RAROTONGA,COOK ISLANDS- MARCH 09,2021: 3:58PM (COOK ISLANDS NEWS/PACNEWS): As Cook Islands 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 (US$5,696) a month to maintain their properties. For larger establishments, that figure could be as high as $80,000 (US$56,961).
“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, and 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, and 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.