In early April, the combined HUB agencies distributed a business insights survey through their combined networks.
The survey was commissioned to provide some 'real' insights into what was happening in our business community in terms of Covid-19.
Over 530 businesses completed the survey, with a good cross-section from all over the district, all sectors, different size businesses and different tenure (from startups to very established firms).
The responses showed that on average, those surveyed had recorded slightly better revenue conditions for the 2019/20 summer than the previous year, however they predicted revenue for the March-May 2020 period would be significantly reduced as shown on the chart below. When looking further ahead, the respondents indicated higher confidence in the long term scenario, but still concerning with the average response indicating a significant reduction in revenue for the full financial year.
When asked to disclose the immediate financial priorities for the business, continuing to pay staff was the highest priority, closely followed by continuing to pay core operational expenses. It was pleasing, therefore, to see that 88% of respondents had applied for the Government wage subsidy.
Other summary findings include; - 67% of respondents had closed temporarily for Level 4 lockdown, and 31% had reduced staff hours accordingly. Many respondents had staff doing little or no work, but were honouring the 80% of wages commitment. - 28% of respondents had altered their product or service to adapt to the Level 4 conditions, and 36% had sought rent relief from their landlord. - 5.7% of respondents had sadly made some staff redundant, with over 20 redundancies recorded, and 4 respondents had closed permanently. The majority of the redundancies were in the tourism and hospitality sector. - 30% had accessed personal funds/assets to support business operational expenses, yet only 17% had sought a short term credit facility from their bank. - 36% had prepared a business continuity plan, and 23% had sought independent business advice from a trusted advisor. - 75% of respondents had accessed free information and advice through the Hub Agencies and/or other reputable information sources.
Looking ahead, the respondents were moderately confident that their business was well placed to recover swiftly from the impacts of the lockdown once trading resumes normal conditions. The majority of respondents weren’t planning on making any drastic changes to their business model or structure like staffing, distribution, customer base, etc). Of those who were planning to make significant changes, the respondents were mostly in the tourism sector.
Respondents were asked a number of open answer questions.
In response to being asked about what plans the business owners/managers had in place to facilitate business recovery, the responses varied from seeking to diversify products and new markets, to changing marketing strategies and channels, to significantly reducing costs and operations to effectively hibernate the business during lockdown. Many were awaiting confirmation of what levels 3 and 2 would look like before addressing their future business plans, whilst others were developing new strategies and business models.
When asked if there were other topics or areas where further advice or information was required, common themes were marketing, financial advice and planning, advocating to Council for a reduction in rates/fees, support to negotiate with landlords, and information on how businesses need to adapt as we move through the C19 alert levels.
Finally, we asked if respondents had anything else they’d like to share to help us frame up the economic recovery plan for the Taupo District. There were recurring themes in terms of attracting the domestic market to the district, and commentary on the impact of AirBnB on the traditional accommodation sector. Requests to show confidence and leadership to adapt to a new world, and numerous calls for a ‘shop local’ campaign. Many respondents were complimentary about the support and information provided to date.
We are now using this insight to inform our immediate and longer-term actions to support our business community through Covid-19.
A repeat of this survey will be undertaken in May to monitor ongoing impact and issues as we move through the Covid-19 levels and recovery actions commence.