Change and Consequence

A couple of days ago the cruise ship Magnifica had the dubious distinction of being the last such vessel in the world to dock following the onset of COVID-19.

It was a remarkable journey for its more than 1700 guests: they were last allowed ashore in far-off New Zealand on 19 March, and since then had been roaming the seas looking for a port that would have them. That included a couple of days in my hometown of Fremantle in Western Australia where they were not allowed ashore. It is odd to think that Sandi and I cycled past them here yet they would not set foot on land until France. That is a lot of sea days, in cruising parlance, and especially so when there was not one virus infection notified.

Magnifica is owned by MSC Cruises, part of the Mediterranean Shipping Company that more broadly is the second largest container shipping company in the world. The cruise division is the fourth largest in the world (behind Carnival, Royal Caribbean, and Norwegian) but the largest to be privately owned. It was founded in Naples but, ironically for a cruise company, headquartered in Geneva.

Its executives, like all the others in the industry, will now be figuring out what happens next, with most options looking ugly. Where publicly traded, cruise industry shares have been smashed.

Some dire predictions see the end of the industry, period. That is probably fanciful, even though the immediate prospect of a boatload of individual and class legal actions is daunting in scale, time and magnitude as well as complexity.

Meanwhile the human cost of the past three months continues for passengers and crew.

What this all points to, though, is the impact the virus has had on mass tourism globally. In countries like Australia and New Zealand, where tourism invariably appears among the top three or four export income earners, the impact has been massive. In New Zealand, the budget impact is palpable, a major contribution to what is being imagined as a massive recession.


My “other” hometown of Queenstown is a case in point, having gone from boom to bust in a moment. Locals are reporting major social issues and the need for food support for families and foreign workers as major tourism companies close up shop.

The knock-on effects are clear. In recent times Queenstown has averaged over three million visitors a year. That is why a town of about 16,000 people had hosted four or five major supermarkets, three major hardware chain outlets (with a fourth planned) and a slew of bars, restaurants, cafes and coffee shops to service all the takers for bungy jumping, mountain biking, hiking, skydiving, paragliding, jet boating and all the rest.

That is why this small town, immediately before the virus hit, had New Zealand’s highest accommodation rental rate (and a median house price sale level that has only just retreated below the $NZ1 million mark). That rental market collapsed because of two things: demand vanished, and a raftload of AirBnB short term rentals returned to long term ones.

This is replicated around the world.

Flight Centre

In Australia the carnage is best demonstrated by the case of mass travel company, Flight Centre, a hitherto “good” story of how three entrepreneurial Aussies turned themselves into collective billionaires. A year or so ago the share price stood at $A61. It is now under $A10.

In Spain, where tourism accounts for 11% of GDP, the industry has collapsed.

And Barcelona, one of my favourite cities, is a lot like Queenstown. It had reached thirty million visitors a year, at least three million of those coming off cruise ships. That is all now gone. As Isabelle Kliger points out, Barcelona is one of the places that has transformed immediately from over-touristed to non-touristed, and that is the Queenstown story.

That immediately questions the future. Take air travel, for example. Here in Australia Virgin has effectively gone bankrupt with the federal government pressured to bail it out simply to avoid a Qantas monopoly. The New Zealand government has already provided Air New Zealand with a loan, simply because there is no other airline. Between now and Christmas Air New Zealand will run a skeleton domestic schedule and the barest international one to Australia and islands in the South Pacific.

Notably, that domestic schedule at present does not include Queenstown which has gone from about thirty flights a day to…none. Not one. The tourist market drove the need. So how Queenstown reimagines itself will have a major impact on how it finds itself in the national framework – there is an obvious need to move away from mass to higher value tourism.

Smart Economy

But there is also a need to develop a much larger smart economy alternative that becomes a price-setter rather than a price-taker. Some Queenstown thinkers have been saying that for a few years now, and authorities might be wishing they had listened more closely if they look around the world.

The chain reactions here obvious. To produce a smart economy means the need for a smart education system seen as an investment rather than a cost. And that does not mean transforming university systems into mass ones, as Australia has done (where over half the total number of students enrol in business courses). The investment itself needs to be strategically targeted.


The Broadway League announced today that theaters will remain closed until June 7, effectively ending the 2019-2020 season.

And there is a hugely important point to be made here- that investment must not be totally and exclusively in STEM (Science, Technology, Engineering, Mathematics).
It has become a truism in recent weeks that the arts and culture industries globally have been massacred, at the very time vast numbers of people have survived the lockdowns in their countries by reading; watching live streamed music and theatre performances; binge-watching film and television programs; watching virtual displays and demonstrations from galleries and museums; or scouring online databases for family histories.

The inversion here is obvious.

Cost cutting in most economies has immediately victimised soft targets like art and culture at the very time their works are most needed. That cannot happen again, and countries should look to the likes of Germany and the UK for future investment patterns.

And those arts and culture issues are not the only unexpected consequences of the virus sweeping the world. In that dreadful epicentre of New York City there are some surprising statistics that offset horrible ones like the 2,637% increase in unemployment. Air pollution has declined 25%. Trash in Manhattan has retreated 7%. Crime has declined 30%. Traffic congestion at the main bridges has gone down by 60%. And there have been 3000 applications to foster dogs.

A lot of that will disappear when economies are “opened” again, but the numbers are a reminder of what might be if we plan and develop carefully. In Delhi, for example, the air quality has been the best in years, and elsewhere across northern Indian people have seen mountains for the first time in ages as the haze disappears. As we “recover”, it would be marvellous to plan to retain at least some of that.

And then there are all those reports about the return of the wildlife.

Wild goats have moved into Llandudno in Wales.
Orcas have bobbed up in Wellington harbour in New Zealand.

But what about those “dolphins in Venice canals” stories? Regrettably, not true.

Therein lies another pointer for future thinking, though – what do we learn about human behaviour from all this because, in the end, that behaviour determines whether or not we learn anything from what in too many world locations has been a ghastly tragedy.

4 thoughts on “Change and Consequence

    • Thanks Alan – it is really an obvious one, isn’t it, but all too often overlooked. Like preventative rather than restorative health. We need to fund the new generations to get skills that have them ahead, not playing catch up.


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