West Coast businesses hit hard to pandemic

The impact of the Covid-19 pandemic on the West Coast economy has been laid bare by Development West Coast in a frank survey, which shows businesses cutting staff numbers and others preparing to close.

Four out of 10 tourism operators say they are unsure if they can adapt to the shrunken tourism market, and six out of 10 businesses report a serious decline in revenue.

The data was gathered between April 18 and June 1 from about 200 businesses throughout the Coast.

* 62% said sales/revenue down 25% or more.
* 30% will have to reduce staff numbers over the next three months.
* 26% have already reduced their staffing levels
* 64% believe their business will survive and 26% are unsure.
* 5% have put their businesses into hibernation.
* 4% are either considering closing or have already closed.
* 96% of tourism and travel businesses report a major negative impact on their sales/revenue, compared to 48% for the rest of respondents.
* 45% of tourism and travel businesses have reduced staffing levels, compared to 18% of other businesses.

One respondent said: "We will survive but will have to borrow about $500,000 to get us through the next 12 months."

Another said: "We're going to come out stronger, it has forced us to make some tough business decisions that we needed regardless of Covid."

The biggest challenges currently facing West Coast businesses are reductions in sales/revenue, customer numbers and staff hours.

Over the next three months, 58% of businesses expect their sales/revenue will have dropped 25% or more.

Among those surveyed, businesses in the Westland district have been the most heavily impacted, with 75% reporting major negative financial impacts, compared to 51% in Grey and 50% in Buller.

In Buller, 32% have reduced staffing levels, 30% in Westland and 17% in Grey.

DWC chief executive Heath Milne said the survey was undertaken to gain a better understanding of the impact of the pandemic on the West Coast and how this had changed across various industries.

"These insights will enable us to target our support more appropriately to meet the needs of our business community. It will also allow us to provide an evidence-based overview of the situation to Government to advocate for further support for the Coast," Mr Milne said.

An earlier survey, right at the start of the lockdown, showed 50% of respondents reporting significant financial impacts; that has now risen to 62%.

"All sectors in our economy have been affected. However, businesses in tourism and travel have understandably been the hardest hit," Mr Milne said.

Of businesses heavily reliant on international visitors, 47% said they feel they can adapt to service an increasingly domestic market, while 42% are unsure.

One business which is already a popular domestic visitor activity, with pricing set at low margins to make it affordable for New Zealand families, was concerned about the increased emphasis on encouraging 'deals'.

The survey also found 86% of West Coast businesses had tapped into the Government's wage subsidy and leave schemes; 37% had followed the free business webinars; 23% accessed the Government's small business cashflow loan scheme; and 23% had received advice and support from DWC.

A common concern voiced in the survey was around when the wage subsidy runs out.

"Post-subsidy we have concerns about redundancies."

Another business said: "It's up to me. No more handouts. I will work this out."

Mr Milne said DWC staff had directly engaged with over 360 businesses over the past two months, and the survey results reinforced much of what staff were seeing on the ground.

During the last two months of the pandemic, DWC has delivered New Zealand Trade and Enterprise vouchers to about 70 businesses for professional services, worth about $140,000, to assist in managing the impacts of the pandemic.

DWC has also fast-tracked commercial finance of $1.75 million to 12 businesses.

"These aren't the only ways DWC can help. We are involved in a range of Covid-recovery initiatives and have a variety of support services that may suit your needs," Mr Milne said.

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