Hospitality Business Magazine

Hospitality businesses pivot to survival mode

Hospitality operators are pulling out all stops to pivot and prepare for Covid-19 Alert Levels 3 and 2 while anxiously waiting for a Government response to their calls for more immediate support, Hospitality New Zealand said following the delay to shift to Level 3 until Monday April 27.

Hospitality New Zealand chief executive Julie White said the Level 3 restrictions will be too limiting for many hospitality businesses to re-open, but the businesses that can, are working collectively and with their staff to explore different options to get people back into work during Level 3.

“This includes dine-in restaurants looking at how they can give customers the restaurant experience at home and how we can work collectively to encourage New Zealanders to support their local hospitality businesses.

“They are doing their best in a cloud to forecast costs and budgets as well the logistics around things like how to bring back staff, ways to market to customers, and stock ordering and deliveries at Level 3,” White said.

“It will take a big commitment from operators to pivot and put in place things like distribution systems and contactless payments. It will also take buy-in from staff — for example baristas might have to become delivery drivers — and it will take support from New Zealanders patronising their local businesses, or it simply won’t be viable for most of these businesses to operate in these conditions.”

“Most importantly we are continuing to talk to Government, which needs to support our hospitality businesses with sector-specific assistance, particularly with rent relief. Even for those that can operate during Level 3, it is very unlikely that their revenue will cover costs like rent, and most are already carrying a debts from losses they’ve been incurring since tourist numbers started dropping in January.”

Hospitality New Zealand is also talking with the Ministry of Justice about allowing alcohol deliveries with meals, to support operators’ revenue and build the ‘restaurant at home’ experience; and is engaging with local authorities around rates relief and liquor licensing fees.

With uncertainty around when a return to level 2 will be, in a recent Hospitality NZ survey it was reported as many as 30% of hospitality businesses may not make it through without further Government assistance, White said.

“The wage subsidy alone is not enough with the losses that the hospitality industry has been carrying for much longer than other businesses — in many cases these businesses won’t be here for the 12 weeks to pay the subsidy.”

Hundreds of thousands of New Zealanders rely on hospitality businesses for their living — from hotel, casino and restaurant staff through to cleaning contractors, bakeries and delivery drivers. The hospitality and tourism sectors collectively bring $40 billion per year into the New Zealand economy and employ more than 400,000 people.