility of the state ones. Aussies are genuinely enjoying exploring their own backyard and seeing areas they may not have visited otherwise. I suspect that, even though New Zealand is an attractive destination, a lot of people just don’t see it as different enough to warrant a holiday there instead. Perhaps the numbers would be higher if it was Bali or Italy that we had a bubble with.

The disappointing demand has already seen airlines make some changes to their schedule. Air New Zealand’s chief customer and sales officer, Leanne Geraghty, says, “When scheduling our flights in the lead up to the trans-Tasman bubble announcement, we could only make an educated estimation on the demand we would see. Now we are well over a month in, we are able to adjust capacity based on what we have seen over the last six weeks”. Still, Air New Zealand recently launched a new route between Auckland and Hobart, its ninth Australian destination.

Passenger numbers on Qantas and Jetstar across the Tasman are at about 60 per cent of pre-COVID levels and, although the schedule has changed a bit in the past few weeks, I’m told the ratio of the larger A330 planes being used on flights to Auckland hasn’t changed. However, they’re not yet being used on the routes to Queenstown, which all the airlines are celebrating as huge successes. Qantas Group says the number of people booking flights to Queenstown is almost double the pre-COVID levels – and there’s no secret why. Australia may have a lot to be proud of, but it can’t compete with the ski fields of our dear neighbour, and the winter playground of the South Island looks like it’s going to be more popular than ever before. 

This alone is one of the main reasons there’s actually quite a disparity between who is booking holidays. Although many of us seem reluctant to head to New Zealand at the moment, it’s actually much worse the other way. “Since the two-way trans-Tasman bubble opened in April, bookings have generally been stronger out of Australia than New Zealand. We’re seeing that Kiwis need a bit of encouragement,” a Qantas Group spokesperson told me in a statement. According to Tourism New Zealand, Aussies are booking flights to New Zealand at almost twice the rate that Kiwis are booking Australian trips. That’s not great news for the Australian tourism industry, but it’s not surprising when you consider the continual spotfires of COVID we’re seeing here. The challenge for our industry is to find something like the New Zealand snow that makes a holiday almost unmissable. Maybe the beaches will do the trick in summer. 

Scott Morrison was in New Zealand to see Jacinda Ardern this week (I’m not sure if they like each other enough for the trip to be considered the ‘visiting friends and relatives’ market?) and the Prime Ministers talked about expanding the quarantine-free travel bubble to Pacific nations like Fiji, Vanuatu, and Tonga. If that happens, it will give people willing to travel alternative destinations (and possibly safer destinations, at that), which may lead to a further drop in trans-Tasman tourists. But, on the other hand, it may create the critical mass in the region for international travel to seem normal again and reduce the hesitancy of people to dust off their passports. There’s no doubt holidays between Australia and New Zealand will get back to normal… but when?

You can see more on Michael Turtle’s Travel Australia Today website.