As Budget 2025 approaches, the hospitality sector is watching closely.
While the Government has already signalled that this will be a budget of “fiscal consolidation and economic growth,” the challenge is to ensure that consolidation does not come at the cost of industries already grappling with compounding pressures. Ours is one of them.
Hospitality is New Zealand’s seventh-largest employer and contributes $8.3 billion to GDP. It is not a marginal sector, nor can it be sidelined in favour of top-down growth strategies that overlook the practical needs of those on the ground. This Budget must acknowledge hospitality’s unique contribution and support it with policies that are systemic, sustainable, and not limited to one-off boosts.
Pre-budget economic commentary from JLL suggests that demand for retail space is growing, and they cite strong net absorption and rental increases in key regions as evidence. However, interpreting this as a signal to expand retail development is a short-sighted reading of what New Zealand really needs. Hospitality venues, particularly smaller operators, know the truth behind the data: occupancy and foot traffic vary wildly with economic swings, tourism cycles, and shifting consumer behaviours.
More retail space is not the silver bullet. What we need is better planning and smarter policy, not just more square metres.
We’ve seen the pendulum swing over the last decade, from COVID-era closures to inflation-induced cost hikes. Resilience in the sector requires thoughtful spatial planning and strategic support, not simply chasing the illusion of growth through property development.
Hospitality New Zealand has laid out three sensible, actionable asks ahead of Thursday’s Budget:
- Year-round business event investment
- A freeze on alcohol excise increases
- Streamlined compliance and regulatory reform
Of course, there’s more to be done. But these three measures would provide confidence, unlock investment, and directly support jobs and wages. They are not radical requests but rooted in real-world evidence and economic logic.
The hospitality and accommodation sector does not need another short-term fix or a symbolic nod. It needs policies that create stability and support operators in planning for the future, even as the economy continues to shift.
Right now, the sector feels like a piggy bank held together with tape: full of potential but in desperate need of repair before anything more can be added. Budget 2025 is the Government’s chance to reinforce the structure, not just patch the cracks.
With the right investment and settings from Budget 2025, hospitality is ready to help lift regional economies, create jobs, and contribute meaningfully to New Zealand’s growth story. The Government now has the chance to put these practical supports in place. If it does, the industry is ready to do the rest.
More news here.
