Staff shortages cost tourism industry millions

Economist estimates that tourism businesses lost $3 million because of staff shortages during June

Staff shortages cost tourism industry millions

Earlier this week, the government proudly announced that it has processed 85,000 migrant applications for residency – great news for health, construction and education industries seeking staff, but over in the tourism and hospitality industry, one economist estimates the current talent shortage has cost New Zealand’s second biggest industry $3,000,000 in the month of June alone.

New Zealand’s borders, including the maritime border are now fully open to tourists and the additional demand is providing a lifeline to businesses starved of revenue over the last couple of years but the tourists coming are being greeted by the closed doors of hospitality and tourism operators who simply can’t find the staff to operate seven days a week.

“Yeah, the people are definitely coming here but they can’t get bookings,” said Hamish Klein, Chief Manager Operations, at Good Group Hospitality. The company’s two restaurants in tourism mecca Queenstown have only been operating five days a week.

Read more: New Zealand’s talent shortage more severe than Australia

The company also operates venues in Australia where Klein says their businesses experienced the same staff shortages, but government acted quicker to address it.

“Australia has always been a little bit ahead of the curve in terms of how they dealt with the pandemic, and this is no different. We’re starting to see some relief there with people turning up to fill jobs but in New Zealand, they have opened it up now, but it’s just a bit late and it’s taking time,” said Klein.

Good Group’s New Zealand operations have ramped up their recruitment strategies, engaging overseas recruitment companies and offering current employees a $500 dollar referral bonus if they’re able to bring someone on board the team.

“We really want to get back to full trade, we are a seven day a week business, we’re recruiting as hard as we can but it’s just challenging in the current environment,” Klein told HRD.

Read more: Talent shortages and fatigue: The biggest challenges facing HR

A report entitled Queenstown-Lakes’ labour market snapshot (Aug 22) prepared by regional economist Benje Patterson, claims that job ads in the resort town are double their level before the pandemic. The biggest lift in job ads continues to be in accommodation and food services but those sectors have fewer people employed than this time last year.

65% of businesses in the area are currently operating at below 75% with most businesses closing on normal trading days so they can maintain high standards of service on busier days and avoid worker burnout.

Patterson said that these risks aren’t just hypothetical, already during the month of June alone, it is estimated that as much as $3 million dollars of international visitor spending went unmet. Over the course of a year, he estimates that if businesses are unable to adequately increase staff capacity unmet visitor demand could be worth $30 million dollars of lost tourism revenue.

“Absolutely, I agree with him,” claimed Klein. “There is significant money being left on the table. There are so many businesses that are closed in Queenstown, all they need is staff.”

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