2 Mar 2021

Queenstown businesses prepare for further hardships

6:37 am on 2 March 2021

As Queenstown moves into its traditionally quietest time, businesses are preparing for more tough times ahead.

Queenstown in New Zealand, South Island

File photo. Photo: 123RF

The resort town remains one of the hardest hit areas in Aotearoa, with small businesses experiencing a more than 23 percent decline in year-on-year revenue in January, according to the latest Xero Small Business Insights.

The summer holidays brought a bit of energy and hope to Fergburger, but group general manager Stephen Bradley said many seemed to have chosen a trip to the beach over Lake Wakatipu.

"You can't replace 85 percent of international tourists. We might fluctuate any day between 80 percent down to maybe 60 percent down if there's an event on on a weekend. It's massive fluctuations," Bradley said.

About 130 staff were on the books at the start of summer, but that was now below 100.

"For many around town, natural attrition - those leaving have certainly not been replaced so our staffing numbers are now hitting lows that we haven't seen in the last five years," he said.

Bradley said he was trying to stay optimistic.

"It's challenging. It's a daunting road ahead. But we've all done it once."

Fergburger group general manager Stephen Bradley outside its Shotover Street store in Queenstown.

Fergburger group general manager Stephen Bradley. Photo: RNZ / Belinda McCammon

Haka Tours and ANZ Nature Tours general manager Eve Lawrence said they were expecting revenue to halve at Haka Lodge Queenstown.

That dropped closer to a 70 percent loss with summer failing to deliver its expected boost.

"We were forecasting to do not great but relatively well in terms of market. But I think what has been apparent is that people have been going to those more off-beat destinations. The revenue drop in Queenstown's been pretty huge and I think a lot of businesses have been hit quite hard," Lawrence said.

"It's just not been doing as well as we expected it to do over the summer holiday period."

However, she said they were in a better position than many smaller businesses.

"It wouldn't surprise me if we see quite an influx of liquidations or insolvencies over the next six months," she said.

Jobseeker benefit figures have risen from 122 in the December 2019 quarter to 569 in the December 2020 quarter.

Queenstown Chamber of Commerce chief executive Ruth Stokes said construction and innovation were going great guns while most tourism and hospitality were struggling.

"So whilst we're hearing from businesses that at worst are running at 10 percent. Some of them manage to get to about 40 percent, but still a long way away from the previous summer," she said.

"I liken the pandemic and Queenstown to one of those hurricanes that we see on the news in the United States where you see a swathe of devastation. But you also see houses and people that are miraculously untouched. That's really what we've experienced here."

The Rees Hotel's chief executive, Mark Rose, said you could now walk down the street and see virtually noone.

After a dreadful Christmas Day, his bookings started ramping up and even reached 90 percent occupancy until New Year's Eve.

"The issue with that was we sort of have to ramp up staff and when you flex up from 20 percent to 90 percent occupancy on the low staff numbers that we have, it can be quite hairy. We've gone from 115 staff to 43. There are difficulties when we've got to flex up in that way," he said.

Bookings were fairly reasonable for the next ten days, but then it fell off a cliff with only a few small reprieves.

Business was down 80 to 90 percent compared to previous financial year.

"I guess the hard part is how much milk do you buy? How many sheets do you have delivered? The dining room struggles a bit about getting the quantity of food right at times. But you know, those are all sorts of things that we've sort of become used to and we're just working through."

The downturn would have far reaching implications, he said.

"We've lost so many great people from Queenstown that I don't if we've got the staff numbers or the skill sets available on tap for us to be able to just gear up and open up to the world in one hit.

"I'm very keen on the border to Australia opening and I'm a believer that that's not too far away, and that will make a huge difference to me. I think I can get back to sort of 60 percent of where I was."

Munch Caterings owner-operator Ben Batterbury said his business was managing to tread water.

"We all live in a bit of hope cos we know what's possible. It's more of a life-support than it is a progression, and every time you think it's not working, something seems to happen fortunately just enough to keep it going," he said.

Queenstown businesses are holding out for a trans-Tasman bubble ahead of the winter ski season, saying the timing could be the difference between sinking and swimming for some.

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