Report finds 50% of businesses in Bega Valley lack confidence in the viability of their business
The impacts of the Victorian border closure over Summer 20/21 have been felt far and wide across the Sapphire Coast region, with the findings of a Business Survey Report released this week showing businesses are still reeling after multiple shutdowns.
“Of perhaps most concern is that 50% of the businesses surveyed were lacking confidence in the viability of their business operations for 2021,” said Anthony Osborne, Managing Director for Sapphire Coast Destination Marketing.
“Our region indeed took a big blow over the Summer. Many businesses were already trying to climb out of holes created by the bushfires that devastated us over the previous summer, along with the impacts of the Covid-19 pandemic and subsequent drop in visitation during 2020.
“The hard closure of the Victorian border saw businesses scrambling, with concerning impacts on turnover, staffing and threats to livelihood,” Anthony continued.
Local food and beverage business owner, Peter Caldwell, Director of Longstocking Brewery in Pambula, took part in the survey and revealed just how bad the impacts were on his and other local businesses.
“Whilst I wholeheartedly supported the border closures if there was a risk of Covid-19 not being managed in NSW, or having an impact on our Victorian cousins after already suffering through lockdown, the impact on us was dramatic.
“We had just had four days of excellent sales when the Victorian border closed. We had 130 people booked in of which just seven turned up. We tried to re-book people but were unable to, and as a consequence had to lay off staff.
“It was just so ironic that this happened on the exact same day as the fire threats over last summer. It brought back all of the emotion into it. We just went into fight or flight mode. But we survived, we’re still here and the locals have been enormously supportive. Despite it being very challenging, we are all in it together,” Peter said.
The Bega Valley Business Survey Report, commissioned by Bega Valley Shire Council, Sapphire Coast Destination Marketing and Destination Southern New South Wales, was an online survey made available to businesses across the Bega Valley to assist in understanding the recent impacts of the hard closure of the Victorian border from 31 December 2020, to 11 January 2021 due to the Covid-19 Pandemic. 177 people participated in the survey which was designed and administered by an independent consultant.
“Traditionally, the January to March period accounts for approximately 32% of yearly visitation to the Bega Valley. And the total revenue for December/January is estimated to be $75 million,” Anthony continued.
The report findings showed on average it was estimated that business lost 46% in annual turnover by the closure of the NSW/Victorian border. 81 businesses (54%) had to reduce their staffing levels with 53 full-time staff and 218 part-time laid off during this period.
Although 49 accommodation businesses received new bookings during this period from Sydney and Canberra, 62% did not experience any turnover recovery during the Victorian border closure period.
Bega Valley Shire Mayor Russell Fitzpatrick said the survey’s findings do paint a stark picture.
“After seeing our much-needed tourists leave the shire in droves on New Year’s Eve two years in row, it’s not surprising our businesses are struggling,” Cr Fitzpatrick said.
“Through Sapphire Coast Destination Marketing, as well as the Bega Valley Business Support Group and our ongoing advocacy with the state and federal governments, Council is committed to supporting our local businesses throughout this tough time.
“This is a really stressful time for business owners, and I’d encourage anyone who needs support to reach out to the Bega Valley Business Support Group,” Cr Fitzpatrick concluded.
A partial summary of the key findings of the Bega Valley Business Survey Report is provided below as further background, and the full summary can also be found online https://www.sapphirecoast.com.au/bega-valley-business-survey-report-final-010221-summary/ Key Findings
This survey has confirmed there were significant consequences of the hard closure of the Victorian border and that the period 31 December to 11 January is extremely important to local businesses across the Bega Valley, particularly tourism businesses.
Traditionally, the January to March period accounts for approximately 32% of yearly visitation to the Bega Valley. The total revenue for December/January is estimated to be $75 million. Key findings of the NSW Business Chamber Survey of Bushfire Impacts for Southern NSW (February 2020) found 72% of businesses indicated the bushfires had a significant impact on their businesses, with a further 19% experiencing a moderate impact. Average revenue lost from the 2019/20 busfires = 31%. The estimated loss economic impact of the 2019/2020 bushfire was estimated to be $53 million with an extended economic impact to the Bega Valley economy of $91 million[1].
Overall comments
· Overall, participant comments were extremely powerful and reflect the considerable impact and consequent stress of the border closure and previous year’s bushfires to local businesses.
