Sobering survey

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By TRACEY ROXBURGH

Almost a third of Queenstown CBD businesses don’t expect to survive till winter, a new survey shows.

Last month’s Queenstown Chamber of Commerce-led business confidence survey attracted 241 responses from Whakatipu businesses — 187 of those in or near Queenstown’s CBD.

While the impacts of the tourism downturn aren’t being  felt as harshly in Arrowtown and Frankton — where 97% of respondents expect to still be operating in three months’ time — the outlook for the town centre’s bleak, particularly for the tourism and hospitality sector, which includes accommodation.

 

 

 

 

 

 

Eighty-five per cent of that industry, across the Whakatipu, expects activity and profit to decrease in the next three months, more than half expect staffing and hours to reduce, and 36% expect to see prices drop.

The survey found businesses’ view for the future for the region ‘‘contrasted significantly’’ with their view for New Zealand.

Almost 75% of all respondents consider the outlook for the rest of the country will stay the same, or get better.

Queenstown Chamber boss Ruth Stokes says while she’s not surprised, businesses’ view of  how much better ‘NZ Inc’ is doing is the ‘‘most heart-wrenching piece’’.

‘‘One of the really good things, though, is actually having some thing quantifiable, rather  than just anecdotal, particularly around the differences [in] how effects are being felt  across the region.

‘‘We need to be talking about this as a team.

‘‘What do we do with this information?’’

Govt expectations ‘definition of insanity’

Stokes says she’s ‘‘endeavouring’’ to get some time with Tourism Minister Stuart Nash,  due in Queenstown this month, along with some of the Whakatipu’s ‘‘key business leaders’’.

‘‘The advice I’ve been given is to go down the regional development track.

‘‘It’s almost like we need to stop banging on about tourism.

‘‘It’s the ‘investment for the future’ story [Nash wants to hear].’’

Making that difficult, though, is the hesitation banks have at the moment to loan to new, or existing, businesses in industries which have been brought to their knees by the effects of closed borders.

It’s understood the term ‘‘red zone’’ has been applied to Queenstown by banks for lending.

But Queenstown economist Benje Patterson says ‘‘most certainly’’ there won’t be a concept of a red zone across all banks when it comes to the Whakatipu.

That, Patterson says, ‘‘would ultimately be collusion in the banking system’’.

Most banks, however, will be looking ‘‘very unfavourably at loaning to new business’’, particularly those in industries with decreased revenue flow at present, like hospitality, tourism activities and accommodation.

A similar consideration, he says, will be given for banks when they’re looking to extend loan facilities to existing businesses.

‘‘Basically where that leads to is that, yep, most banks, if not all the banks are going to be, effectively, not lending to many types of businesses in the local area.

‘‘The unfortunate reality is that until the banks feel assured that these businesses are going to have significant revenue streams again it’s very, very difficult for them to lend out at all.

‘‘When you’re looking at the types of businesses that are going to struggle at the present  time to get bank funding, unfortunately, it is quite a depressing situation.’’

Stokes believes if the government changed its policy settings ‘‘it would make a massive difference’’.

‘‘It’s the sort of thing we need to be putting on the table.

‘‘Changing policy settings for commercial lending, for example, to enable those to be able to get out without losing their shirts and those who want to get in to do so.

‘‘We’re a year down the track.

‘‘We can’t have the district, or the region, be doing the same thing and the government expecting a different result.

‘‘That’s the definition of insanity.

‘‘We need to go to the government as businesses and say, ‘this is what business is doing to help itself, but this is what you need to do to help it help itself’.’’

tracey.roxburgh@scene.co.nz