Hospitality Business Magazine

Hospitality needs ‘targeted financial assistance’

The New Zealand Government needs to provide immediate targeted relief to the hospitality industry says Restaurant Association CEO, Marisa Bidois.

“The reduction of wage subsidy from 14 days to 7 is another kick in the teeth for our businesses. Our industry cannot work from home and at Level 3 meal delivery or takeout is not always a viable option for some businesses.

“With mounting costs from a year of dire trading, some parts of our industry were just starting to recover, but now we are faced with further closure periods and this adds further financial pressure to our sector,” warned Bidois.

“For almost a year I have been pleading with Ministers to show leadership for hospitality, if we are to keep our businesses open, workers in jobs, and livelihoods intact; and I remain wanting.

“There are many unseen costs associated with alert level movement decisions: fixed rent costs, single server costs, reduced capacity due to physical distancing requirements and more commonly food wastage.

Marisa Bidois, CEO of the Restaurant Association of New Zealand.

“While three days seems inconsequential for other sectors an Alert Level 3 movement sees large quantities of wasted food and further financial crunch on businesses.

“Customer unease also means that even when businesses are open at Level 2, customer traffic is severely diminished until confidence builds again gradually on a return to Level 1.”

In September the Restaurant Association met with the Treasury and recommended the Government look into creating specific, sector-led alert level guidance in the event the country goes back up alert levels.

“Despite establishing this guidance for hospitality, outlining both operational and financial assistance that would be triggered at different alert levels, and submitting it to Treasury in November, disappointingly it has still not been adopted.

The situation is particularly dire for Auckland based businesses. A survey conducted on Monday 15th February showed that 40 per cent of establishments in Auckland have not opened their doors at level 3 with 56 per cent reporting being ‘devastated’ by the new trading restrictions.

In August 2020 the Restaurant Association launched a nationwide petition calling on the government to adopt a scheme similar to the UK’s “Eat Out to Help Out” initiative, calling on the House of Representatives to urge the Government to provide targeted support for the hospitality industry through a home-grown version of the UK’s initiative that the Association has dubbed “Dine out to Help out”.

The petition gathered just short of 3500 signatures in the five days it was live and the written submission was made last week.

“If a world of revolving lockdowns is the best plan we have, then I implore the Government to urgently engage the sectors hardest hit by these lockdowns – hospitality, retail, services industry – and work with them to chart a course for business survival. Nearly a year on, living in an abundance of caution needs to be balanced with a plan to serve those paying the heaviest price to keep us virus free,” concluded Bidois.

Key points:

  • New survey of members shows 40 per cent of Auckland businesses are not opening at Alert Level 3.
  • 56 per cent of Auckland businesses report being ‘devastated’ by latest trading restrictions.
  • Association calls on Government to offer ‘immediate and overdue targeted support.’