CHRONIC STAFF SHORTAGES A LONG-TERM PROBLEM

Skyline Queenstown’s general manager, Wayne Rose, spent two years struggling with forced closures and plunging visitor numbers during Covid, so was excited when New Zealand’s borders began opening this year.

‘‘Probably a month after Australian borders opened we started seeing a slow lift. Then the Australians started hitting the ski fields pretty hard.’’

Hotels, restaurants and bars were quickly snowed under, as they dealt with huge spikes in visitors after losing the massive migrant workforce during the pandemic.

In 2019, the Skyline Gondola and Luge complex was run by 250 staff spread across its cafe, a 308-seat restaurant and the luge. This winter it has only been able to secure 125 staff.

Rose needed to employ staff quickly to cope with demand but so did everyone else. Local newspapers ran hundreds of situations-vacant advertisements. Every shop, restaurant and bar had a ‘‘staff wanted’’ sign in its window. Bus drivers, builders and cleaners were in demand.

Four months later and the situation hasn’t changed.

‘‘It’s almost impossible with a finite labour market in Queenstown,’’ Rose says.

Queenstown Chamber of Commerce chief executive Ruth Stokes says for many retail and hospitality businesses who have struggled over the last three years, winter 2022 has been the worst period by far.

Some businesses have taken on debt as they have ridden out the Covid-19 pandemic, and have put all their energy into survival. Now they have customers but no staff to serve them.

‘‘Business have been bending over backwards to reduce costs, work smarter, and improve their offering, and they are now in this storm where they could be open, but they can’t.’’

The staff that are working are struggling with long hours and small pay increases. Many want to leave, Stokes says.

It’s impossible to attract new staff when there is no one to apply, she says.

Skyline Enterprises people and capability manager Sally King says that in pre-Covid times, the company could get 100 applicants for one luge operator role.

Now it gets an average of five applicants and sometimes not one of those is suitable.

Rose says Covid-19 isolation rules, which have included household contacts having a seven-day isolation period, have also had a huge impact in a town where many hospitality staff flat together.

One person with Covid-19 can mean six staff members can’t come to work and that has contributed to a 500% increase in sickness rates this year at Skyline.

Rose’s operational team is essentially burnt out as they balance their own jobs with fulfilling frontline roles as required.

‘‘I was cleaning the toilets last Tuesday because somebody called in sick and there isn’t actually anybody to fill those roles.’’

Queenstown’s critical staff shortage is not unique.

All over the world Covid-19 restrictions have forced backpackers – the traditional mainstay of low-paid and hospitality and accommodation work – and skilled migrants such as chefs to return to their country of origin.

But it has been amplified in Queenstown, where the normally resident population of about 15,000 is bolstered by large numbers of immigrant workers.

Queenstown Lakes Mayor Jim Boult says the number of migrant workers living in the district dropped from 5000, or about one-quarter of the population, to 2500. The number of people on work visas dropped from 3000 to about 1000.

Economist Benje Patterson compiled a June labour market snapshot for Queenstown Lakes District Council which showed many businesses operating at 75% below capacity.

He estimated QueenstownLakes businesses missed out on $3 million in June due to the lack of workers and reduced services as visitors returned home with money unspent.

That could be as much as $30m over a year, he says.

As businesses compete locally for the limited labour pool there have been wage rises, along with the lift in the minimum wage, which have put further pressure on the business model.

Wages have risen almost 9% in the past year in Queenstown.

Skyline is feeling that pinch too, Rose says.

‘‘We’ve got some capacity to absorb that. I don’t know how smaller businesses are surviving,’’ he says.

Wage pressure and offers such as retention bonuses have inevitably led to employee poaching.

‘‘It’s such a finite pool that everyone is competing for the same employees. There’s shoulder-tapping, people jumping ship to go to another company.’’

Until there are new workers in town, there’s a sense that all options have been exhausted, Rose says.

‘‘It isn’t sustainable to continue like that.’’

But they must continue. Summer is looming and visitor numbers are expected to keep growing.

It is often an overlooked fact that Queenstown hosts more visitors in summer than winter, a high proportion of whom are walkers, hikers and mountain bikers from New Zealand, Australia and North America.

Events such as the Queenstown Marathon, which typically hosts about 10,000 runners and many more supporters in November, annual New Year’s Eve celebrations and summer concerts are huge drawcards.

Air capacity is also growing, which will likely bring more international visitors.

Rose believes it will be busier than in winter and even more stressful.

Novotel Queenstown Lakeside general manager Jim Moore agrees, but says everyone is trying to stay positive.

‘‘We have people in town. I would much rather that than having no one here,’’ he says.

Like other hotel industry managers, he has coped with staff shortages by reducing the number of rooms available, and offering guests $20 vouchers to spend in-house, extra loyalty points, or a $10 donation to the Cure Kids charity for each day they forgo room cleans.

Since the start of the ski season, the 273-room hotel has also set aside about 20 rooms to accommodate staff unable to find anywhere to live in Queenstown.

He expects the ongoing staff shortage and sporadic return of markets will mean an unpredictable 12 to 18 months ahead.

‘‘It’s more positive than negative. There are just challenges,’’ he says.

Accommodation is one. With many Queenstown residents keen to capitalise on the return of visitors, the short-term Airbnb market has removed many rental options in an already tight housing market, making it difficult for workers to find somewhere to live.

The Government’s immigration changes are also frustrating efforts to get overseas workers.

The working holiday visa programme was not providing the numbers hoped for, partly because of limited air flights and the competition from other countries, and the workers who did arrive, while appreciated, required training and stayed for only a few months, Moore says.

There has been a massive upswing in the number of high school students working, and university students returning home during breaks are also welcomed, he says.

Mostly he would like to see the accredited employer work visa scheme, which replaced the essential skills work visa category this year, working better.

‘‘We’re still working through that. We’re getting some roles and not others. I’m not sure why. For example, we haven’t been able to get any chefs and there isn’t enough. That seems bizarre.’’

Stokes says she is hearing stories of it taking four months for visas to be processed under the new system.

She warns that those reliant on tourism across the country should be watching what’s happening in Queenstown.

‘‘Our winter is the bellwether for New Zealand’s summer. So for those people quiet during winter, like Tauranga or Coromandel, the stress our businesses are under now is going to be felt everywhere.

‘‘It’s going to be tough to get staff and then to hold on to them. Even with demand coming out your ears you might not be able to open. Unfortunately I don’t see there being any answers any time soon.’’

Rose sees some glimmers of hope. Some of the 2000-odd ski industry workers might remain in Queenstown at the end of winter and look for new work.

Working holiday visa applicants from Europe and North America who have already visited Australia might move on to New Zealand as he did as a young man, he says.

‘‘It’s all guesswork. My crystal ball is broken.

‘‘But I don’t think we’ll be able to open any more hours. We think we’re at capacity. We simply need too many people to open the restaurant seven days.’’

After summer, Skyline Queenstown will close in April for 8-10 weeks as it completes construction of a new base building and the installation of new gondolas.

Rose says they will not risk losing staff over that time.

Many staff members will be taking leave and for some it will be an opportunity to travel overseas or visit their homes for an extended period. But from about the fourth week Rose expects to see workers returning to town and looking for work.

‘‘If they choose to make themselves available, we will pay them.’’

He certainly does not want anyone to feel sorry for the company. ‘‘But people need to understand that we’re in a critical spot here with no sign of anything to remedy it any time soon.’’