HomeFEATURESBig shake, bigger loss: How Kaikoura retailers are coping

Big shake, bigger loss: How Kaikoura retailers are coping

Image source: Infometrics

The Government has also announced the business support package will now be available to businesses in Hanmer Springs and the wider Hurunui District which can show a sudden, large and sustained drop in revenue following the November earthquake.

“Cabinet has set aside $5 million more for the package overall in addition to the $7.5 million originally allocated,” Minister of Social Development Anne Tolley says. “So far there have been 639 applications from businesses for the support, and $4.877 million has been paid out, with Kaikōura we realise that tourism is a large economic stand for business.”

Approximately 330 persons (FTE) are employed directly in tourism. While almost 700 people in the district work in businesses that are wholly or partly tourism-based, this flow-on effect is quite small, and reflects both the very limited business support infrastructure in Kaikōura and also the very low demand for external inputs in some businesses.

The significant drop in seasonal tourism has added to the strain for already hard-pressed small tourism-based businesses in Kaikoura. The town’s tourism trade hinges on State Highway 1 being operational, and with tourism spending worth almost $100m per, the government will place a very high priority on restoring the highway and enabling Kaikōura to get back on the tourism network ahead of next summer.

A permanent loss of through traffic would severely undermine the sustainability of the town and its tourism sector, more than it already has. With tourism making up 12 percent of its economy, it seems safe to assume that the negative effect of the earthquake on the district’s GDP will be proportionately greater than Christchurch suffered, particularly given that tourism represents just 3.3 percent of the greater Christchurch economy.

Consequently, a larger population decline in Kaikōura than in Christchurch is likely – but how much larger? Without sufficient employment opportunities in Kaikōura outside tourism, people may be forced to leave the town and look for work elsewhere.  As a result, we would not be surprised to see a drop of as much as 16 percent in population over the next 18 months. 

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Courtney Devereux is a Communication Consultant at Clear Hayes and freelance business writer.