Newcastle Supercars boom or bust for east end traders?

The promised economic boom from next week’s Newcastle Supercars race is feeling more like a bust for some business owners in the city’s east end.

Destination NSW and Newcastle City Council have partnered with Supercars to bring the race to the city for the next five years. They predict that the race will attract about 16,000 visitors each year and inject $11 million annually into the local economy.

Demand for tickets has been high and hospitality businesses away from the track are in line to benefit from the race without wearing the cost. The race may yet prove to have long-term promotional benefits for the city, but five months of civil works and track construction have left some small enterprises in Newcastle East feeling plenty of short-term pain.

The first Newcastle 500 has been especially disruptive because of the one-off civil-works program and light-rail construction in Hunter Street, and the council and state government introduced a park-and-ride service this month from Hunter Stadium to help alleviate traffic and parking woes. 

Race organisers say track work will start in mid-October from next year, but traders say even the shorter period of disruption in the busy spring and pre-Christmas period will leave them with little hope of recouping their losses on the three-day race weekend. 

The Newcastle Herald spoke to three neighbouring business owners about their experiences since work started in early June.

NO-GO ZONE

Royal Day Spa owner Sue Geary said she might have to sell her business if track work continued to affect her revenue next year – and if she can find a buyer.

Ms Geary said her trade had fallen nearly 50 per cent in recent months and she had cut her casual staff numbers by more than half as road closures and parking restrictions made access to the east end difficult.  

“Suffering is probably a nice word for it,” she said. 

“People just can’t get into Newcastle. We’ve had clients who did book in, but they can’t park. Now people are not even ringing and making appointments. I’ve had clients tell me they’re parking at Marketown and trying to get a bus in here.

“I normally have 12 girls; now I’ve got five because I haven’t been able to give them enough work.

“I could go on forever. When there were roadworks going on I had clients who refused to pay for their treatments because of the jackhammering.” 

Ms Geary said late September to late January was easily her busiest and most lucrative time of year.

“I do nearly $200,000 in gift vouchers with people walking in and out in that time. I’m going to lose all my Christmas trade. I’ve lost all my wedding trade.

“If that happens [in future years], I will sell. I get all the school formals. I get big groups, hen’s groups. Christmas parties. I’m getting none of it.

If I totally booked out, I would never recoup the money that I’ve lost.

“I’ve had to borrow money from my husband. I have not made a cent this year. I’ve had to borrow money from my own personal savings and pump it into the business to keep me afloat.”

She will open the spa during the race weekend and has spent money on advertising, but she said she had no idea if she would have any customers.

“I’m taking a punt opening on Saturday and Sunday. If I got totally booked out, I would never recoup the money that I’ve lost. I’ve got to try to recoup some money. I could fall flat on my face over it, too, if it’s going to be as noisy as what they’re saying.”

She had spoken to her solicitors and insurers, but the Motor Racing (Sydney and Newcastle) Act did not allow for compensation.

PUTTING THE BRAKES ON

East End Hub owner Lizzie Kocon had three casual staff resign on Monday due to lack of work and is concerned about the cafe’s long-term viability.

Ms Kocon, who has been in the restaurant trade since she left school, said takings were down about 25 per cent in the past few months.

“We’ve owned the cafe for almost three years. We’ve done very well up until now, and this has really put the brakes on,” she said.

“We’re quite concerned, I must say. We’ve definitely gone backwards, and we’re feeling the pinch, and that’s quite stressful.

“What we’ve been told is that we will recoup all our money within the three days. That’s just what people are saying. But I’m not sure that is actually going to happen. I highly doubt it.” 

I’m very positive about it because I want to be, but when you can’t get the money in and the people aren’t coming, it’s hard to keep the business afloat.

Ms Kocon said she hoped the race would boost business next week, but the disruption had been worse than she and other business owners had expected.

“It has actually. I’m very positive about it because I want to be, but when you can’t get the money in and the people aren’t coming, it’s hard to keep the business afloat.

“I’m very excited that Newcastle’s having the growth, because it’s a great city. But we’re only a small business and we really rely on people to come to be able to pay the bills. We don’t have a buffer.”

EMPTY FEELING

Rustica chef and owner Mark Hosie hopes the council and Destination NSW help businesses recover by promoting the east end after the Supercars weekend. 

The experienced restaurateur said the promised benefits of the race had not materialised, and instead he had been forced lay off staff and take a financial hit.

A Destination NSW spokesperson told the Herald on Tuesday: “The event owner, Supercars Australia, has been working with businesses in the event precinct to provide assistance and ensure minimum disruption in the lead-up to the inaugural Newcastle 500.”

But Mr Hosie said he had seen scant evidence of this, other than Supercars “filling my letter box with what road’s going to be closed next”.

Rustica overlooks the track, and Mr Hosie had hoped to recoup some of his losses by selling 100 day-long food and drink packages for $450 a head on each day of the race.

But he has now limited that deal to Sunday and is instead offering a $65 banquet on the first two days.

He expects to sell out, but he is often busy at this time of year anyway.

“If I make 10 grand, that’s what I’m losing each week. That one day isn’t really going to help in the grand scheme of things,” he said.

“I’ve just cancelled our Friday and Saturday package and we’re just opening up the restaurant and we’re booking up at a rate of knots now.

I’m hoping next year it’s nowhere near as disruptive and, over five years, who knows?

“The Sunday package will sell, but it’s still not going to be the bonanza because Supercars have taken a fair bit of the trade themselves.

“I’m hoping next year it’s nowhere near as disruptive and, over five years, who knows? Is it going to be good for Newcastle? Is it going to bring people in? I don’t know.

“I’m not anti-Supercars. I know it’s their first year and they’re flat chat and they’ve probably got 500 fires to fight every day, but you’d think you’d come into these sort of events with a little bit of a game plan for helping out small business.”

Mr Hosie owns the business with former Tourism Hunter chairman Will Creedon, who helped bring the race to Newcastle.

He said his lunch trade had dropped 50 per cent – he was 80 to 100 customers down on Melbourne Cup day – but his dinner bookings had been less affected.

“I’ve had to cut back on hours for casuals and let a few good staff go,” Mr Hosie said. “It’s never nice, but we’ll survive this. But, after 35 years in the game, survival’s not really what you want to do it for.

“It’s basically been quarantined. I feel so sorry for the guys with cafes. I survive on the night trade. I’m going to get through this, but there’s people out there doing it really tough.

“The council and state government are going to have to come up with a strategy to let people know that once Supercars have gone the east end is open for business.”