· Many participants identified the need for support agencies to recognise the cumulative impacts of disasters to businesses over recent years from fires, Covid-19 pandemic, Victorian border closure, with some specifically referring to stress and the need for further support including small business grants.
· Labour shortages and lack of employment opportunities were also identified as a consequence of disasters in the area
· Many also called for a national or coordinated approach to border restrictions rather than the hard approach applied on December 31 by the Victorian Government, particularly given the regional area had limited risk
· Others identified ideas to help recovery including with many calling for more promotion of the area and greater support for marketing of the Bega Valley within NSW marketing initiatives
· New infrastructure and product development was proposed as a way to make Merimbula and Bermagui more appealing in the longer-term.
Importance of the 31 December to 11 January period
· Overall, 90% of businesses stated this period is extremely (70%) or very important (20%) to local business
· 100% of accommodation and food and beverage business stated ‘extremely important’ or ‘very important’ as did 94% of retail businesses
· 70% of businesses make a significant part of their annual turnover during this period - 35% make 21 to 40%, 19% make 41 to 60%, 13% make 61 to 80%, and 3% make 81 to 100% of their annual turnover during this period.
· 29% make 0 to 20% of their annual turnover during this period.
Victorian border closure impacts
· 77% of businesses were significantly impacted - ‘a great deal’ (49%), ‘a lot’ (28%) and a ‘moderate amount (16%) by the closure of the Victorian border
· 79% of accommodation, 93% of food and beverage and 94% retail business were impacted ‘a great deal’ and ‘a lot’
· Only 5% were impacted ‘a little’ and 2% ‘not at all’
· On average, it was estimated that business lost 46% in annual turnover by the closure of the border – i.e. 40% (21 to 40% loss), (16% = 41 to 60% loss), 11% (61 to 80% loss) and 4% (81 to 100% loss) and 29% experienced (0 to 20% loss) (Mean = 2.2 - 45.5%)
· 81 businesses (54%) had to reduce their staffing levels during this period due to the closure of the border
· 53 full-time staff and 218 part-time staff were laid off during this period – these were mainly from food and beverage businesses (24), retail businesses (23), accommodation businesses (18) and tourism attractions (6).
Business recovery
· 94 businesses (62%) did not experience any turnover recovery during the Victorian border closure period
· 58 businesses (38%) experienced some recovery, however this was mainly less than 20% – i.e. 46% (0-10%) and 32% (10 to 20%).
Accommodation business recovery
· 49 accommodation businesses received new bookings – 69% from Canberra, 53% from Sydney and 47% from regional NSW
· The majority of accommodation businesses (86%) claimed they normally achieve 91 to 100% occupancy during the 31 December to 11 January period
· No accommodation businesses achieved 91 to 100% occupancy due to the Victorian border closure
· 63% achieved less than 59% occupancy with only 8% achieving 90 to 99%, 14% achieving 80 to 89%, 6% achieving 70 to 79%, and 8% achieving 60 to 69%
· 55% of accommodation businesses (27) reduced their accommodation rates to achieve new bookings for the 31 December to 11 January period
· 67% of these accommodation businesses reduced their accommodation rates by up to 40%, 19% (41 to 50%) and 15% (more than 50%).
2019/20 bushfire business impacts
· 96% of all businesses stated they had been previously impacted by the 2019/2020 bushfires for the same period
· 57% of business reported more than 40% loss for the same period in the previous year, 28% (21 to 40% loss), 27% (41 to 50% loss), 29% (more than 50% loss), 13% (11 to 20% loss) and 2% (0 to 10% loss).
Future business confidence
· On average, most participants were neither confident or not confident (average 51 on 100 point scale) about the viability of their business operation for 2021
· Around the same response (average 47 on 100 point scale) was estimated for improvement in business turnover for 2021.
Business recovery support
· The need for more government and financial support, tax relief and on-going wage assistance were identified as key areas for support
· Many also called for the borders to be left open and a more considered/coordinated approach to border restrictions into the future
· Others asked for more support for business development and the need for business confidence and certainty. This included support from Council for local businesses and improvements in town amenity to make destinations more appealing to visitors
· The need for more marketing and promotional campaigns, particularly into visitor markets other than Victoria was identified by many participants.
