Business owners have bounced back better than expected from Covid-19 lockdown. Photo / Getty Images
On March 25 last year the entire nation went into lockdown as New Zealand moved into alert level 4. Zoe Hunter talks to Rotorua's business community a year on and gets their perspective on the future.
The resilience and determination of Rotorua's business owners during a year of uncertainty since the Covid-19 lockdown has impressed the city's mayor.
But with the loss of international tourism Steve Chadwick fears some tourism businesses may not recover and she worried for young people and their future in the city.
Business leaders warn 2021 will be tough and the tourism industry needed urgent support to survive the months ahead.
Rotorua mayor Steve Chadwick said it had been an "extremely challenging" year.
"Many are feeling the loss of the international market acutely now and some may not be able to recover – that is the reality.
"Others have been able to innovate and adapt but there is still a lot of uncertainty and everyone is feeling the pain of business downturn and job losses. It affects the whole community."
Chadwick said there was still a long way to go.
"The biggest challenge has been the loss of the international visitors and the flow-on effect that has had on the wider community, and I am concerned how this will affect young people and what they see for their future here."
But Chadwick said the city had learned to work together in different ways.
"I have been impressed with the resilience and determination shown by our local business operators in the face of such adversity and the ongoing unknowns.
"Many innovated and found new ways to operate and some invested in new products and services to cater to the new world they face."
It was impossible to predict what the future holds, she said.
"We need to get the vaccination roll out right, and to open the border to Australia in a safe and well-managed way."
Rotorua Chamber of Commerce Bryce Heard said a year on since lockdown we were looking at a world that had changed "probably forever".
Heard said overall Rotorua had fared better than expected in some important areas but worse in others.
"Sectors like forestry, farming, building and horticulture are performing strongly. This comes off the back of both an early return to trading with major countries like China and Australia, and an aggressive infrastructure investment programme by both local and central government."
"However, businesses with high exposure to international tourism have taken a walloping."
Heard said travel, airlines and some of the city's international tourism featured among the hardest hit.
"Some are in urgent need of further support if they are to survive the months ahead."
The on again-off again lockdowns were devastating businesses and the long-discussed opening of an Australian/Pacific travel bubble will provide only partial relief, he said.
Meanwhile, Heard said retail, hospitality and most services seem to be scattered along the middle of the spectrum and there were still "massive opportunities" in new housing being missed.
Rotorua Economic Development interim chief executive officer Andrew Wilson said the past year has been a "real mixed bag" from an economic perspective.
Some businesses had suffered from a reduced visitor economy, while others involved in sectors like forestry and wood processing, manufacturing, construction, grocery and professional services were doing very well, he said.
"While the Covid-19 pandemic has created a challenging economic environment for many local businesses, Rotorua is fortunate to have one of New Zealand's most diverse economies to build on.
"Agriculture, forestry, wood processing, tourism, tertiary education, health and manufacturing are some of the major industries Rotorua can count on for long term economic stability of its businesses and residents.
"These industries also regularly attract new business ventures, highly skilled residents and international students to live, work, study and play in the destination."
Retail NZ chief executive Greg Harford said retail had changed a lot over the past year, including a "big jump" in online sales.
"We think total online sales have nearly doubled, and we have seen the emergence of a two-speed retail sector as some firms do well and others really struggle."
Harford said the initial lockdown and a yo-yoing between alert levels since August had been hugely challenging for retailers to navigate.
"Even though the Bay of Plenty was only locked down once, the ongoing and unpredictable lockdowns in Auckland have severely impacted retail spending in the Bay.
"That's because Aucklanders haven't been travelling, and because Bay residents have been a bit more cautious getting out and about while Auckland has been in lockdown."
A huge issue continues to be the supply chain, he said.
"There are lengthy delays getting product landed in New Zealand due to congestion at the ports, and this is causing real problems."
However, Harford said retailers had learned to innovate and drive change in their businesses quickly.
"We've seen retailers work hard to cater to the changing needs and wants of their customers, and this will continue."
The next year was going to be tough for retailers as the pressure comes on the economy, he said.
"We will see some outlets close, and we will see some retail businesses stop trading or reduce staff numbers over time.
"That's because it becomes harder and harder for some businesses to bounce back from each lockdown.
"Plus, there are significant and additional costs relating to employing people coming as a result of various changes the Government is making to employment law and the minimum wage."
Harford said prices would likely start to rise in the next 12 months on the back of increased freight and employment costs.
"Retailers operate in a highly competitive market, and will be working hard to minimise price increases, but it's not sustainable to hold prices when there are such big additional costs hitting retailers."
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