Discover Waitomo is the first “strategic tourism asset” taxpayers are rescuing with a $4 million payment.
A “Strategic Tourism Asset Protection Programme” was part of a $400 million tourism package announced at the Budget in May.
Businesses with “strategic tourism assets” can apply to the Ministry of Business Innovation and Employment for funding. The department will assess applications and make recommendations to a “Tourism Recovery Ministers Group”, which will have the final say on who gets funding.
The group includes the ministers of tourism, finance, Māori development, conservation, and the under secretary of regional economic development.
To be considered “strategic”, the tourism asset must be nationally and/or internationally recognised; a key attraction for New Zealand or a region of New Zealand; responsible for significant visitation to the region where it is located and, in its absence, visitation to the region would be significantly diminished; and generate significant spill over benefits to the region where it is located.
Applicants need to have exhausted all other forms of support (government and private) before being eligible for a cash payment.
Tourism Minister Kelvin Davis said it might not have been possible to preserve Discover Waitomo – a “key asset” – and help it retain a “highly skilled workforce with specific skills and experience” without taxpayer support.
Discover Waitomo is owned by the NZX-listed company, Tourism Holdings Ltd. It runs tours at Waitomo Caves for people to see glowworms and do black-water rafting.
Tourism Holdings on May 26 announced it was starting a restructuring process that would likely affect 140 staff from its Waitomo and Kiwi Experience businesses.
Its share price was up 4.61% between market open on Thursday and the time of writing. However its share price was down 39.6% from a year ago.
Davis said that where there is urgent need to fast track applications ministers will respond quickly.
Applications under the Strategic Tourism Asset Protection Programme are open until June 18.
Davis also announced that up to $20.2 million has been made available for the country’s 31 Regional Tourism Organisations to help them support operations in their regions.
And, he appointed co-chairs to a new public-private taskforce that will continue work started by Tourism New Zealand to “reimagine the future of tourism”. The co-chairs are Rotorua Mayor Steve Chadwick and Tourism Holdings Ltd CEO Grant Webster.
39 Comments
"Govt should be taking a stake in these companies or issuing them a loan, not forking over our cash."
Government should have negotiated a fixed income security (preferred share or bond) and then had warrants attached (with an exercise price at the then share price).
That would avoid moral hazard, and would get management to maintain sufficient liquidity or pay the price for insufficient liquidity in future. That way government supported the business, and they got compensated accordingly. The government could then sell the shares in the future in the market when conditions are improved. And the taxpayer would be a net beneficiary.
Any financial support for listed companies by government should be in a similar manner.
That sort of deal may have made management prefer to do a rights issue.
The very same. Notice THL hasn't put out a rights issue or anything, why should the shareholders stump up any cash when Johnny taxpayer will foot the bill? I'm absolutely disgusted by this lolly scramble with my tax dollars.
Immediately shows that "Applicants need to have exhausted all other forms of support (government and private) before being eligible for a cash payment." is a bald-faced lie.
There's the rub. If the businesses fail, then a new owner will buy the assets and take on the risk. As harsh as it sounds, we should let businesses fail, particularly ones that are based on a natural asset which won't be going anywhere. Before anyone says "but what about the jobs!" remember if a business is sold it will hire new staff. Propping it up only prevents the staff from finding employment in a business that is viable.
Ugh macro issues bite - they make pragmatists sound like baby killers
THL same company that offered Motorhome for $29 per day.
Also THL must be very well aware that come what may government has to and will come to bailout their National asset so has the government checked what they have done themself besides giving $29 motorhome before availing the money. Not saying that have not but just raising a question.
the same company that quoted me over $130 a day when i inquired about using them to enable my staff to stay on site during the lockdown - providing 24/7 care in dementia and mental health facilities - but charge the government a couple of thousand a week to use them for quarantine
RORT RORT RORT -- if we bail them out then lets take a substantial stake - the company can always have a buy back clause inserted to allow them to buy the government out - at cost +10%
Tourism operator THL nearly doubled its annual profit as it expanded to become a global company.
Chairman, Rob Campbell said the company had made another record profit from trading of $37.5m, up 24 per cent, on turnover of $426m, up 25 per cent.
FYI, THL did a rights issue in July 2019 (just over 10 months ago) and raised $50mn
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.