The timing of a rise in the minimum wage, announced on Friday, couldn’t be worse for the hospitality sector, which has been running at a loss over the past two years.
Hospitality NZ CEO Julie White says the sector wants to lift wages of its workers, along with skills and career development, but the timing of this increase will force the early closure of struggling businesses.
"Hospitality could not be in a worse position to pay more in wages.
"Half the sector’s businesses are no more than three months from closure – and this cost increase will happen in the deepest part of their financial hole. It will undoubtedly decide them to close.
"Most hospitality businesses are running at a loss because the public is not going out. There’s fewer customers now than even in the fearful weeks of 2020 just before lockdown.
"It’s not just the Red settings – some customers are fearful of COVID, and most won’t risk the life-affecting impact of being ensnared as a close contact," Julie says.
She says the industry is prepared to commit to a pathway of improved wages once the public feel safe to go out. But the only way of getting the sector through the next few months of Omicron is a financial rescue package from the Government.
