A mixed start to the year shows why one-size-fits-all solutions won't work for hospitality, said Marissa Bidois, Restaurant Association CEO.
The first quarter of 2025 has given us a telling snapshot of the state of hospitality in Aotearoa, and if one thing is clear, it’s that regional differences matter more than ever.
On the surface, the numbers are modest. Industry-wide sales rose just 1.0 percent year-on-year to NZD 4.0 billion. Sales were down 5.9 percent on the previous quarter, though this drop is not unusual, Q4 includes the busy festive and function season, which is often the peak for urban operators. By comparison, Q1 is the high season for many regional and tourism-driven areas.
That contrast played out clearly in the results. While Auckland’s sales rose only 0.4 percent, effectively flatlining, regions like Nelson and Queenstown-Lakes recorded double-digit gains, up 16.5 and 13.4 percent respectively. Wellington, meanwhile, delivered a steady 4.1 percent increase year-on-year, an encouraging sign of resilience in the capital.
These variations highlight what we’ve been saying for some time: recovery is uneven, and it’s increasingly clear that a one-size-fits-all approach won’t deliver the support our sector needs. Local dynamics, be it reliance on domestic tourism, public sector foot traffic, or event calendars, are playing a major role in performance.
Feedback from our members tells a similar story. While some regions experienced a softer summer, others were buoyed by strong visitation and favourable weather. Some operators are seeing green shoots; others are still just keeping the doors open. Underlying it all are the persistent challenges we’ve become familiar with: rising costs, tight margins, and ongoing workforce shortages.
On the staffing front, there are small signs of improvement. Seventy-two percent of businesses still report difficulty hiring for senior roles, but that’s down from previous peaks of 90-plus percent. Entry-level recruitment appears to have eased slightly, with more locals looking for extra hours to meet their own cost of living.
Even so, labour challenges continue to limit service hours and growth potential. Visa processing delays, regulatory requirements, and accreditation hurdles remain a source of frustration, particularly for small businesses who don’t have in-house HR departments.
The Restaurant Association has responded with action. Following our 2024 Hospitality Summit, we’ve developed a 65-point action plan to tackle the sector’s most urgent needs — from workforce development to structural reform and sustainability. We’ve seen some early momentum with government, but there’s a long way to go.
If we want to unlock the next phase of growth for our industry, we need targeted support that reflects the realities on the ground, region by region, business by business. That includes investment in culinary tourism, smarter immigration settings, and practical business support that lightens the load for operators.
Hospitality has never been short on resilience. What we need now is recognition, and partnership, to ensure our sector not only survives, but thrives.
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