Report finds collapse risk for Gold Coast businesses has increased since Commonwealth Games

A PROMISED Commonwealth Games boom looks more like gloom for more than 300 Gold Coast businesses, which a new report suggests are at risk of collapsing in the coming year. Here’s why.

Lonely Borobi at Surfers Paradise beach the day before the Commonwealth Games began. Photo: Lyndon Mechielsen

A PROMISED Commonwealth Games boom looks more like gloom for more than 300 Gold Coast businesses, which a new report suggests are at risk of collapsing in the coming year.

The SV Partners Commercial Risk Outlook Report shows 310 businesses with a turnover of more than $1 million are at risk, up from 247 prior to the games.

Forty-three of these businesses have a yearly turnover above $10 million.

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Cavill Mall was relatively empty for a school holiday period, the day before the Commonwealth Games began. Photo: Lyndon Mechielsen

BUSINESSES BLINDSIDED BY TRADE DROP

SV Partners director Matthew Bookless said many locals felt the benefits promised by the games had failed to materialise.

“It’s possible many businesses invested heavily prior to the games, in order to be ready for the anticipated surge in tourist numbers,” he said.

“Heavy pre-games investments may have left some operators with a shortage of cash, or high debt levels, which may have offset any benefits seen from the Games.

“A number of business precincts and shopping centres also underwent upgrades in the lead up to the Games, which have now come online. The tendency after such upgrades is for building owners to increase rents and we are seeing this occur which is causing greater financial stress and even some business lockouts.”

GAMES BUSINESS DOWNTURN PREDICTED IN 2017

Empty restaurant tables in Coolangatta while the beach volleyball was on nearby. Picture Glenn Hampson

The construction, accommodation and food services, and retail industries recorded the largest numbers of businesses at risk, with hundreds of businesses considered “high to severe” risk of insolvency in the next 12 months.

“Despite the investment leading into the Games and the Games themselves, there have been no notable drops in at-risk business numbers among these three leading industry categories,” said Mr Bookless.

“While $30 billion of private and public development is set to be rolled out across the coast over the next decade, it will certainly be too late for some, and arguably won’t directly benefit many.

The Southport CBD Street Party was practically empty at lunchtime on a Wednesday during the Games in Chinatown.

“The June 2018 quarter had the most personal insolvencies on the Gold Coast in over 12 months, which shows the tough climate is not limited to companies.

“Businesses that are struggling need to seek professional help today, to find strategies to improve their cash position and remain solvent.”

Commonwealth Games 2018. Empty beach. Picture: NIGEL HALLETT

The report’s findings show a total of 12,464 businesses or 2.3 per cent of incorporated Australian businesses across all industries are at high to severe risk of financial failure over the next 12 months.

The report draws upon millions of commercially-sourced records and data assets to create and analyse comprehensive risk profiles of more than half a million Australian incorporated businesses.