Monday, 2 August 2021

Broken bookings

Cameron Conradie has been keeping a close eye on how the MIQ booking system works, or doesn't. MIQ doesn't have nearly enough spaces to meet demand, and has been running well below capacity because the booking system doesn't work. 

Despite the reduction in operational capacity by 500 rooms, based on available data, the average occupancy for April was 67.4% (note a number of day’s data were not published), 57.1% for May, 67.1% for June and 71.1% for the first half (1-15) of July. This is taking occupied rooms against the advertised operational capacity.

By taking rooms actually occupied against full advertised operational capacity, and assuming a 14 day turn-around, I calculate that more than 13000 vouchers were not used/not issued since the beginning of this year. Each of those unused rooms represents a significant economic opportunity cost and an avoidable and unresolved human tragedy.

(Obviously the system cannot run perfectly to capacity at all times, but the scale of the underutilisation is upsetting.)

His tentative diagnosis?

I have chatted to multiple people who have successfully made bookings. Some have been through MI, or are currently completing their 14 day stay.

  • It is pretty clear that the system has minimal if any controls/cross checks in it’s coding to prevent/deter abuse.
  • It seems it is possible to make multiple bookings for the same passport number. It seems that people create multiple accounts in order to improve their chances of getting flights to match booked room vouchers.
  • Based on anecdotal evidence, It seems the only burden of proof on the traveller in order to finalise the booking within 48 hours of initial booking is to input a valid flight number (final leg of journey) for the corresponding day of arrival. It seems there is no requirement to prove that a flight ticket is held. Interestingly, the flight numbers are even made available on the site. Travellers are emailed, but it seems to be simply to confirm that everything is correct and that their other bookings can be cancelled. I’m not sure at what point this email confirmation is received.
  • I suspect that many people are hedging their bets on travel restrictions lifting and being able to secure flights matching bookings already confirmed.
  • I suspect many are hedging their bets on being granted permission to enter NZ.
  • I suspect that many are on a hamster wheel of repeat bookings in the hope that their travel plans might work out.
  • I suspect that many bookings are not being cancelled if travellers’ plans change or if they are unable to get flights with the flight number used to make the booking, hence the significant discrepancy in bookings vs actual arrivals.

So it looks like folks are making multiple bookings while trying to secure flights and the system doesn't wipe the consequent duplicate bookings when travel plans firm up. 

A year ago, the Initiative suggested flipping the system. Instead of government trying to charge some people for MIQ spaces after they go through MIQ, they should instead let MIQ facilities charge arriving visitors whatever they want. The government would charge the facility for the government's costs. And the government would provide eligible returning Kiwis with a voucher covering the equivalent of the cost of a stay at a mid-tier facility during off-peak times. That would be less than what facilities would charge during times of peak demand, but that's ok. Airlines charge a lot during peak travel periods too. 

Critically, under that system, you couldn't use a voucher more than once. If you put the voucher toward the costs of your coming visit, you couldn't use it again when booking the next room if you were trying for multiple bookings. Facilities wouldn't want ghost or cancelled bookings so would be charging enough up-front to discourage that. And much of the problem would be resolved. 

I wonder how much of the problem would ease if even a quarter of MIQ rooms were just put up for auction at whatever price would clear the market, with the government putting the revenues toward improving the MIQ system. 

It's a dreadful mess and the government just seems to see no reason to fix it. 

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