Michael LeRoy-Dyson runs Attic Backpackers in the CBD and has suffered a massive drop in revenue from the disappearance of international travellers. Photo / Supplied
Michael LeRoy-Dyson runs Attic Backpackers in the CBD and has suffered a massive drop in revenue from the disappearance of international travellers. Photo / Supplied
One in five Auckland small and medium businesses report they will not survive another lockdown, as CBD retail revenue dropped $19 million in the first week of lockdown two.
The Auckland Business Chamber has conducted a survey of the economic health of 1000 businesses during the city's current alert level 3 restrictions which relegates retail stores and hospitality establishments to delivery and pickup trade only.
The survey revealed 18 per cent of businesses indicated they could not survive a further lockdown, 28 per cent said they could manage just one more, and 24 per cent indicated two more.
Auckland Business Chamber chief executive Michael Barnett said the findings showed most businesses were reaching a point of no return if the city went into lockdown every time Covid-19 re-emerged.
"Lockdowns this severe are not sustainable, they are telling us," Barnett said.
"The effect reverberates beyond the region but across New Zealand, stifling attempts at economic revival and recovery."
Many of the businesses that responded said cashflow was their most crippling issue and they would need a grant to survive in the short term, and easier access to funding lifelines like wage subsidies to keep on employees.
Auckland Business Chamber chief executive Michael Barnett says the findings show most businesses are reaching a point of no return. Photo / File
Michael LeRoy-Dyson runs Attic Backpackers in the CBD and has suffered a massive drop in revenue from the disappearance of international travellers.
"When the first lockdown came and they closed the borders nearly all of our customers were international so we were humming along doing reasonably good, and boom, shut," LeRoy-Dyson said.
"Our occupancy went from 95 per cent to 40 per cent and then it slowly trickled down to 20 per cent as everyone slowly started getting repatriated. We'd pivot, we'd changed all of our booking, all of our marketing to domestic groups: schools, guys going to the rugby."
LeRoy-Dyson managed to grind the businesses occupancy up to around 15 per cent to 30 per cent before the second lockdown arrived and instantly erased that.
"I'm struggling to keep staff because it just feels like the business is dying. We were already dangling with a toe on the edge of the stool and this uncertainty just drags the stool away a little bit further," LeRoy-Dyson said.
"I'm trying my hardest not to close. But I have no idea how I'm going to pay my rent."
Attic backpackers on Wellesley St West was a viable business, with 95 per cent occupancy, before the lockdowns hit Auckland. Photo / Supplied
Cutting red tape to get the benefit of low and no-interest loans and other financial deferral schemes was another thing the Auckland businesses surveyed needed help with.
"Long term, though, business said handouts are not the solution to their sustainability," Barnett said.
"To build confidence, they need certainty. They want the game plan for how we all co-exist with the virus over the next 12 to 18 months, with economic wellbeing given a similar weighting to health outcomes."
This week Auckland Council's chief economist echoed ASB bank in projecting the city's second lockdown
It is estimated 23-27 per cent of Auckland's workers cannot do their jobs at alert level 3, which equates to about 210,000 to 248,000 workers unable to work.
Auckland CBD business association Heart of the City recorded a 74 per cent downturn in retail trade amounting to more than $19m in revenue for businesses the week beginning August 10.
Heart of the City chief executive Viv Beck said the stop/start nature of the city's lockdowns was "not sustainable" for businesses.
"The impact now on top of the last round is really severe. That [week] includes two days at level 1," Beck said.
"So that's a lot of money if you think about those businesses who have got people who basically clear out. That's a massive impact. We already had businesses at breaking point, and having to go into this so suddenly is definitely not a sustainable way forward. It's really crippling.
"Continuing with a level 3 across the whole region is going to have a massive toll so we want to see things get back. As soon as we can get back to a safe way of operating, the better."
The disastrous impact of Auckland's second-wave lockdown on retail spending was revealed this week in data released on the popular North Shore shopping precinct of Takapuna.
The Takapuna Beach Business Association released data that found retail spending for the week ending August 16 was down 64.4 per cent on the same week last year.
Takapuna Beach Business Association chief executive Terence Harpur pointed out the data became even more bleak when you realised the drop in retail spending was for a week in which only 4.5 of the days were actually under lockdown.
Barnett argued businesses should have more freedom than the current lockdown restrictions dictate to operate within their own staff bubbles.
"Shutdowns and blanket bans on certain sorts of enterprise are not the answer. Business must be allowed to operate and manage their own bubbles with a safe operating plan," Barnett said.
"It's Government's job to manage the borders and keep us safe by containing and stamping out any re-emergence rather than stamping out people's livelihoods and community wellbeing.
