A tourist takes part in an island night event in Rarotonga. Cook Islands Tourism/21030544.
As government works towards two-way quarantine-free travel with New Zealand by the end of the month, local businesses are getting desperate and many say they can’t survive much longer without tourists. Yet even with a bubble, they face unprecedented challenges in an uncertain environment.
Twelve long months into the Covid-19 pandemic
and the virus continues to rage around the world.
A vaccine is showing signs of promise, and
there is chatter about the United States – one of the worst-hit countries –
possibly achieving herd immunity by mid-2021.
In the Cooks Islands, the virus has yet to
make an appearance but economies are ruined and many people’s livelihoods have
been destroyed.
It’s an elusive goal and delays have
frustrated many, but the country continues to work towards establishing
two-way, quarantine-free travel with New Zealand. And businesses say the timing
is crucial: cash levels are reaching critical levels and survival is hinging on
a bubble being formed soon.
Despite delays in setting up mass testing and
contact tracing capabilities, Prime Minister Mark Brown’s government is
sticking to its target of a bubble by the end of March.
That would be a major milestone, and all
around Rarotonga, businesses are going through the fine details of what needs
to be done to prepare for the first arrivals.
But even with a bubble, many aren’t expecting
smooth sailing. Running a resort or a restaurant will be anything but business
as usual.
February was a very hard month, says Eve
Hayden. “We had gotten rid of 2020, past Christmas and into January, and
suddenly we were into February and we’re still not open.”
As the chief executive officer of the Cook
Islands Chamber of Commerce, she’s been hearing first-hand how businesses have
been gutted by the shutdown in tourism.
Most accommodation businesses have had
little-to-no revenue coming in, but they’re still incurring thousands of
dollars in maintenance expenses every month. Hayden says a small businesses
could be shelling out $8000 a month to maintain their properties. For larger
establishments, that figure could be as high as $80,000.
“If you don’t deal with that stuff, then you
don’t have anything to sell at the end of it. You have to maintain,” she says.
“That’s a lot of cash to burn through.”
With reserves depleting rapidly, businesses
need a fresh injection of cash. Sun-seeking tourists will happily bring some of
that, but for businesses, operating during the time of Covid-19 even with a
safe bubble in place will pose considerable challenges.
For starters, hotels and restaurants will need
to stock up on supplies and food items. Hayden says they’ll need advance warning
for any resumption in seamless travel from NZ before placing their orders, but
even with that, ongoing logistical issues will make ordering supplies
difficult.
“We have a freight issue with the small
aircraft coming in,” she says. “Local businesses are already struggling to get
product that they can try to make out some margin and sell to the local
community.”
“Big suppliers like CITC and Paradise
Supplies, they don’t want to commit to stock until they know they can sell it.”
Staffing issues, exacerbated by the recent
exodus of residents to New Zealand, is also concerning for businesses.
“It is to be expected, to be fair,” says
Hayden, regarding the recent outflow of residents seeking opportunities in NZ.
“You can’t be in limbo for a long time.
Business owners are in limbo but we don’t have any choice. We have investments,
we need to protect them, we need to look after them. The workers though,
they’re not as committed as we are, so I’m not surprised people are leaving to
look for better income. Our only hope is that they come back.”
The stakes are high, and customers will be
unforgiving, she says. “What we don’t want to happen is have Cook Islands
tourism operators providing an inferior product. We don’t want our standards to
fall.”
There are many obstacles, but Hayden thinks
the country has an opportunity to capitalise on a situation where foreign
destinations such as Fiji and the Gold Coast are closed off to Kiwi travellers
desperate for some tropical sunshine.
“We have this window where the Cook Islands
could be the only game in town to leave the country,” she says. “We need to be
ready for that and take advantage, because once those other markets open up,
there’s going to be price cutting.”
Renowned chef and owner of OTB Bar and
Restaurant, Phillip Nordt says his operation has been able to stay afloat
during the downturn by focusing on the local market. “For us, it’s business as
usual, but for many others it’s different,” he says.
