Baby Health in Winter Coronavirus: Will New Zealand’s most expensive attractions be forced to cut prices?

With no overseas customers for the foreseeable future, the operators of many of New Zealand’s most expensive attractions are fighting for survival.

While some are attempting to lure Kiwis with lower prices, others say high overheads prevent them from doing so. Or that dropping prices would diminish the perceived value of brands they’ve worked hard to build.

As long as borders remain closed to international visitors, most such businesses are hanging out hope that Kiwis will spend substantially more while holidaying in their own backyard than they did in pre-Covid-19 days.

Tourism Industry Association (TIA) spokesperson Ann-Marie Johnson said the organisation often fielded complaints about the high cost of activities in New Zealand.

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“But a lot of that is due to all the government fees and concessions and various health and safety fees and suchlike that operators have to pay. So by the time they’ve paid all those bureaucratic fees and paid their staff and so forth, there’s not necessarily a lot left at the end of the day that they’re putting in their pocket… You can’t drop your prices if you’re not going to pay your bills.”

Relatively few Kiwis have visited Fox and Franz Josef glaciers due to steep helicopter flights, but the high costs associated with such tours make it hard, if not impossible, to substantially reduce prices.

“You’re paying your airport fees, you’re paying DOC to land on the glacier, you’re paying CAA fees for perfectly valid health and safety reasons,” Johnson said. “So there are a whole lot of fees that get paid out before the operator actually sees any of the individual’s ticket price.”

One of the country’s largest tourism operators, Ngāi Tahu Tourism, laid off more than 300 staff in early May and put most of its businesses, including the pricey Shotover Jet, into hibernation, while some high-end operators have shut up shop completely. But Johnson reckons we ain’t seen nothing yet.

“It’s definitely just the first wave [of closures],” she said. While the additional eight-week wage subsidy for tourism businesses will help, many high-end operators are “desperate” for borders to reopen to international tourists.

“We could be talking months or we could be talking years,” Johnson said. “Domestic tourism will help, but there just aren’t enough New Zealanders to go around.”

In the meantime, many are hoping the new Tourism New Zealand-led domestic tourism campaign will open Kiwis’ eyes to the treasures in their own backyard – and convince them they’re worth forking out for.

“Most New Zealanders probably just walk in to look at Tane Mahuta and admire him,” Johnson said. “But if you take a guided tour, you get a whole lot of extra value in terms of learning about the history of the region, the local flora and fauna that you’re seeing – just a whole extra layer of added value. It’s partly about shifting New Zealanders’ perceptions. We have world-class products that they’d pay the money for overseas.”

Here, we take a look at how some of our high-end attractions are faring with only Kiwis customers. 

The Alpine Group

Even if you’re a bit of a wuss about the cold like I am, being trapped in New Zealand over winter isn’t exactly a hardship when you have some of the best-looking alpine landscapes in the world in your backyard, arguably at their most attractive in winter. 

In many ways, this nearly 50-year-old, family-owned company offers the kind of classic New Zealand experiences every Kiwi should enjoy at least once in their lifetime: Guided walks around a glacial valley so deep within the Southern Alps it is inaccessible by road; helicopter tours to national treasures such as Milford and Dusky sounds in Fiordland (you land on a floating helipad at the latter before commencing your private boat tour); and guided heli-fishing, heli-hunting and heli-ski experiences. Then, if you’re a guest at the helicopter-access-only luxury lodge in the valley, it’s back to base to tuck into the likes of free-range venison or Te Mana lamb as you sip some of Central Otago’s best pinot noir. 

“Often our international guests, most who have travelled the world many times over, call these days the best days in their life ever,” The Alpine Group general manager, tourism, David Hiatt said. “We are excited about getting the same reaction with proud New Zealanders.”

Pre Covid-19, international tourists were by far the largest market for the company, whose brands include Minaret Station (the luxury lodge), Southern Lakes Heliski and Alpine Helicopters. 

Southern Lakes Heliski’s “daily run” packages range from $1090 to $1690, while a luxury package including return helicopter transfers to the lodge from Queenstown or Wanaka, three nights’ accommodation, meals and two days of heli-skiing costs from $7850 per person. 

Alpine Helicopters’ scenic flights range from a 20-minute flight over Queenstown or Wanaka for $295 to a full-day tour of Dusky Sound for $3490. 

Standard rates at the lodge start from $2950 per couple for a night in one of the four chalets, including meals but not the necessary helicopter transfers. 

While, like most high-end operators, The Alpine Group is “awaiting more direction as to when international borders might open”, it has launched some seasonal offers aimed at enticing Kiwis to visit Minaret Station, both to stay and to go hiking, mountain biking or skiing. Discounts on accommodation range from 25 per cent for one chalet to 46 per cent for four chalets, while a heli-hiking experience including a guide and picnic lunch costs from $875.  

