01_QHA_July_Online

FINANCE FOCUS
LESSONS FROM COVID-19
IN THIS MONTH’S EDITION OF QHA REVIEW MAGAZINE WE’VE ASKED A FEW OF OUR MEMBERS TO SHARE
THEIR THOUGHTS ON HOW THE COVID-19 CHALLENGES HAVE AFFECTED THE FINANCE SIDE OF THE INDUSTRY
AND TO OFFER MEMBERS SOME INSIGHTS TO BE AWARE OF RIGHT NOW AND IN THE TIMES AHEAD.
QHA REVIEW | 42
Prosperity director Steve Gagel shares his thoughts on
the finance scene below:
This time last year the industry was contemplating the
end to lockdown and the reopening of operations after
a 3-month shutdown. In that time, the importance the
community places on social interaction in hospitality
venues has been highlighted and that should be
celebrated industry-wide. The period has also turned
the spotlight on business operations, particularly when it
comes to managing finance.
Operations during COVID-19
For the year ended 2020, turnover was obviously
affected, but most, if not all, of my clients had a better
bottom line profit and this was based on two things.
Firstly, the government assistance from federal, state
and local levels definitely kept business whole along with
major support from our banking sector.
The Jobkeeper package definitely was the backbone
of the assistance package and this, coupled with the
Cashflow Boost, payroll tax removal, bank assistance
with debt deferral and removal or deferral of rates, land
tax and gaming taxes, definitely allowed pubs to be
prepared to reopen in July 2020.
The extension of asset write off provisions also allowed
pubs to confidently invest in their assets during the
shutdown period to offer better facilities upon opening.
Secondly, every hospitality business was forced to have a
good look at costs and most were stripped back to bare
bones in order to prepare for the unknown future. With
this heavy focus on costs, pubs were forced to critically
review what costs were essential to a good operation
and in the process, costs that were ‘nice to have’ were
soon found out.
The three-month time out also allowed management time
to critically analyse what and why they had done things a
certain way and to strategically analyse operations. The
net result of this period is that the pubs coming out of
lockdown were definitely leaner and meaner and more
focussed on profitability as the risk of a second wave and
further lockdowns was, and still is, a reality. Hardest hit
was the CBD area as many offices were forced to shift to
working from home to continue operations.
High density areas were found to be hotbeds of
transmission (i.e., Ruby Princess), and with panic running
rampant, the workforce in general decided it was much
safer to work from home.
Up to last month, the state government still had more
than half of its staff working from home.
Over the past month, a push to get government workers
back into the city has definitely improved this situation.
There was a revolutionary push to use of technology in
society in a small space of time.
Cashless trade went up to a new level and to date, use of
cash is very much in the minority.
The other interesting observation during the lockdown
period is the spike in online gaming mostly in unregulated
and untaxed environments. Data from Illion showed
that online gaming increased by up to 193% during the
lockdown period – mostly to unregulated and untaxed
providers.
Post Covid recovery
From the opening of pubs in July 2020, operations were
in demand and the only thing slowing trade was the
reduced capacity restrictions placed on venues by state
government.
This resulted in a supercharged ‘covid spike’ in gaming
for July to September in most cases and through to
December in some regions. Bar operations were relatively
flat, if not down, up to 10% on the prior year and food
struggled to gain traction until December 2020.
With the relaxation of capacity numbers in November, the
pre-Christmas period for most was a bonanza.
The gaming boom definitely assisted pubs in getting up
and running and set up pubs well, with most venues