The truth is, he had no choice.
As a fine dining establishment, mothballing
his restaurant and waiting to re-open when tourists arrive wasn’t an option.
Finding staff, rebuilding menus, and building up his kitchen to peak levels
would be too difficult of a task.
It’s an issue that has claimed many
restaurants in major markets around the world, he says.
“The kind of stuff we are doing, you can’t
stop. If you do, you can’t restart. That’s why so many 5-star restaurants have
had to close. We have 180 prep items. It’s difficult and you can’t easily
relearn those skills,” he says.
To keep going, he developed a cooking show on
local television and focused on local diners. And he reckons that market can
sustain OTB even when borders open. But to take on extra business when a bubble
opens, Nordt said he’ll need staff.
Right now, he says it’s a major concern for
many.
He applauds Government’s pandemic response,
especially the wage subsidy kept many businesses ticking. But he says more
needs to be done to assist them with bringing in new staff to the country and
pushing forward work permit applications.
“Mark Brown is a good finance man and he
understands how it works,” he says. “But staffing, it’s the most pressing
issue,” he says.
“I’d like to meet with industry leaders and
discuss this issue at a higher level. We need answers. What is the Government
ultimately doing about this issue with immigration and not being able to get
people here, and that people are leaving or being encouraged to leave?”
“This is what puzzles me,” he says.
As one of the country’s biggest resorts,
considerable effort is needed to keep The Rarotongan ready for visitors.
One hundred and fifty workers have been kept
on staff at the resort by owner Tata Crocombe, who also holds The Rarotongan,
Sanctuary Rarotonga and Aitutaki Lagoon Private Resort in his portfolio of
properties.
He says his foot is on the gas and they’ll be
ready to start welcoming visitors once the borders open up, with an ability to
open to 100 per cent occupancy within 48 hours.
But like OTB’s Nordt, he’s also dealing with a
depleted workforce.
Once things turn around, Crocombe says he will
be looking to add another 50 staff members to his roster. “There’s a labour
shortage in this country right now,” he says.
But even if all the various aspects of his
operations are sorted out, Crocombe says the vexing question facing businesses
is this: if a bubble opens with New Zealand by the end of March, under what
type of environment will businesses be operating, knowing a community outbreak
could appear at any moment?
“Is it going to be, open, shut, open, shut? It
looks like that is the way it’s going,” he says.
It’s a concern shared by many businesses says
Hayden from the Chamber of Commerce. She says clear messaging will be needed
from the government as to when lockdowns are required, as well as after they’ve
been put in place.
“One thing we would like to see is a clear
pathway of making decisions, so that we’re not doing knee-jerk reactions,” she
says. “Otherwise we will have difficulty with deposits being paid, final
payments, people needing to travel, and logistical issues around that.”
It’s the unpredictability of operating during
a pandemic that is causing a lot of anxiety for businesses, and it’s something
that they won’t be able to avoid, Crocombe says.
“Look,” he says, before taking a deep breath.
“The whole thing is introducing a level of uncertainty into an already
uncertain business. It’s going to be unprecedented. We’re just going to have to
learn how to deal with it.”
Liana Scott was in New Zealand when the
country entered a level 3 lockdown after the discovery of community
transmission there. She says witnessing how the country responded provided her
with insight on what to expect here should the Cook Islands go through a
similar scenario.
“There were weddings and events that were
planned that had to be cancelled, the hotel where I was staying was receiving
non-stop phone calls about cancelling reservations,” says the general manager
of Muri Beach Club Hotel and president of the country’s Tourism Industry
Council.
“I was thinking about all the food that was
prepared and now wasted, which got me thinking about the same scenario in the
islands.”
She says a swift vaccine rollout is the only
real way forward to establishing a sense of normalcy in the local tourism
sector, but with no timelines in place for that, the industry must move forward
continue to push for a bubble at the earliest.
“Covid-19 could be around for some time. Time
is what our economy cannot afford,” she says.