“We have been pleasantly encouraged in the past few days since we reopened with the level of enquiry and bookings by Kiwis who can’t travel overseas as planned, but still want to treat themselves to a special break away,” Hiatt said. “We are looking forward to seeing more locals this year staying and potentially heli-skiing from the lodge.”

As the company is mindful of retaining its premium branding and products involve high-cost helicopters, big discounts are unlikely, even in the absence of international tourists. 

“To be sustainable long term we need to be careful that we don’t confuse price and value. Of course we have some special offers to tempt Kiwis, but after almost fifty years we are committed to being here for the long term.”

Kiwis and Australians make up the largest market for Southern Lakes Heliski, however, and the company hopes heli-skiing will become more popular with social distancing still a concern.

“We know people will be thinking more about personal space and proximity to others, so heli-ski seems like the perfect solution for a family or group of friends. Fresh powder, experienced guides and a great lunch in the mountains is surely the perfect Kiwi winter’s day.”

Rotorua Canopy Tours 

Our nation was once ruled by birds so it makes sense to get a bird’s eye view of it at least once in your life – for history’s sake as well as an adrenaline boost. 

Ziplining over ancient native forest on the outskirts of Rotorua is a great way to do it, but it doesn’t exactly come cheap. The original three-hour tour costs $149 per adult and $499 for a family of four. Take the higher, half-hour-longer “ultimate” tour and you’ll pay $219 per adult and $699 for a family. 

Rotorua Canopy Tours general manager, Paul Button, says about 60 per cent of the company’s customers were overseas tourists before borders closed so it will struggle without them. 

Asked how it would cope, he said “I think there is hope. I don’t think we’re going to manage; I think there’s hope we can survive.” 

The company is unable to operate under level 2 due to physical distancing rules and, while the wage subsidies have provided “a good stopgap”, “it would be nice to see more help to the businesses themselves”. 

Like many operators capitalising on the tourism boom before the pandemic, Rotorua Canopy Tours invested a lot into improving and increasing its offerings, in its case “premium nature experiences”. Confident the tours represent good value for money, the company will not lower its retail rates but “we are going to be very generous with locals in particular and families”.

If the company lowered its prices, both staff and customers would lose out, he says. 

“Tourism is about people. It’s about having great employees and providing great experiences. Our wage cost is our biggest cost and that will be the same for a lot of businesses. There’s all this talk about discount, discount, discount, but it’s like, well, that’s labour that you’ve got to squeeze. And I think it would be fair to say that a lot of tourism businesses have treated their staff very well over the last few weeks.”

Button hopes the domestic-only travel period will remind Kiwis that “New Zealand is an incredible place. The reason why we’re internationally so popular is because the country is mind-blowing and the variety of geography is unparalleled in the world. And I think New Zealanders forget that.”

Spending money with local operators is, he says, also about “investing in experiences, connecting with your loved ones and investing in people. 

“If you’re putting money into our pocket then you’re helping with people’s wages. We’ve got amazing high-value products in a country with amazing geography. It’s unparalleled in the world.”

Glenorchy Air 

Family-owned Glenorchy Air offers scenic flights to some of the South Island’s most stunning natural attractions: Milford Sound, Aoraki/Mount Cook, Mount Aspiring and beyond. 

But while there’s nothing quite like seeing these places from up high, particularly when you’re guaranteed a window seat, many Kiwis can’t afford to drop $279 on an 80-minute Milford Sound flyover, say. Or $499 on a four-hour flight over the Southern Alps taking in Mt Aoraki/Mt Cook, the Fox and Franz Josef Glaciers and baby blue Lake Pukaki. Or, for that matter, $1789 on a trip to Tasman Glacier, where you can carve your way down New Zealand’s longest ski run twice, taking in strange ice formations, seracs and ice caves.

Managing director James Stokes said the company will “offer a few more affordable options for Kiwis where we can”. 

Current deals “mostly targeted at people who might be trying to help the economy by doing one activity or something like that” include a $99 flight over the twin peaks of Pikirakatahi/Mt Earnslaw and a $189 Milford Sound scenic flyover. 

It also wants to expand its offerings beyond “the Milford Sound bread and butter we’ve done in the past… We want to offer more options to Kiwis to explore their backyard.”

With high compliance costs, however, Stokes said it’s not easy to lower prices. Particularly when 85 per cent of its customer base is effectively locked out of New Zealand. 

“We’re just doing what we can to keep our infrastructure, both people and equipment, together because it’s a lot harder to come back [if you lose them].”

Stokes acknowledges that activities around Queenstown are expensive but says they are necessarily so. 

“I don’t disagree that tourism around Queenstown is expensive, because it is. But it’s not because operators are trying to profit gauge. It’s because we have agents clipping tickets, we have regulatory requirements… and that all drives that ticket price up.

“You won’t find a single family-owned operator that is raking in huge numbers of dollars. New Zealand has a particularly high standard of compliance and that’s a good thing; it keeps everybody safe. But it does come at a cost to the operators.”

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