Iconic Gold Coast resort fighting to survive
AFTER 100 years hosting guests in its idyllic Hinterland retreat, the iconic O'Reilly's resort could be nearing the end of its life as a tourism destination.
Managing director Shane O'Reilly, whose family pioneered eco-tourism in Australia when they first welcomed visitors to Lamington National Park in 1915, says bushfires, followed by the coronavirus pandemic, have dealt a huge blow to their business, one from which they may not be able to recover.
He says while O'Reilly's Rainforest Retreat managed to avoid the September fires, a one-night evacuation of the premises cost the business at least $400,000. The threat of coronavirus is now taking its toll as well, with panicked conference organisers questioning the cancellation policy and resort bookings down over the Easter and school holidays period.
While the summer was tough and the autumn looks anything but bright, Mr O'Reilly says the future looks all but impossible.
Last year, O'Reilly's insurance cost $380,000 per annum and covered losses up to $70 million. This year, that figure has jumped to $1.3 million, with coverage of just $10 million.
Mr O'Reilly, who is also chairman of the Queensland Tourism Industry Council, says that equates to more than $100,000 a month simply in insurance premiums - a figure that would destroy any ability to turn a profit.
While he's fighting for a fair deal, Mr O'Reilly admits that if he doesn't win, he will be forced to consider closing the business and turning it back into a cattle farm.
"It's a dark day when farming, one of the most fickle of businesses, looks more dependable and profitable than tourism, especially in the heart of southeast Queensland," says Mr O'Reilly, whose great-uncle Bernard earned a place in Australian history in 1937 after rescuing the sole two survivors from the wreck of the Stinson plane crash.
The family has also been the popular subject of several books and movies, with their heritage including Queensland's first paid park ranger. Across three generations they have transitioned their iconic bush business into an award-winning eco-organisation.
"It's just been one blow after another. This is far worse than the GFC - it's all changed so suddenly with no end in sight," Mr O'Reilly says.
"It started in September when we were evacuated, which never even needed to happen. The emergency services tell us it was not their call and they advised against it but it was ultimately a police decision.
"That one night, that one evacuation, broadcast from helicopters, has cost us at least $400,000. We returned the next morning and for the next 48 hours the phones rang off the hook with cancellations, we handed back $236,000 in two days and it's continued from there.
"We still have guests calling asking if we are open again, whether the place has been rebuilt, if the national park has started growing again - yet we were never closed down, we were never burned down and the rainforest was untouched by the fires. When you look at the long and short-term effects of that one-night evacuation, you have to wonder why that call was made.
"Following those 48 hours after the evacuation, the phones just went silent. We had four people down at reception doing absolutely nothing, everyone had left, no one was checking in.
"Right across the summer we continually had smoke in the air that was blowing up from NSW, the fires were nowhere near us but it was still hazy. We were constantly having people arrive, walk up to the check-in desk and say they weren't going to stay, they cancelled on arrival because they were too worried by the atmosphere. Day visitation has been right down as well, we're only just starting to see that come back."
Mr O'Reilly says bookings for the Easter holiday season were finally starting to flow in, when the coronavirus crisis kicked in.
He says it's impossible to forecast just how it will hit the business, as the situation changes daily.
"Where we are right now is completely different from where we were last week. For one brief moment it looked like we might have a bumper year in domestic tourism as everyone was encouraged to holiday at home, but now it looks like you may not even be able to leave your home," he says.
"Our Easter school holiday season was looking pretty good, but now we have the coronavirus crisis. We're living day to day, almost hour to hour here.
"We don't know if the worst has started or when it will ever end."
Mr O'Reilly says while state and federal government assistance is welcome, some methods have been misplaced, particularly within the tourism industry.
He says it is not the time to spend millions on marketing, but for practical measures to help businesses stay alive during this starvation stretch.
He says one of the first steps should be government intervention in the insurance industry, a move that would be critical to the survival of businesses like O'Reilly's.
"There's a time and place for a big tourism marketing campaign, but that's not right here, right now," he says.
"Probably the biggest help to businesses so far has been the Queensland Government's decision to allow small and medium businesses to defer their payroll tax payments for six months. It just creates some breathing space. Of course, it's gong to be very difficult when August 3 rolls around and we have to file six months at once; hopefully they'll allow that to roll out over the next six months.
"But the biggest single issue for us at the moment is this insurance nightmare. There are only two Australian insurers for resort businesses, Allianz and QBE. QBE were never interested in 'remote' resorts like us, so we were with Allianz - they covered us, Binna Burra Lodge, Spicer's and the resort at Kangaroo Island.
"Binna Burra and Kangaroo Island burned down, the conference centre at Spicer's Hidden Vale burned in 2018 and while we were untouched, Allianz decided they're not going to be in this game any more. So we were left with no one to insure us.
"Our only option was to go to insurers based out of London, who obviously have absolutely no interest in the future of eco-resorts in the Hinterland of Queensland. They know they're our only option, so instead of charging us 30 cents in the dollar, they charged 80 cents - just because they can.
"The craziest thing is that this isn't the first time this has happened.
"Resorts and larger tourism operators have struggled to get insured before, and so the State Government set up an insurance body in Brisbane to provide that cover, which eventually morphed into Suncorp.
"That cover became so popular they decided to sell it off, to privatise it. But that body, now called Vero, won't insure us either, it says we're too risky.
"We've come full circle, the government intervened, created a body, sold it - and now we need them to step in again.
"Without a local insurer, or at the very least a fair premium, I don't see a future in the industry."
Mr O'Reilly says despite the almost-biblical disasters of fires and plague, he's hoping this catastrophic era will see the tourism industry rebuild itself in a better form.
He says even without the insurance dilemma, the current demands of government regulations were slowly suffocating industry players.
"We actually employ a full-time compliance officer just to fill out all the necessary forms, it's an all-day, every day job," he says.
"Australia's tourism industry is built on our reputation as a safe and clean country, I understand the need to protect that, but we really have gone too far.
"The amount of time and money wasted on red tape is ridiculous.
"I'm hoping these crises will shine a light on some of the issues in the tourism industry and we can come out of it stronger, with some structural changes.
"My great-uncle and grandparents, they never would have dreamt that it would come to this.
"When I think of Bernard and his search for the survivors of the Stinson crash, he always said he believed that was his life's purpose - his love for and knowledge of the bush made him the right man at the right time.
"We need to get back to a place where, as the third and fourth generations on this land, we can look after it, protect it, and showcase it to travellers from around Australia and the world.
"I would hate to shut down O'Reilly's and go back to cattle farming, for the sake of our family and the whole region, but this is a game of survival right now."