New $49 million fund to kick-start NZ tourism after Covid

Businesses in five key South Island tourist locations are being targeted by three new Government initiatives, worth $69 million in total.

From this Friday 1 April, tourism businesses in Westland, Southland, Kaikōura, Mackenzie and Queenstown Lakes Districts will be able to apply for a grant valued between $10,000 and $50,000 as part of the Government’s new Tourism Kick-start Fund. This is in addition to the current Business Advisory Support and business implementation advice funds already available.

There are three business initiatives eligible tourism businesses affected by COVID-19 can apply for:

  • $10 million Business Advisory Support (up to $5,000 per business operation) to enable businesses to receive expert advice and support, such as on changing target markets, or scaling their business.
  • $10 million in grants for businesses to implement business advice (up to $5,000 per business operation), including help with financial and cash flow management, business continuity, marketing, digital enablement and HR advice.
  • $49 million Tourism Kick-start Fund, to contribute towards existing tourism businesses scaling back up for the return of international visitors ($10,000 to $50,000 per business operation). The grant will be calculated based on 2 weeks of pre-COVID-19 revenue set at 2 weeks of annual revenue for the 2019/20 financial year:
    • If your revenue in 2019/20 financial year was $60,000-$260,000, you would receive $10,000.
    • If your revenue in 2019/20 financial year was more than $260,000, you would receive two weeks revenue up to a maximum of $50,000.

Tourism businesses can apply for one or all of the initiatives if eligible. Each initiative provides one grant per business operation, which must be physically based in at least one of the five locations specified.

Richie O’Meara, Managing Partner at BDO Southern Lakes and Central Otago, said: “It’s great to see the Government acknowledging the pain of the last two years for tourism businesses. I’m working with a number of local tourism entities who will be keen to take advantage of this fund. Tourism in Aotearoa is absolutely open for business and the clients we work with are keen to make sure their business is as strong as it can be to harness the opportunities that NZ’s borders opening will bring. They are ready to go from merely surviving to thriving, and this fund will help them get there.”

Who is eligible for the support?

To apply for the Business Advisory Support fund, you must:

  • Be a tourism business – which is defined as a business where at least 50% of operational output is purchased by tourists (domestic or international). This can include service businesses whose output is purchased by tourism businesses, and encompasses accommodation, arts and recreational services, food, transport and retail.
  • Be physically based within at least one of the five districts.
  • Be a privately-owned business or Māori Trust or incorporation under the Te Ture Whenua Māori Act 1993 or similar organisation managing Māori assets under multiple ownership (Charitable Trusts, Incorporated Societies, Non-business entities, and Local and Central Governments are ineligible).

In addition, to apply for the Business Advice Implementation Grant, you must also have received advice from the Regional Business Partner Network or similar alternative channel.

To be eligible for the Tourism Kick-start Fund, in addition to meeting the criteria for the Business Advisory Support fund, you must also;

  • have engaged in hibernation-like activities, for example: reduced opening hours, level of services, customers or business capacity due to COVID-19. Compared to 2019/20 financial year, a business must have experienced a drop in annual revenue of at least 50%;
  • have a minimum annual revenue of $60,000 pre-COVID-19 (2019/20 financial year);
  • not have received direct Government tourism support from the Strategic Tourism Assets Protection Programme; and
  • pass a viability test demonstrating that the business will remain viable and operating up to and beyond the border re-opening. This can be discussed with one of your Lead Entity’s Growth Advisors.

The Tourism Kick-start Fund can be used for recruitment and wages, training, operating expenditure, fixed overheads (e.g. leases), marketing and repairs or maintenance directly related to scaling up business operations. It cannot be used for capital expenditure, any situation where a potential conflict of interest may arise, or paying off debt.

You can read more about eligibility here.

How to apply

Each location has a lead entity administering the fund, and applications must be made directly to that entity:

BDO is a registered service provider with the Regional Business Partners Network and we are currently supporting tourism clients through the ongoing effects of the pandemic. If you need help applying or want to check your availability, reach out to your local office today to see how BDO can help you kick-start your tourism business.