Hospitality New Zealand released their election manifesto earlier this year, with a clearly defined list of desires for the incoming Government come October 14.
The manifesto outlines seven key prioirities for the industry assicoation, including a Minister for Hospitality.
With 137,000 jobs and $6.8 billion in GDP, the hospitality sector is a big contributor to the economy – which is why the association feels it’s time for a dedicated minister. They’re also asking for a dedicated hospitality unit within MBIE to provide leadership, coherent policy direction, support and develpoment for the industry.
“Throughout the pandemic, it became apparent to us that despite hospitality’s economic contribution and importance to communities, the industry wasn’t well understood across government,” says Hospitality NZ CEO Steve Armitage.
“A Hospitality Minister (and/or dedicated resource within MBIE) recognises the contribution of hospitality and ensures that the unique needs and challenges of the sector are understood and addressed effectively. A consolidated role and/or team within government helps us head off unintended consequences within the policy environment, enabling us to grow the industry and take it forward.”
And the need for a specific Hospitality Minister is crucial, says Steve, with a Tourism Minister not quite covering it.
“Hospitality currently sits across six different portfolios, all of which can significantly impact the industry and the viability of our operators.
“While we appreciate the work and support of previous and current Ministers of Tourism, the broad nature of the tourism sector means our inclusion isn’t always fit for purpose. A Hospitality Minister’s responsibilities could extend to areas like local government, immigration, workplace relations, internal affairs (including class 4 gaming), and alcohol policy, not typically covered by the Tourism Minister.
“A Hospitality Minister would bring a deep understanding of the hospitality sector to the government, ensuring that our unique concerns and challenges receive the attention they deserve.”
Support for the industry’s workforce is another key request for Hospitality New Zealand, with a ‘low skill, low wage’ narrative penetrating the workforce and undermines the hard work of the hospitality sector.
“The ‘low skill, low wage’ narrative has unfairly labelled the industry and given many a negative perception of what it means to be in hospitality,” says Steve.
“Wages have risen 25 per cent in the past three years. Further, a ‘low skill’ narrative disparages staff in the industry and ignores the career paths and opportunities for growth available in hospitality.
“While we can be a stepping stone – providing many with their first job or assist with re-entering the workforce – this narrative characterises the industry incorrectly and has an impact on the way past ministers and officials have treated the industry.”
Immigration and workforce is a thorn in the side of the entire, wider tourism industry, and hospitality is no different.
“Immigration and working visas are of paramount importance to the hospitality sector,” says Steve.
“A significant portion of the hospitality workforce typically consists of migrant staff. Given the industry’s historically low national employment rates, immigration plays a crucial role in filling skill gaps and addressing the industry’s staffing shortages, particularly as we continue to work to attract Kiwis into the sector and train them up to the levels we need.”
The association is calling on the incoming Government to remove median wage benchmarks for working visas and reinstate partnership work rights in the immediate term, and craft a ‘holistic immigration approach’ in the long term.
“A holistic approach involves different parts of the government working with each other to resolve the immigration and staffing issues in the industry. The government needs to take into account how immigration impacts the industry, and how other areas of policy and the economy are directly impacted by the success of immigration. Well signalled changes with a reasonable timeframe and policy that works for migrants AND business owners is required.”
The strain of ongoing cost pressures is felt far and wide by the hospitality sector – a sector made up primarily of small businesses – and it’s something Steve says needs to be addressed.
”We feel ongoing cost pressures more than most, especially as they relate to regulation.
“The cost of doing business has drastically increased over the past few years, with minimum wage alone jumping 20 per cent over the past government term; let alone maintaining wage relativity and recruitment costs.
“Many regulations provide little wiggle room for operators and impact businesses financially, through increased rates and rents, alcohol licensing fees, excise tax, code of compliance certificates, insurances, annual building WOF renewals and more contributing to ever rising compliance costs.
“Coupled with a real ceiling on what the consumer is willing to pay, margins for hospitality are becoming even slimmer.”
Hospitality NZ would like to see the Government ‘put a handbreak’ on regulation, have a better understanding of cost pressures for the sector and work with the industry to improve regulations and ease compliance.
And accommodation doesn’t escape the regulation stresses, says Steve.
Te growth of short-term rental accommodation (STRA), through providers like Bookabach and Airbnb – has seen a lack of long-term rental properties available to communities in tourism hotspots and a rise in rental costs.
“Broad challenges with the STRA sector are a lack of available long-term rentals in tourism hotspots for workers and families, impact on the community feel of suburbs and contributing to rising rental prices,” says Steve.
“The long-term rental requirements are seen as onerous for landlords while the STRA sector is relatively unregulated and therefore attractive for those looking to make money on an investment property.
“Current regulatory settings at both central and local government level present an uneven playing field for commercial accommodation operators.
“Traditional accommodation providers are required to pay commercial rates, have fire safety plans, building code rules specific to commercial operations, etc while STRA operators are not subject to these same rules and regulations.”
Steve says their concerns around short-term rental accommodation are largely centred around ‘whole of house’ rentals renting over 90 days a year, as these places are for all intents and purposes operating a commercial business.
“Identification of these properties has been challenging, hence our emphasis on the need for a national register to remove some of the roadblocks for local councils looking to address issues related to STRA.”
Hospitality NZ has called for Government to ‘level the playing field’ for commercial accommodation providers and STRA.
“A ‘level playing field’ is when short-term rental accommodations – as described above – are held accountable to the same level of compliance that traditional commercial accommodation venues are required to operate to,” says Steve.
Read the manifesto in full here (downloads a PDF).
