Hospitality’s Plea: Operators are at Breaking Point

WELLINGTON, NEW ZEALAND - MAY 29: The Minister of Finance, Grant Robertson, provides his weekly Treasury update on May 29, 2020 in Wellington, New Zealand. COVID-19 Alert Level 2 restrictions ease slightly from noon on Friday 29 May, with the size limit on all gatherings increasing from 10 to 100 people as New Zealand continues to record low new case numbers. Cabinet will consider Level 2 settings again on June 8 and will make a decision on whether to move New Zealand to to COVID-19 Alert Level 1 no later than June 22. (Photo by Dom Thomas-Pool/Getty Images)

Many hospitality businesses will fail as a result of the present lockdown unless the Government gives them targeted funding, according Hospitality New Zealand. It has written to Finance Minister Grant Robertson telling him this and pleading for help.

Chief Executive Julie White noted that many hospitality and accommodation operators are at breaking point.

“They need help now,” she expressed.

“They’re telling me this lockdown is hitting them harder than any of the previous ones, and they won’t survive much longer without help. They can’t wait till the lockdowns end – that’s too far away.

“It’s not even a case of getting out of Level 4. For many businesses it’s not even viable to re-open till we get to Level 2, and at the present rate of decline of new positive COVID cases that looks like many weeks away.

“Most have somehow survived till now. I don’t know how, what with stretched balance sheets, accumulated debts, and a very soft summer, but they did. But this time it’s different. I fear it’s one lockdown too many, and the combined effects of all those factors will be the last straw for many.”

White explained that the problem is there is no access to ongoing funding for businesses. They can access the wage subsidy scheme, which is great, but it doesn’t pay the rent and other fixed costs.

“And I’m hearing there’s less help coming from landlords this time around. I’m pleading with the Government, and in particular Finance Minister, to consider the impact on sectors like ours,” White continued.

“He has said he knows hospitality operators are doing it tough, but he hasn’t offered any targeted support. Our ask is very simple: extend the current resurgence support package to hospitality and accommodation operators, similar to the way the wage subsidy scheme works.

“I’m talking about the livelihoods of family owner-operators who are coming under greater stress, and I fear for their mental health. It’s a matter of balance, and right now the Government assistance is not balanced.

“Business also needs more clarity on the Government’s ‘plan’. Will we go into another lockdown if we find another community case? Are we waiting for a certain proportion of Kiwis to be vaccinated before that spectre is removed from over our heads, and if so, what is that vaccination rate?”

Hospitality New Zealand worries that having no clarity on a plan creates so much uncertainty – and that will only result in business closure and impact jobs and communities.

“It means we have no idea if operators outside Auckland will be in Level 2 in time for Father’s Day this weekend. This is normally a strong trading day, and it would make a big difference to many, but we remain in the dark,” concluded White.

“Uncertainty can be the biggest killer.”