2021 Hospitality Report shows industry growth pattern reversed.
The latest Restaurant Association Hospitality Report finds that nationwide sales for the hospitality industry have declined sharply after more than 20 years of continued growth.
In 2021 New Zealand’s hospitality sector achieved record sales of over $11. billion (year end March 2021). This represents a sales decline of 9.3 percent over the previous year. Sales decline carried across the industry, excluding the takeaway sector, which recorded a small increase of 1.7 percent.
Over half of every dollar spent dining out is spent at a restaurant or café, which has almost 51 percent market share.
Annual sales for this usually dominant sector declined 9.5 percent in 2021, which in dollar terms translates to a decrease of $589.6 million over the year previous.
Catering experienced the biggest losses as the beleaguered events industry ground to a halt. This sector declined by 33 per cent recording annual sales of $632.8 million compared to $956.8 million in 2020.
Pubs, taverns and bars also realised annual sales decline of 12 percent (a decrease of $202.9 million).
Takeaway / food to go sales growth has led the industry over the past 3 years but with the shift in alert levels that extended in 2021, this sector was the only one to achieve growth in this year of 1.7 percent representing 27 percent of total sales.
BREAKDOWN BY REGION
Consumer spending is highest in Auckland, Wellington and Canterbury. These three regions all have annual sales of more than $1 billion per annum.
All three of the largest regions experienced losses in 2021 with Auckland sales falling by 13.6 percent, Wellington sales falling by 7.7 percent and Christchurch by 6.1 per cent.
Regionally, the largest percentage sales decrease was experienced by Otago and the Southern Lakes region which experienced a sales decline of 24.8 percent.
Skills shortages continued to be an issue in 2021 with employee numbers declining by 2.7 percent to reach 134.5 thousand employees.
THE ROAD AHEAD
The rate of growth in hospitality over recent years has been impressive and until the COVID-19 outbreak the industry was booming.
To rebuild itself the industry needs to focus on recovery and sustainability and put in place operational structures for a profitable and sustainable hospitality business model.
“Sadly, our industry’s strong growth story has been decimated by COVID-19 leading us to develop a future framework to best support the recovery of our sector and ensure government policy matches the realities of everyday hospitality operations,” said Marisa Bidois, CEO of the Restaurant Association.
“We have faced some significant Government policy changes in the last 12-18 months, covering pandemic operations, employment, immigration, education and more. This has affected business confidence in our sector, with Government legislation and compliance continuing to be cited as a key challenge facing the sector.
“Until the pandemic hit, the hospitality industry contributed $12 billion to the economy, making it one of New Zealand’s largest industries. Despite being an enduring powerhouse of the New Zealand economy, policy made for the sector, for hospitality, is fragmented, impractical and often devoid of the everyday realities of operations.
“In order to rebuild the industry, we need a joined-up strategy to ensure a well-rounded, productive sector that is a vital contributor to social well-being, nationwide tourism and the growth of the wider New Zealand economy.”
By The Restaurant Association NZ