More Hospo Businesses Doomed With Unchanged Levels

The Government's decision to leave Alert Levels unchanged will result in more hospitality and accommodation businesses collapsing or being irreparably harmed – unless the Government comes up with a targeted payment for the industry, according to Hospitality New Zealand.

“This is devastating. It will be like a slow death for many businesses across the industry,” said chief executive Julie White.

“With changes to indoor settings in Auckland being Step 3 in the Government’s transition plan, it seems hospitality there will see no significant changes for three or four weeks – or longer – and many will not survive that long without help."

White said she is hearing from many who say they will not last another week – let alone three or four – without support. Weekly reviews leave so much uncertainty, and there are many sleepless nights ahead for hospitality and accommodation operators.

“We know we must be very careful with Delta, and we agree restrictions are needed, but many businesses in Auckland are on their last legs, and it’s only a little better for those outside Auckland.

“We welcome the removal of the cap on seated and separated patrons in venues under Level 2 in the rest of New Zealand, but in reality, that will affect just a few. For the vast majority of businesses, little will change.

The Association noted that every day that a businesses cannot trade at anything close to normal, is a day closer to them shutting their doors for good. That means family businesses and jobs lost.

“These businesses need targeted support from the Government. These are people who have done their bit throughout this pandemic and the Government seems to not be recognising that by offering material support," continued White, adding that the hospitality industry had been the most compliant of all industries despite being the hardest hit.

“Unlike most other sectors, ours has been the first into and the last out of all COVID levels. We’ve also been the hardest hit. Credit defaults surged by 11 percent just before the latest lockdown, to the highest value since the start of the pandemic, while business failures doubled in the quarter preceding the lockdown.

 “None of this will come as news to Government Ministers. We’ve been warning them of this looming disaster for many weeks, in meetings and in writing."

White noted that the Association was still waiting for a response to suggestions for support it presented to government in the middle of September. They included:

  • Making the wage subsidy available to all hospitality businesses at Level 2 as long as the business can show their revenue is down by at least 40 percent times
  • Paying the Resurgence Support Payment more frequently to businesses impacted more by the lockdown at level 2 and higher. Where revenue is down 71 percent -100 percent, the payment can be claimed on a weekly basis; 51 percent -70 percent, every two weeks; 30 percent -50 percent, every three weeks
  • Issuing Targeted Travel Vouchers, which would be funded centrally and allocated regionally to stimulate targeted regional support where, when, and to the businesses/sectors who need it

“We also proposed a focus on personal health and wellbeing by way of Government funding a national wellbeing service for hospitality operators similar to other industries such as construction. The hospitality workforce is under enormous stress from uncertainty and financial concerns resulting in mental toll, fatigue and depression, and that would go a long way to helping people cope," White concluded.

“Without the kind of targeted support we have suggested, I fear for the livelihood and mental health of many, many businesses, families and employees across New Zealand.”

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Alert Level 3 - Steps 2021