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Rukau – A simple delight

14 January 2021

Tourism hopes pinned on staying clear of Covid-19

Thursday 9 April 2020 | Written by Rashneel Kumar | Published in Economy


Business community sees ‘glimmer of hope’ despite chilling bank forecast.

The coronavirus crisis is forecast to cost the Cook Islands economy $775 million, a bank says.

ANZ economists predict the country could lose $316 million in tourism earnings alone if there are no overseas arrivals over the next three months. That assumes a slow pick-up in the second half of 2020.

They estimate visitor arrivals to the Cook Islands could decline by 141,100.

They say the timing of the recovery to take a foothold is uncertain, adding the best case recovery is six months and the worst case is a year, when a vaccine for Covid-19 is expected to be available.

Finance Minister Mark Brown said the forecasts were already superseded by newer numbers and events unfolding in New Zealand, Australia, US and Europe. “I think we all know we are in a bit of downturn,” he said.

But Tata Crocombe, one of the country’s biggest resort owners, suggested one, more upbeat, scenario.

The Rarotongan managing director said there was a possibility Cook Islands could open its doors again to visitors from New Zealand, in the next three months.

This meant Cook Islands maintaining zero Covid-19 cases, and New Zealand controlling its outbreak. “We do not see the Australian, US, Canadian, Europe and Asian markets opening, it may take possibly a year for those markets.”

Crocombe said New Zealand might be locked down for an extended period – but there was another possibility that Cook Islands becomes the only travel destination for Kiwis under strict restrictions, including certifying they are Covid-free.

If this was so, the local tourism industry could become “very, very busy” after three months – but hotels could still expect only 20-30 per cent occupancy.

They would still need support from government and banks in order to remain in business.

“There is light at the end of the tunnel. We just need to continue working on refurbishing, developing and training our staff, getting ready for reopening in what could be a tough and competitive market.”

Fletcher Melvin, the president of the Chamber of Commerce, said Cook Islands was one of the few countries that could recover quickly, provided there were no Covid-19 cases here.

“There is a glimmer of hope that we will be one of few to open up to tourism again if New Zealand gets its Covid-19 under control,” Melvin said.

But an extended period of zero income from tourism could mean an increase in inflation or cost of living, and a bleak economic outlook.

Melvin said bigger companies would be “bleeding quicker than others” given the expenses to maintain their workforce.

Flights to Cook Islands have been reduced to one per week, from more than 15 during peak season. However the Air New Zealand flight is bringing only cargo and occasionally allowing stranded tourists access for transit through Auckland, on a case-by-case basis.