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A Podcast by Chartered Accountants Australia and New Zealand, with Me, Your Host, Mike O’Leary

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A Podcast by Chartered Accountants Australia and New Zealand, with Me, Your Host, Mike O’Leary EPISODE DETAILS Episode number 3 Episode working title Paul Anderson on surviving a crisis through communication and collaboration Episode overview In this episode of the ‘Making to the other side’ podcast, Paul Anderson CA, CEO at NZSki, talks to Chartered Accountants ANZ’s Regional Manager Mike O’Leary. They discuss how the pandemic impacted on the snow season in NZ, and how NZSki’s collaborative culture not only ensured that they could continue to operate but also helped them reach new heights of productivity. TRANSCRIPT Mike O'Leary: Hello and welcome to ‘Making it to the other side’, a podcast by Chartered Accountants Australia and New Zealand, with me, your host, Mike O’Leary. In this podcast, we are talking to Chartered Accountants who are making a difference every day in helping businesses navigate the financial implications of crises and plan for the future.I’m sure many of our listeners are avid skiers and enjoy hitting the slopes during snow season. There’s nothing better than skiing all day under clear blue skies and on fresh snow. If you’re in New Zealand and were lucky enough to enjoy a few days on Coronet Peak, The Remarkables or Mt Hutt this winter, you might have noticed a few significant differences. And that’s because, like most other industries, the tourism industry was of course hugely affected by the outbreak of COVID-19 this year. Our guest on the podcast today is someone who can give us a unique insight into just how the pandemic impacted on the snow season in NZ. Paul Anderson is a Chartered Accountant and CEO at NZSki. He’ll talk us through how things unfolded ahead of what was going to be another record-breaking season. They reacted quickly and managed to continue to operate, albeit under some very different circumstances. So let’s now go to my conversation with Paul. Mike O'Leary: Paul, thanks for joining us today. Paul Anderson: Kia ora, Mike. Mike O'Leary: Can you tell us a bit about the journey you've taken to become the Chief Executive of New Zealand Ski? Paul Anderson: Yeah. It's been a bit of an unusual journey in many respects. I've been through a number of sectors and working in both public and private sector. Started my life off as a policy analyst at New Zealand Treasury in Wellington, straight out of a Master's Degree in accountancy at the University of Canterbury too long ago for me to remember the exact dates, but spent four years there. Did the usual Kiwi OE up to London, worked in banking up there for a couple of years. And then came back and actually went to work for my former boss, who had been at Treasury, who was now at Telecom, and spent a good stint there in a variety of corporate finance and business finance roles. Then I took a sideways shift in Telecom and chose to take on an operational role which was just a fantastic way to broaden myself out a bit. And then I took my first general manager role as general manager corporate services for Christchurch City Council, which was effectively CFO with property, procurement, and IT thrown in for good measure. Paul Anderson: Did that through the earthquakes, negotiated the cost-sharing agreement with the Crown, and thought that was a good time to leave. And at the time this role in Queenstown had been advertised. It wasn't a role I thought I was well experienced for but, by fortune, the board was looking for someone who was commercial and still relatively young, because we've got a pretty young workforce so they needed someone that could connect with a young workforce. And we've got a fabulous operational team, so the fact that I was a bit green in terms of the ski industry wasn't a huge impediment. It helped that I have got a passion for skiing and have done that all my life. So I was lucky enough to join this family run business, family owned business, seven years ago, and I've been there for that time, which has been fabulous to be part of this industry. Mike O'Leary: And what attracted you personally to that change in role? Paul Anderson: I was really looking for my first CEO role. That was... I'd been in Christchurch City Council for around six years. While I was there, Christchurch City Council was kind of like doing three jobs. The first couple of years was growing into the role, then with the earthquakes coming along it became much more about a response to the earthquakes. And I loved the challenge and the mental stimulation that you get in the public sector, or in local government, but I did want to return to the private sector. So, with this role coming up, I was keen to give that a go, put my hand up, and really the thing I think that helped me, apart from my commercial and financial background, was the fact that I connected quite well with the family who are the owners of NZSki and got on very well with them in just one interview. Sir John Davies, who's the owner, is a really intuitive businessman, and he took a punt and the rest is history. Mike O'Leary: Paul, can you tell us at a macro level, what was the New Zealand 2020 ski season looking like in, say, January of this year? Paul Anderson: Yeah, look, we've been growing the industry for the last five to seven years and it's really been on the back of a really good, strong domestic base with our local visitors and then growth out of the north island. Before the growth part, it's been a lot about Australia and that increasing connectivity to east coast Australia, the ease at which they can now fly into Queenstown. Queenstown, as a resort destination, has a lot of what they've got to offer, and we've engineered our mountains, our resorts, in Queenstown, being Coronet Peak and The Remarkables, around that market. So we've been growing in the high single digits for a good seven years, and we reached 700,000 visitors last year, which was an all time record, so this year we were just looking forward to the same. Carrying on growing. We've been investing strongly in increasing our capacity over the years, so we were shaping up for a great season. Mike O'Leary: And what was your first indication that something was going wrong? Paul Anderson: We're part of a broader business, so Trojan Holdings, which is our parent company, also owns 40% of Bungy and Hermitage Guided Walks on the Milford and Routeburn tracks, that's the tourism part of their business. So we were pretty wired into the challenges coming out of initially the Chinese; the downturn in Chinese visitors, so we'd taken some actions as far back as December, January, to start to trim some of our investment plans. And then, come March, that was when things really started to get serious. It was very clear that the Chinese weren't going to come, then as we got into lock downs, that we were going to have closed borders for some time. And we had to go through the very real possibility that we weren't going to be able to operate. But we were determined to operate, and to do everything to show that we could operate safely. Mike O'Leary: What were the first big decisions? The tough ones that you had to make? Paul Anderson: It was really whether we could operate or not. We had to go through a lot of business planning. My finance manager and his team were working overtime on financial models, and just making sure we understood what it looked like not to operate, versus only operating a little bit. Obviously, we knew our business was going to be smaller, so if we could operate we knew that we weren't going to have that 40% of our visitation that comes from the Australian market. So, we had to make some tough decisions around our permanent headcount and just right-size our business for, not just this year, but we could see that, beyond this year, it would take a while to start to grow again. So, we had to make some tough decisions on reducing the size of that workforce initially, then we had to make some hard decisions around how we would operate this year. Paul Anderson: As I said, our businesses are built around a capacity that includes 40% visitation from Australia, so take that away and it became apparent to us that we actually didn't need to run both of our ski resorts for seven days a week, all season, and that we would have enough capacity with just one resort on weekdays and both resorts during the weekend. So they were some of the tougher decisions. There were other things we had to look at also. Our product set, to make sure that it was right for the domestic market, and of course pricing, to make sure we were attracting Kiwis and appealing to, hopefully, a new market. Mike O'Leary: Did you have to make some really difficult decisions about staff? Paul Anderson: Yeah. The toughest decisions for us were those initial staff that we had to offer redundancy to. In some respects it was made easier because we could offer them some seasonal roles.
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