The Extension of Current Restrictions Will Mark the End for Some Hospitality Businesses

The Government’s decisions to keep current restrictions across the entire country could be the nail in the coffin for struggling operators, according to Hospitality New Zealand.

“While it’s no surprises that the status quo remains, this piecemeal approach to stay at Level 2-2.5 for another week is still a very constraining environment for our industry to operate in, sadly it will push some businesses to the brink of collapse,” commented Hospitality New Zealand Chief Executive, Julie White.

“We still have operators that can only realistically trade at Level 1, due to social distancing measures, so the longer they are closed, the harder it will be for them to reopen. We really would like to see a move to Level 1-1.5 as soon as possible. A silver lining is that the social distancing requirements on public transport have been eased, that will come as a big relief to our hospitality tourism operators.”

A recent member survey by Hospitality New Zealand revealed that many operators will need to take some serious measures in order to survive.

“In Auckland, 16 percent of hospitality businesses are thinking of permanently closing (compared to 10.7 percent for the rest of New Zealand), I suspect this figure is even higher now with the wage subsidy ending,” continued White.

“I still remain optimistic our sector will recover and come out the other side as the hospitality sector provides the opportunity to get money into the economy quickly. However, just like many businesses across different sectors, several hospitality operators will need to make some hard decisions about cost-cutting, from operating hours, reduction in staffing and suppliers.”

Hospitality New Zealand is working with Government to implement a sector-specific springboard solution, to keep as many hospitality workers in employment as possible and are continuing to call for a targeted working capital grant to keep businesses afloat.