Struggling accommodation providers call for targeted government help, MP calls for landlord's support

Friday, 17 September 2021

Century Park Motor Lodge owner Stacie Warren said advice and support was being given in “blanket statements” for all types of businesses, but targeted support was needed.

Accommodation providers struggling with high fixed costs and little income are calling for more concrete support, after a “heated” Zoom meeting with local representatives left them feeling unheard.

While the resurgence payment, a lump-sum $3500 offered for businesses to support their fixed costs, has been tipped to continue as more than a one-off, and rates arrangements are on the table, business owners say these gestures don’t go far enough to cover monthly bills that measure in the tens of thousands.

Stacie Warren, who owns the Century Park Motor Lodge with her husband, said it felt like their concerns were “falling on deaf ears”.

“They’re just scripted. I don’t know how else to put it, they all have exactly the same answers.”

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Warren and several other accommodation providers organised a Zoom call with Nelson MP Rachel Boyack and deputy mayors from both Nelson and Tasman this week, calling for more support. But she said she was left “disappointed”.

“The businesses in Nelson actually need to know that [representatives] are backing us,” Warren said.

She said the meeting got “a little bit heated” towards the end, but frustrations were bubbling up for business owners.

“Why are we begging them to help us, why aren’t they coming to us to offer us help?

“They’ve said we’re the same as a mum and dad lawn-mowing business that has no overheads.

“We don’t fit in that same box … they need to hear that these bills are massive, and we’ve got no income.”

A particular sticking point was that this time around businesses needed to prove that they had a 40 per cent reduction in income that was linked to the Auckland lockdown. Since most bookings are now made with email addresses and cell-phone numbers, rather than postal addresses, Warren said it was almost impossible to prove a connection.

“What do they want us to do? Now we need to say ‘John Smith isn’t coming because of the Auckland lockdown’ – how?”

She said business owners had been encouraged to go to their representative bodies, like Hospitality NZ and the Chamber of Commerce, but this advice was not particularly helpful.

While some businesses were able to operate under Delta level two restrictions, Warren said it was difficult for accommodation providers as people didn’t want to stray too far from home.

“We’ve already been to them, they’ve already been to [Minister of Finance] Grant Robertson, and he’s already ignored us. I don't know what we do now.

“What cost, what losses, have these MPs had personally? Because we’re all watching money literally going down the drain. Have any of them taken pay cuts? Have any of them said, ‘let’s the share the pain’? It’s just businesses that have taken the hit. We’re the sacrificial lamb.”

Boyack admitted that there was no way for the Government to fund all business shortfalls, but subsidies would be available on an ongoing basis.

“We have outlined that the resurgence support payment will be continuing, that is no longer a one-off payment.

Nelson MP Rachel Boyack said she was “definitely in their corner” when it came to business owners, but said the Government could not “cover 100 per cent” of every business’ costs.

“We’re not going to be able to cover everyone’s costs. If we were to cover 100 per cent of business costs across the country, that would be an enormous amount … [but] our goal is to keep people connected into their employment.”

She said the lack of support from commercial landlords to cut “the biggest fixed cost people have” was frustrating.

“I’m calling on commercial landlords to step up here. It is frustrating to me to hear that a lot of commercial landlords aren’t offering rent reductions through this lockdown, that in my view would be the single biggest factor for these business-owners. Many of them are in a position where they can come up with a reduced rent offering.”

She said to that end, she was pushing for changes to commercial lease legislation that had been floated earlier.

“It is something that I’ve been bringing up to colleagues – and that comes back to that biggest cost for businesses in the sector.

“Some commercial leases actually have a clause written into them that requires a rent reduction in these circumstances. Not all do. What was proposed last year was to put this into legislation.”

Deputy mayor of Nelson Judene Edgar, who also joined the call with the accommodation providers and Boyack, said her understanding from the meeting was that while businesses were appreciative of the wage subsidy, “wages are only about eight to 15 per cent of costs”.

“Some of their biggest costs were electricity, listed as number one, insurance was number two … and number three was leases. Landlords are simply not incentivised for any reductions.”

Edgar said business owners also noted while they paid insurance it did not cover them for loss of income in a pandemic.

In terms of the council perspective, she said that while there did not appear to be any specific requests for the council from the meeting, rates payment schemes were in place for people to apply for if they needed it.

“It’s very confidential – this is their financial information – so they don’t want governance involved in that, but absolutely get in touch with our rating staff.”

She said Nelson City Council had options available including payment plans, rather than big lump-sum payments, or even deferrals to a later date.

“People have nothing in the tank this time, that’s the overarching thing. A lot of reserves were used up last time; that’s financial reserves, but it’s also emotional reserves, and that’s really hard to replenish.”