However, Paul Davies, director of One Team Chartered Accountants, warns that the sector appears to have a long road to recovery ahead and that factors out of agents’ control will determine just how soon they can start to get back on their feet. ‘Only two or three of our clients have closed up shop and they were planning to anyway – the crisis has just brought things forward,’ he says. Davies says most agencies have had ‘really good’ financial results for the past two years, with all of his clients showing profits in the 2019-2020 financial year. However, that has obviously changed for this year, with the accountant forecasting 20% of normal revenue for his clients in the 2021 financial year, 65% in 2021-22 and 85% to 90% in 2022-23. ‘It is going to be a long slow recovery.’
He says any immediate light relies heavily on at least a gradual opening of the borders. ‘Domestic tourism has been positive, but it is a pie cut in a lot of ways. Most of our agents are really hanging out for the border to open, or at least to hear a plan around that. ‘I think travel will definitely pick up in December, January and February if the border opens. It will be a mixture of cash and credits – with millions of deposits, maybe billions, sitting there ready to be spent. Not everyone has been asking for their money back.
‘What agents are generally needing right now is funding. Many of them are finding that the government guaranteed loan is not a guarantee that helps the client – it helps the bank.’ But he says clients have found the regional business partner network helpful and have managed to access between $2000 and $5000 towards accounting fees. ‘Talking to people we find that a lot of them are still in a stunned situation, focused on survival. ‘If they had more certainty from the government, they would be able to look at timelines (for recovery) and at how they were going to adapt their business to the new environment.’ He says there is a need for businesses when they restart to operate with lower overheads. ‘People need to be able to scale up their costs as the business comes back and the revenue goes up. ‘If there is one thing that we have learnt from this terrible experience is that it is important to retain some business profits each year to provide a safety net should things change adversely.’