11 Mar 2021

Third of Queenstown businesses may be gone by winter

From Checkpoint, 5:27 pm on 11 March 2021

Nearly a third of businesses in Queenstown's CBD expect to be gone by winter, a new survey has found.

The survey by the town's chamber of commerce paints a grim picture of business confidence in the region. In the Queenstown Lakes area about 70 percent of businesses are expecting a drop in profits.

Queenstown Chamber of Commerce chief executive Ruth Stokes told Checkpoint the data was not a surprise, but just confirmed what she had been hearing anecdotally.

"Business is telling us it's really hard out there, even those that are actually doing well are struggling to find skilled staff, but tourism and hospitality - particularly the CBD in Queenstown - they've had it hard for the last three months and they're just expecting it to get even harder in the next three months, particularly without any coming government support.

"The business community has been working really hard to help itself and help each other. We have four key things that we really need the government support with.

"One is to help us with private sector development that's already planned, to help us diversify our economy, and really just enable us to leverage the investment that's out there, and spread the love.

"We need our immigration settings looked at, we had that precedent with the Christchurch earthquakes. We need to have skilled labour here. We also need labour that's going to support our services sector, but we need labour that will support our construction sector.

"We also need to look at enabling international investment here… We also need to support domestic investment. Banks aren't lending to tourism or hospitality without any certainty.

"We know that there is a government-backed lending package out there, but it is subject to bank lending criteria. And at the moment, understandably, they're really not wanting to go near us."

Stokes said businesses are looking forward to talking face to face with Tourism Minister later in March.

"We would actually like to hear him speak a lot more positively around, tourism. He does have a portfolio for regional economic development, and we have a lot going on here in the district that's not just tourism, and it's also come through strongly in the survey.

"We're hearing about tourism needing to pivot… Pivot, halo effect, collaborate, partnership – we've done everything over the years, whether it's been the GFC. people have really looked hard at their businesses.

"But when it comes to international tourists, it's just a numbers game. And the tap was turned off for people.

"People thought… Australians were going to be coming late last year, and then it was first quarter and now it's who knows. People have pivoted as much as they can."

Tourism Minister responds

In response, Tourism Minister Stuart Nash said domestic tourism spending over summer in the Queenstown region was up at least 56 percent compared to the year before.

"Kiwis are getting around, they area spending money in tourist hotspots, they are going to cafes and restaurants and they are buying tickets to attractions.

"Obviously the increase in domestic speed has not made up for the international speed.  

"We are working incredibly hard on a trans-Tasman bubble. And we have been for quite a while now. It's not simply a matter of just opening the borders and away you go.

"At any one time, certainly pre-Covid-19 levels there are 11,000 people coming across the Tasman both ways. So there's some significant logistical issues that need to be sorted, but we're working on those.

"There are only two states in Australia that don't require us to go into quarantine, so it's not quite as open as you may be led to believe.

"The government is working very closely with the Australian Federal Government, and with our own agencies to come up with a plan that would allow a trans-Tasman bubble to work."

However, Nash could not provide a date for when quarantine-free travel across the Tasman could happen.

He also expressed concern about incidences of businesses taking on a lot of debt.

"I need to be honest with tourism businesses, and as Ruth said beforehand I've always been clear that the government cannot save every business, but we are working on a package that I believe will meet a number of the criteria Ruth was talking about."

Meanwhile on the West Coast, four Scenic hotels at Fox Glacier and Franz Josef Glacier are being closed.

"We find it really interesting that we have a Minister of Tourism who is also the Minister of Small Business and he seems to be quite happy to throw everybody under the bus along the West Coast, instead of actually trying to support them and go and lobby for them," Managing director Brendan Taylor said.

But Nash said Taylor is "absolutely not" right.

"Fox guides and Franz Josef guides both received $500,000 in [Strategic Asset Protection] grants and they're both eligible to take up STAP loans.

"We've spent about $8 million down the coast on STAP grants and loans.

"We've spent about a quarter of a billion dollars in infrastructure projects, there's a whole lot of jobs and jobs in nature, a whole lot of companies have taken up the small business cashflow loan scheme and the regional business partner network funding.

"We have done a lot down the coast, and the other thing I've pushed hard on and I'm a little bit disappointed with, but the West Coast economic development agency down there - Development West Coast - has a fund of $128 million."