Bryce Heard: Rotorua Chamber of Commerce chief executive on Covid 19's bite

Rotorua Chamber of Commerce chief executive Bryce Heard. Photo / Andrew Warner

OPINION

As we begin our third year of threatened pandemic, many of us are thinking that the worst economic impacts are over, and we are on the recovery trail. From an economic standpoint, this is seriously mistaken. Lag times between actions and economic impacts can be deceptive.

For these reasons, 2022 is the most uncertain year to forecast that I can remember, in my long business career. The only certainties seem to be gross uncertainty itself, coupled with the highest fear level among the general populace, in recent memory. Neither of these is conducive to healthy business, growth, investment, or prosperity.

The media is full of pandemic predictions of mass infection, hospitalisation, and mortality expectations. While the pandemic itself cannot and must not, be underestimated, the predictions to date have proved to be in error - invariably on the side of pessimism.

Hopefully, we will continue to exceed expectations. Whether this pessimism is driven by the media highlighting the worst-case scenarios; by the modellers' own conservatism, or by better-than-expected public compliance; is hard to ascertain. Either way, it seems timely to place some trust and self-responsibility in the team of 5 million, before it is too late for many businesses.

It might already be too late for many of the forgotten casualties of Covid. I refer to the tourism, hospitality, events, travel and even parts of the retail sector, to name a few.

In the early stages of Covid, predictions of unemployment, economic stagnation and job losses drove the Government to invest heavily in things like wage subsidies and business support packages. As time passed by the enthusiasm for this support by Government has dwindled, but perversely, the need for it by some has grown. No doubt there were those who got Government support that did not need it, but at the time it seemed like a good idea.

The impact on tourism was initially focused on those businesses who were exposed to international tourism. This was okay because for a while it seemed that the growth in domestic tourism – driven by those who could no longer travel overseas – was compensating for much of the lost international trade. But that is no longer the case.

On the contrary, the advent of the red traffic light system coupled with the stream of pessimistic forecasts has now combined to convince domestic tourists to stay at home. Currently, most tourism is stagnant, with patronisation well below both last year and 2020. Many are below break-even levels. This is driven by customer fear and is spilling over to the support businesses like restaurants, accommodation, travel, cafes and even some retail.

Add in the emergence of inflation suddenly leaping to 6 per cent and rising (all that Government spending coming home to roost?) and the inevitability of interest rates rapidly lifting to well in excess of the inflation rate, and the outlook is not so bright - especially for anyone thinking about borrowing to invest and grow their businesses.

If we continue to highlight skewed employment figures and inflationary economic growth and allow the suffering industries to be swept under the carpet, we will very soon see iconic tourism, hospitality, travel, and events businesses going under. Many of them are presently operating in loss situations that are not sustainable.

Three things need to happen quickly if we are to arrest the issue.

The first is for people to get over the fear factor and get out and live our lives. Take the necessary Ministry of Health precautions, get triple vaxxed, wear your masks, scan in, wash your hands, do your social distancing, but above all - support your local businesses.

The second is for the media and the authorities to report on facts and limit speculative "worst-case scenario" forecasting.

The final leg of the treble is for Government to put some faith in the team of 5 million, relax the red traffic light rules and bring back some selective support packages for those industries at the coal face of the tourism and worst-hit sectors. If this does not happen with urgency, many will fail this year.

We at the Chamber welcome your feedback to help us to help you.

• Bryce Heard is chief executive of the Rotorua Chamber of Commerce