Lockdown losses, not a four-week fix

There is no doubting the lockdown is affecting Wānaka businesses- and not just those in the tourism industry, but right across the board.

Naomi Lindsay of Ignite Wānaka said:” We do know that businesses will be disrupted hugely. We have already said there is no sugar coating this; it is an economical, as well as health, emergency.”

Wanaka was within Otago for all Ministry of Business, Innovation and Employment (MBIE) stats so Ignite had no accurate number on how many businesses were actually in Wānaka. 

Along with Lake Wānaka Tourism(LWT), Ignite would start to check in with businesses, “but that will take time and won't be 100 per cent accurate as it's based on our lists/databases and won’t include non-commercial ratepayers,” Lindsay said.

“We also can't predict the loss of revenue for private businesses as this information is confidential to them. Only a month or so later will we get spend-stats- so we will get February's soon, then March and April later.”

“MBIE carries all the local data and they can track the reduction in salaries paid etc. per location. So again, retrospective data.”

The closure of most businesses for a month has raised the issue of how much rent commercial tenants should have to carry on paying.

Queenstown Lakes District Mayor Jim Boult is encouraging all landlords to consider rent holidays or reductions.

"I spoke with one major commercial tenant (last) Monday who expressed that they’d rather give a break to their tenants and allow them to continue without paying rent on the basis they can start their business again and go forward," he said.

Otago Property Investors Association president Kathryn Seque said that while she accepted the importance of conversations between landlords and tenants, and negotiations to avert businesses from "going under", there was the issue of the government-imposed rent freeze to consider.

While the freeze would not prevent landlords reducing rents, landlords were concerned the reduced rents for the lockdown period might become the "new rent for the rent freeze" and the rent freeze "may go on for over a year", Seque said.

The association of 1000 members had yet to receive clarification from the government.

Landlords had their businesses to take care of, Seque said.

They were not entitled to the mortgage holiday granted to some homeowners, and she advised her members to speak to their banks before making decisions about rent.

Property owner Alan Dippie, who had tenants whose businesses were considered essential as well as others that had closed down, said it was "a matter of working through each situation individually". One of the unknown factors, he said, was how long each business would be affected.

Those in the health sector would not be affected at all, some would be affected for a month, but others, like those in the tourism industry, could be affected for many more months.

Wānaka commercial property owner Gavin Humphrey said he was aware of the pain that retail businesses were experiencing. Many landlords had given rental relief to tenants to see them survive during this period. 

“This leads me to the question of council rates and specifically the tourism levy aspect of the commercial notice. This levy goes to LWT to promote Wānaka to tourists both domestically and internationally. My question is, with no international arrivals and little domestic potential, what are tenants paying for?” 

With NZ in strict lockdown and movement control order, coronavirus will probably be contained quicker here than the main international tourist markets, he said. Global border control will not be able to loosen until those countries have contained their outbreaks.

“Think of Australia’s woeful response, similar to the US, and you conclude that Australian tourist arrivals could close until a vaccine is distributed. This is not a four-week fix. Your main tourist markets could be heavily restricted or closed for twelve months or more.”

 Humphrey believed the levy and LWT should be suspended immediately.

“This is also a good time for local businesses to debate the future of LWT. Tourism will not be the same on the other side of this event. Perhaps you could use a large public relations agency to do a better job for fewer costs. Salary, vehicle, travel and accommodation make up most of the LWT costs.”

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