NZ tourism figurehead tips faster recovery for luxury sector

The Rees Hotel Queenstown CEO envisages expanded "trans-Tasman bubble" to Asia

The coronavirus pandemic has had a devastating impact for tourism and hotel operators in New Zealand over the past 5 weeks or so since the government locked down borders to visitors.

This week, LATTE chatted with Kiwi tourism figurehead and CEO/General Manager of The Rees Hotel Queenstown, Mark Rose, to get an update on how his luxury property is coping through the COVID-19 travel crisis, and what his thoughts are on the proposed “trans-Tasman bubble” between Australia and New Zealand, and how long he believes it will take for the market to recover.

Here’s what Mark had to tell us in our Q&A from across ‘the ditch’.

How are things at The Rees and more generally in Queenstown?

Being a high end leisure destination Queenstown is carnage with tourism businesses closed, the airport closed and Level 4 Lockdown, meaning no regional travel of any sort.

How has COVID-19 affected room occupancies at The Rees? (At this time of year, what level of occupancy would you traditionally expect of the hotel and residences?)

Occupancy started dropping around the third week in March and the hotel was empty (and still is) for all of April. Last April The Rees ran at 76.5% OCC in April 19 versus 0% in April 20 – May is generally our quietest month but we will run at 1% if we are lucky, down from mid 38% in May 19.

What are the prospects for the short-term, mid-term (beyond winter in 2020) and long-term (2021 and beyond) at the property?

Mark Rose, CEO and General Manager, The Rees Hotel Queenstown

It is very difficult to determine as there are three questions I need answered before I can make a call:

  1. A move to Alert Level One where Domestic travel via air is possible and regulations around social distancing have been relaxed allowing us to offer a stripped down service level. A ski season will make all the difference to Queenstown and Wanaka.
  2. An economic bubble containing Australia and the Pacific (New Caledonia is a good market for us) will be an immense shot in the arm – direct flights with Australia being my biggest market. An extension to this economic bubble to include Singapore, Taiwan, Sth Korea, Japan and dare I say, China – countries who have C19 under control.
  3. Renewal/cancellation of the wage subsidy. We have an awesome team and culture and putting it into hibernation will be difficult – I say hibernation as we will be back

Short term there is an amazing opportunity for New Zealanders and Australians to experience a world class destination/hotel at a leisurely pace. I don’t expect any/many other nationalities to be allowed to enter New Zealand this year and believe that the UK and US could be at least 12 months away.

New Zealand has recently downgraded its COVID-19 restrictions from Level 4 to Level 3. Has this had any effect on The Rees?

Not really – we are bringing in our teams in their own “Rees bubbles” to work around the hotel for 20 hours a week over four days. This was really about having them feel connected as many of our team do not have family/infrastructure to fall back on in New Zealand. We have HS initiatives in lace to ensure everyone is safe and sound. When our guests return our hotel will be in great shape, offering everything you would expect from a 5-star hotel.

Our Prime Minister has just announced that once New Zealand moves to Level 2, domestic air travel will be allowed – if New Zealand can have just a few more days of no/low infection rates and if New Zealanders can stick to the Level 3 rules, the move may well happen early next week.

For our town and our staff this is a very welcome shot in the arm!

What have been some of the key priorities and initiatives The Rees has undertaken during the crisis?

Our first priority was the health, wellbeing and welfare of our team (updates and wellbeing communications go out at least once a week etc to everyone) – Queenstown is an expensive place to live and as I have said previously many of our team are foreign nationals and do not have family to fall back on – this went hand in hand with ensuring we paid all of our amazing suppliers so that they could do the same to those dependent on them. Following on, the security of the hotel, the reduction in costs and a plan to market ourselves in this new reality.

What are your thoughts on the proposed “trans-Tasman Bubble” between New Zealand and Australia? Do you foresee this as an important strategy to kick-start limited international tourism to Queenstown and more broadly New Zealand?

Incredibly important for both countries – New Zealand is Australia’s second biggest visitor after China and Australia is New Zealand’s biggest. I would also not discount the marketing effect an alliance such as this would have on the rest of the world – both of our countries are looked upon with envy with the way C19 has been handled and the agents I deal with worldwide say they have clients lining up to come visit.

Does The Rees have any marketing strategies up its sleeve and ready to activate in the domestic and Australian market once restrictions are eased?

In the short term, marketing domestic South Island, followed by domestic New Zealand and then Australia is continually being worked upon and then importantly we are staying in touch with all of our amazing partners around the world. There has never been a better time to come stay!

Many New Zealanders have not visited Queenstown, or The Rees, and this is a great opportunity, with our borders being locked down for our domestic market to either come back and enjoy everything they loved about Queenstown or to come see why Queenstown/The Rees are so highly regarded worldwide – to experience Queenstown in a much more leisurely fashion than they may have three months ago.

How long do you foresee it will take before the New Zealand tourism market recovers to the point it was pre-19 March 2020 when the border was officially closed? (Speaking of which, were you in support of this move by the NZ government to close the border?)

Completely in support of border closure and in hind site think it would have been better to move earlier – it is very dreary listening to all of these “experts” who have the benefit of hindsight and especially all of these self trained immunologists telling us we could have done “things” differently! I believe complete recovery will be two to three years away but the markets we work in (upscale) will recover a lot quicker.

What are you most optimistic about for the future at The Rees and Queenstown’s tourism industry?

Queenstown and The Rees are iconic brands and C19 will not change that. From The Rees’ perspective we are well financed, have an amazing team and we have been working hard to expand over the last 12 or so months – this will continue at pace and I believe there will be a lot more opportunity.

Fast forward 12 months – how will you look back on this current period and the lessons you’ve learned (so far)?

I believe we will look back on this period as being a blip that we have survived by operating a business on good principles, being guest focused and not carrying any unnecessary fat. I also believe this will be an awesome opportunity for our hotel company to expand as we have the IP and channels to market that will ultimately add value to any acquisitions we may make.

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