Waikato Business News July/August 2023

6 WAIKATO BUSINESS NEWS, JULY/AUGUST 2023
Haere rā Covid
In August 2021, as New Zealand moved into yet another
Covid-19 Alert Level 4 lockdown, the future of tourism in our
region looked decidedly uncertain. But two years later things
are very different – our international borders have fully reopened
and we’ve seen the removal of the last of our country’s
Covid-19 restrictions, signalling a return to normal life.
In the time since international
borders fully reopened
to most travellers at 11.59pm
on 31 July 2022, tourism in
Waikato has recovered at an
impressive pace.
Earlier this year, we celebrated
our first summer season
with international visitors since
early 2020. Despite challenges
with staffing and severe weather
events that could have derailed
the summer, our tourism operators
reported a good season.
Conferencing has been
strong over the past 12 months
and looks set to continue, with
events like the trans-Tasman
AuSAE LINC conference and
the New Zealand aquatic industry’s
WAVES conference set
to bring hundreds of business
travellers to the region in September.
The incentives market
is also performing well, with
Amway – the world’s largest
direct selling company – choosing
New Zealand, including
the Waikato, as the destination
where it will send the top
performing employees from
its China offices as part of its
incentive programme to motivate
and reward them.
Successful events like the
World Rugby Sevens, international
cricket fixtures, Fieldays,
Balloons over Waikato,
Matariki ki Waikato Festival
and the NZ Darts Masters
all add to our reputation
as a vibrant city and region,
attracting visitors and boosting
the economy.
Most recently we welcomed
fans and teams from Zambia,
Japan, Switzerland, Norway,
Portugal, Vietnam, Costa Rica,
Argentina and Sweden as part
of the FIFA Women’s World
Cup 2023TM. This influx of visitors,
at what is traditionally a
quieter period for international
visitors, has been another boon
for the region.
By the numbers, we’ve seen
13.2 million visitor days to the
region in the past year, with 88
per cent of those domestic. Both
domestic and international visitor
spend is up on the previous
12 months, by 18 per cent and
225 per cent respectively. Hamilton
City has the top overall
TELLING
WAIKATO’S STORY
BY NICOLA GREENWELL
Chief executive, Hamilton &
Waikato Tourism
commercial accommodation
occupancy rate for the country
at 75 per cent, with the rate for
the region coming in three per
cent above the national average
of 57 per cent.
While more work is needed,
there has been some good news
for those struggling to find
staff, with Immigration New
Zealand approving close to
18,000 Accredited Employer
Work Visas since May last year.
Cooks and chefs are leading the
charge into the country, representing
almost 30 per cent of all
approved visas.
New Zealand has also seen
more than 60,000 Working
Holiday Visas approved since
March last year, with an additional
32,276 granted under
special direction from the Minister
of Immigration due to the
impacts of being unable to enter
New Zealand during the Covid-
19 pandemic. Working Holiday
Visas offer dual benefits for the
tourism and hospitality sectors,
by bringing people who are
both visitors and workers into
the country.
Perhaps the most exciting
news is that this all doesn’t look
like slowing anytime soon. Our
operators across the region are
reporting strong interest and
bookings for the upcoming September/October
school holidays,
and beyond into the 2023-
24 summer season.
Our international markets
are now all back on stream,
with Australia and North America
leading the way. This is supported
by increasing air connectivity
into New Zealand, with
several more airlines announcing
their return to New Zealand
later this year.
Ten airlines, including Air
New Zealand, Qantas, United
Airlines, Delta and American
Airlines, are now offering flights
between New Zealand and the
United States or Canada and
the next couple of months will
see 46 per cent more capacity
– 300,000 more seats –
from North America than last
summer, with some airlines
offering more seats than before
the pandemic.
The Tourism Export Council
of New Zealand (TECNZ)
International Arrival Forecasts
2023-2025 is forecasting a
return of 80.4% pre-Covid total
arrivals by year ending June
2024 and 100% by year ending
June 2025.
As we move into this new
era Tourism New Zealand and
Regional Tourism Organisations
(RTO’s) are focused on
attracting high quality visitors
– those that enrich our
communities and create value
more broadly for the benefit
of our people, our place, and
collective prosperity.
The challenge for all of us
is to be ready to leverage these
opportunities – something I
have no doubt we’re up for.
Housing Affordability: are
we solving the right problem?
A
number of conversations
recently have
led me to ask whether
we are focusing our collective
problem solving attention
on the right part of the
problem with regards to
housing affordability.
Last month I wrote about
several new building technologies
and speculated as to
the potential of technology
and automation to improve
productivity in the construction
sector. I’ve also previously
touched on inefficiencies
related to the often
segmented, siloed work of
different parties in property
development and the need for
a more joined up end-to-end
development approach.
However, while they may
help to bring down building
costs over time, neither of these
are likely to result in immediate
improvements in the cost of
new housing of the magnitude
required to make it ‘affordable’.
And despite recent drops, and
changes to tax settings, the
price of existing housing stock
remains high and continues to
enjoy a significant advantage
over other investment options
for those who have existing
LANDMARKS
BY PHIL MACKAY
Phil Mackay is Business
Devolpment Manger at
Hamilton-based PAUA,
Procuta Associates Urban +
Architecture
equity to leverage.
Some councils are testing
the idea of measures that
would require developers to
include a certain percentage
of ‘affordable’ houses in new
developments. While well-intentioned,
I’m sceptical as to
whether this would result in
desirable outcomes. In the
best case scenario such measures
would only solve the
affordability problem for the
first purchaser, thereafter the
market would again dictate
the price.
Organisations such as
Bridge Housing are implementing
innovative models to
make home ownership available
to those on more modest
incomes, while others are
exploring co-housing concepts
and Māori hapū are initiating
papakāinga developments to
house their whānau.
Rather than focusing on
affordable owner-occupied
housing, if the core issue is providing
places for people to live,
more consideration should be
given to building appropriate
rental housing.
The Property Council has
been advocating for measures
to enable more ‘Build-torent’
developments in NZ for
some time and their website
offers excellent background on
the concept.
In a nutshell, build-to-rent
refers to developments of reasonable
scale built specifically
for rental, professionally
managed and typically owned
by investors who have shares
rather than individual unit
titles. For the landlord, provided
certain criteria are met,
build-to-rent properties are
exempt from interest limitation
rules and therefore eligible for
interest deductibility, unlike
other investment property.
For tenants there are a
number of benefits. To qualify
for interest deductibility tenants
must be offered a rental
term of 10 years, so security
of tenure is significantly better
than a typical market rental.
Also, when the intention
is for long-term rental, developers
will generally build to
meet the needs of occupiers,
rather than to meet the market
for sales. This can mean more
diversity of types and sizes of
home, and also more focus
on providing amenities such
as shared lounges or outdoor
areas, gyms, or on-site cafes.
Similarly, when long-term
maintenance costs are a key
consideration, it makes sense
to invest in the quality of materials
and worksmanship.
As build-to-rent properties
are professionally managed,
maintenance requests
are dealt with quickly, rather
than having to deal with private
landlords who potentially
don’t have the time, money
or inclination to resolve
issues appropriately.
Addressing housing supply
and affordability is a complex
challenge requiring a range of
solutions. We absolutely must
find ways of building houses
more affordably. However,
home ownership may not be
a realistic goal for everyone,
and we have a responsibility
to make sure that everyone in
NZ has access to safe, suitable,
places to live. Build-to-rent is
another tool we can use.