How prepared are businesses for a potential Omicron outbreak?

Thursday, 23 December 2021

As the number of cases of the Omicron variant of Covid-19 in MIQ continues to rise, business owners are putting contingency plans in place in case an outbreak occurs.

Last week Covid-19 Minister Chris Hipkins said the Government would not institute an immediate lockdown if the variant was found in the community. But it has pushed back plans to allow people to travel across the Tasman without MIQ.

Epidemiologist Professor Michael Baker says it is only a matter of time before Omicron finds its way into the community and it could have a greater impact on businesses than previous variants.

Professor Michael Baker says with its rapid spread through communities, Omicron has the potential to be even more disruptive to business and the health sector than the Delta strain.

“The biggest problem we see overseas with Omicron is that it spreads so rapidly, it is very disruptive. One of the ways it is disruptive is it causes a lot of people to have to take time off work which may create some real business continuity problems, as well as on our healthcare system as workers have to take time off.

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Chris Roberts chief executive of Tourism Industry Aotearoa says accommodation providers are ready to help.

“I don’t think anyone should regard it as benign at all,” Baker says.

Chris Roberts chief executive of Tourism Industry Aotearoa, says tourism operators are preparing for the potential of a Covid-19 outbreak – of any variant – among staff or visitors over the holiday break.

Roberts says some accommodation providers are preparing to provide isolation facilities for guests who test positive while they are on holiday.

Greg Harford, chief executive of Retail NZ, says businesses are already working in bubbles.

“District health boards only have a limited number of facilities, and it may be impractical for the guests to travel home. Holidaymakers can be assured that holiday parks, hotels, motels and others will work under the guidance of their local public health units if they have to deal with an outbreak,” Roberts says.

Roberts says holiday parks in places like Queenstown, Nelson and Taupō that are relatively far from major medical infrastructure are creating separate areas where guests who test positive can be housed if necessary.

Kirk Hope, chief executive of Business New Zealand, says while the SME sector has seen an increase in sales in the last month, a closed border is still a major hurdle.

Hotels were considering their options of asking guests who tested positive to remain in their rooms and providing contactless room service.

Tourism providers had been advised to work closely with their local public health units in the event of an outbreak, Roberts said.

Greg Harford, chief executive of Retail NZ says businesses in the retail sector have contingency plans in place should staff get sick, or if the shop becomes a location of interest.

Self-isolation for travellers coming from Australia has been pushed back from mid January to the end of February.

“Businesses already have teams working in bubbles, or planning alternative staffing arrangements if their normal employees were not able to come into work. They are effectively planning the ins and outs of what continuing to operate in the traffic light system looks like,” Harford says.

Harford says the retail community was happy to hear Hipkins say the Government’s intention was to manage the virus with the traffic light system but some retailers are still worried about the prospect of localised lockdowns in future – Hipkins has indicated they are possible in a significant outbreak.

“We have got this framework in place, our view is we need to use this framework before going back to any plan b. We have moved beyond elimination and into the traffic light system. That is the way to allow consumers and business owners to operate with confidence,” Harford says.

Brad Olsen, principal economist at Infometrics says the real test for businesses will be how consumers react to remaining open under the traffic light system while Covid was in the community.

Kirk Hope, chief executive of Business New Zealand, says while Omicron is a concern, the signs are pointing to robust outlook, particularly in the SME sector.

Hope pointed to data from Xero which showed SME sales grew 15.8 per cent in November.

This was led by construction, retail and manufacturing which all grew sales by almost 20 per cent in the month.

But Hope said the extension of MIQ caused by Omicron was a problem for some.

“Those businesses who will see the most impact are those who are trying to sell offshore, or establish new markets, that will be tough. Another impact of the border closure are the straight out labour shortages right across the country in a variety of industries,” Hope says.

Brad Olsen, principal economist at Infometrics, says there is still uncertainty around whether a lockdown is possible.

“We are ourselves still nervous about what the response might be if we not only had an Omicron outbreak, but we also started to see the health system become overwhelmed. That likely would trigger restrictions which would be a greater challenge for businesses,” Olsen says.

Olsen says there are still large questions around how the Government would support those sections of the economy in “red” under the traffic light system. Much of the support that was available under the alert levels has been phased out.

“The real challenge of 2022 is how New Zealanders respond to having Covid in the community.

“Unlike other parts of the world like the US, UK and Australia, New Zealand has not had that experience of having a large amount of cases out and about in the community.

“With consumer confidence still relatively low, our expectation that if we saw an outbreak there will be some people who will not feel comfortable going out if Covid is in the community. That lower level of economic activity could well limit what happens in 2022,” Olsen says.