Thursday, July 25, 2024
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Return to Alert Level 3 a devastating blow for the hospitality industry

Tuesday evening's Government announcement that Auckland will return to Level 3 restrictions (and the rest of the nation to Level 2) due to confirmed cases of community transmission in South Auckland, is another hit for the already struggling hospitality industry and if the lockdown is extended, will likely mark the end for some operators says, Hospitality New Zealand.

Hospitality New Zealand chief executive Julie White says for Auckland hospitality operators, the uncertainty of when they can reopen will see a huge loss of working capital – with many having to literally pour product down the drain or throw it away.

"Our’s focus for our Auckland hospitality operators is how to safely shut down their businesses, yet again. In light of Auckland’s move to Level 3 on Wednesday and the strong likelihood that this lockdown could be extended beyond the three days, bars will have to pour their kegs down the drain and restaurants will be working out what fresh produce can be saved – it’s not as simple as turning the lights off and locking the doors."

For the rest of New Zealand, the Level 2 restrictions are also limiting for key hospitality operators as the requirement for single servers and 100 people maximum per venue, reduces potential income and comes with additional staffing costs.

"The industry has already faced significant challenges in continuously adapting their services at each Alert Level, leaving many operators with reduced profit and increasing debt. Without any certainty around when we can return to business as usual, the sector urgently requires targeted support and for the Wage Subsidy to be extended beyond September 1. The Government must provide urgent relief packages and allocate some funding from its $14 billion COVID Response and Recovery Fund to the hospitality sector," says Julie.

It’s a disappointing setback for the hospitality industry, as data released by Statistics NZ just this week showed that retail card spending in the sector hit the strongest level for a July month since data was recorded. While accommodation spending was down $30 million (-16 per cent), food and beverage services were up $92 million (11 per cent) compared with July last year.

"These numbers have supported what our members had been suggesting – a glimmer of hope that recovery is near, and on track with our strategy for the sector to ‘Survive, Revive and Thrive’," says Julie.

"People are enjoying going out and supporting locals, and whilst some regions who are highly reliant on international visitors are still doing it tough, there’s immense support in the community for these businesses. Let’s hope that support long continues."

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