Auckland CBD retail and hospitality has lost $770m to Covid

Author
Rahul Bhattarai, NZ Herald,
Publish Date
Fri, 17 Sep 2021, 6:52PM
Viv Beck, chief executive of the business group Heart of the City. (Photo / Alex Burton)
Viv Beck, chief executive of the business group Heart of the City. (Photo / Alex Burton)

Auckland CBD retail and hospitality has lost $770m to Covid

Author
Rahul Bhattarai, NZ Herald,
Publish Date
Fri, 17 Sep 2021, 6:52PM

The retail and hospitality sector within Auckland CBD has lost about $770 million in consumer spending since February 2020 says the business association, Heart of the City.

Chief executive Viv Beck said that equated to an average of $570,000 per business, with about $300m lost to the hospitality sector and $330m in the retail sector compared to 2019.

"Covid has dealt the city centre a real blow, and whilst it's not just a city centre issue, there is a disproportionate impact and there is much to lose."

Auckland has been in a hard lockdown since 11.59pm on August 17, and will be on level 4 at least until 11.59pm on Tuesday when the Government has made an in-principle agreement to shift to level 3.

But Beck said even if Auckland moved down levels next week both level 3 and the tougher Delta 2 restrictions could make many sectors not viable to operate including hospitality, events and the arts.

The Government has opened up a third round of the wage subsidy to support continued employment and last week announced a second round of the resurgence support payment for businesses that meet the eligibility criteria.

The resurgence support payment can be used by businesses to help pay their fixed costs while the wage subsidy must be passed on to employees.

Beck welcomed the second round of resurgence support payment but said more financial support was needed.

"Whilst the further round of resurgence payments is welcome, the coming months for many businesses will be untenable if more financial support is not put in place.

"Furthermore, if there isn't the investment now and businesses are left to fail, recovery will take longer and we'll risk having a lot more people dependent on the Government downstream," Beck said.

Heart of the City has asked Treasury to review a scheme that could provide a convenient, low-cost and easy-to-repay "overdraft facility" that is large enough to see a business through the pandemic, similar to a student loan, she said.

Businesses can already apply through the Inland Revenue for the small business cash flow loan scheme which gives them access to $10,000 plus $1800 per fulltime equivalent employee.

The loans are interest-free if paid off within two years of borrowing the money and borrowers have up to five years to pay it back.

Beck said it would also like to see Government and council staff lead the way and return to work as soon as safely possible.

"Getting people back to the city centre is critical and this would be a strong show of support to our businesses."

Beck said despite the challenges ahead she was confident in the future of the city centre.

"Investor confidence is high, with a range of developments underway both commercial and residential, and a number of new businesses choosing to locate here.

"But we have to accelerate other work to sort the immediate challenges out now," she added.

She said there were many initiatives underway to bring business to the city centre including events such as extending the Restaurant Month during summer.

"This includes outdoor dining extensions, an empty tenancy programme, a push to improve access to the city centre and incentivise people to get people back on public transport when they safely can, along with dealing with crime and antisocial behaviour."