Queenstown tourism faces unfolding crisis
“The old adage was that when America catches cold, the rest of the world gets the flu,” Queenstown Chamber of Commerce chairman Alastair Porter said, according to the Queenstown Times.
Talking to the Queenstown Times from the United States, Mr Porter said the word on the street there was “depression”.
He did not think a financial collapse in the United States had the power to drag down the rest of the world – as it did in the Great Depression of the 1930s – because China’s rise as a trading super power might mitigate the effects.
But even the Chinese might tighten their belts.
“The United States bought a lot of Chinese products,” he said.
He was also grateful a bulk of visitors were Australian but said Queenstown businesses should be aware of what was happening.
Having only just arrived in the US the day after $700 billion was wiped off the United States sharemarket, Mr Porter already had a sense that the crisis had hit more than just financial institutions such as Lehman Brothers, Fannie Mae, Freddie Mac and Merril Lynch.
Everyone he had met was worried about the economy.
“They think it will be the biggest financial crisis since the Depression,” he said.
However it was still “early days” and too soon to make predictions.
“It is an unfolding crisis . . . it will take a little bit longer to understand it,” Mr Porter said.
Queenstown Lakes mayor Clive Geddes was also concerned about the effect the week’s events could have here.
The crisis in the United States was also being mirrored in Britain, Europe and parts of Asia – all traditional sources of tourists for Queenstown.
“We need to keep a very close eye on the relative health of the visitor markets – some of the markets which have provided the significant growth over the last 10 years . . . are having problems,” Mr Geddes said.
“We could see a real downturn in visitor numbers.”
The possibility is something Destination Queenstown chief executive officer David Kennedy has been well aware of for the past eight months.
“For the last year we have been watching the global credit crunch and the subprime mortgage issue,” Mr Kennedy said.
“Destination Queenstown identified the warning bells about eight months ago – hence our call for more funding [to market Queenstown] in Australia.”
He said the extra $1 million being collected from Queenstown businesses this year could have an immediate benefit of cushioning the blow of a global crisis.
“Australia has been slightly less affected . . . partly because of its mineral wealth and the demand for that in China,” Mr Kennedy said.
The other factor is the relative closeness and cheapness of flying across the Tasman.
“People don’t see it as a big journey,” he said.
However, attracting Australians would not insulate Queenstown businesses completely.
“We are expecting challenging times and reduced [visitor] numbers,” Mr Kennedy said.
“If there was any time to look at costs, this is the time to do it.”
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