Government funding freeze impacts Southern Lakes tourism projects

The pausing of a government fund supporting innovative tourism ideas has impacted two Southern Lakes projects, including one launched by the Queenstown Lakes District Council last year.

The council had announced plans to investigate and capitalise on the potential lifetime value of visitors to the district, with an initial $25,000 of taxpayer investment for the project secured in August.

However a subsequent application for 75 percent of the roll-out costs for it is now in limbo, following a decision by Tourism and Hospitality Minister Matt Doocey earlier this month.

While applicants across the country were expecting a response to their applications for funding of up to $10 million, the minister instead delivered the news that no money would be forthcoming as the programme, administered by the Ministry of Business, Innovation and Employment, had been put on hold.

The news has disappointed a trio of locals behind another innovative tourism idea - Queenstown tourism operators Matt Wong and Trent Yeo, together with Cromwell tech entrepreneur Duncan Faulkner, are driving 'Hey Kiwi', an artificial intelligence-powered digital tour guide.

Like the council, they had received initial funding of $25,000 from the government to investigate their business idea, and several months later had put their own application in the mix for a subsequent round of funding designed to help get their project off the ground.

"We were genuinely excited by the initial significant funding available through the programme. It represented a pivotal moment for New Zealand tourism, promising to enable truly transformative innovation within the tourism sector," Mr Faulkner says.

"It was not just about financial support; it was about putting New Zealand on the map for tourism innovation and securing a sustainable future for the industry."

Mr Faulkner believes the idea they were working on had the potential to enable "billions of dollars to be reinvested into tourism over the medium term by reducing booking fees and keeping tourism dollars in New Zealand".

He says the move by the government to curtail investment in tourism innovation seems "shortsighted".

"New Zealand's dependency on tourism is significant, and innovation is crucial for our resilience and growth."

QLDC economic development manager Peter Harris remains optimistic, saying the government has indicated it is keen to still find ways to support innovation within the tourism sector.

Minister Doocey has said no final decisions have been made on the future of the fund, and it had been paused in response to current fiscal constraints and to allow a review of expenditure by the ministry.

If the tourism innovation programme does not proceed, he has said he is open to exploring ways to progress some of the good ideas that the fund had supported thus far.

Mr Harris says for now it is a case of "wait and see" for the council.

"If funding is not secured via the Innovation Programme for Tourism Recovery, the scale of the project will be reviewed with the aim of undertaking smaller pilot projects to build momentum over time."

Mr Harris says research indicates "there’s untapped potential for New Zealand to create more value from tourism" by better understanding the potential "lifetime value" of its visitors.

For example, a visitor can be motivated to buy Kiwi products after they return home or to invest, study or do business in New Zealand, he says.  

Main image (left to right): Hey Kiwi founders Matt Wong, a Queenstown Lakes District Councillor and the owner of iFly, Trent Yeo, the executive director of ZipTrek, and Duncan Faulkner, the founder of Southern Software.