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The start to 2021 has already been hugely unsettling for our industry, involving several community outbreaks and recent short-notice Alert Level moves. This has emphasised again the extremely challenging trading conditions we are continuing to find ourselves having to operate in.
By Marisa Bidois, CEO, NZ Restaurant Association marisa@restaurantnz.co.nz or 0800 737 827
The situation has been particularly dire for Aucklandbased businesses, who continue to bear the brunt of Alert Level movement. A survey conducted in February showed that 40 per cent of establishments in Auckland did not open their doors at the recent Alert Level 3, with 56 per cent reporting being ‘devastated’ by new trading restrictions imposed after the Valentine’s Day community outbreak. As far as hospitality goes, three days at Level 3, or 2, is not insignificant and a week or more is putting into peril a hospitality operator’s ability to survive.
A return to Alert Level 3 in Auckland affects 976 Restaurant Association member businesses, around 19,500 workers, and is responsible for losses estimated to be around $116 million per week. Only 58 per cent of our Auckland members can trade at Level 3 and those that do open operate at significantly reduced levels.
What is now imperative is that the Government looks to start financial support of affected businesses from the first day of any level change. The constant last-minute closures and restrictions on trading are not workable for us – placing an untenable financial and emotional strain on our business owners and their staff.
What the Government fails to recognise is that most hospitality operations have no ability to trade at Level 4 and limited opportunity at Level 3 - working from home is not an option. The level of restrictions required at Level 2 also adds significant layers of cost and compliance that further limit the ability to trade profitably. Customer unease also means that even when open at Level 2, customer traffic is severely diminished. As we also know from previous situations at heightened Alert Levels, days of restrictions generally also means weeks of cancellations and subdued trading. After the February 2021 Alert Level changes were announced members immediately reported cancellations weeks, and in some cases months, in advance.
There are also many unseen costs associated with Alert level movement decisions: fixed rent costs, ongoing operational and staffing costs; and more commonly food wastage. While three days seems inconsequential for other sectors - most notably the public sector - an Alert Level 3 movement sees large quantities of wasted food and further financial crunch on businesses.
The growing disparity between those that can operate their businesses profitably in the current climate, and those that cannot, can no longer be ignored.
We are seeking assistance to prioritise a few pragmatic measures and introduce some novel actions to help hospitality businesses remain afloat during the continued period of uncertainty.
For nearly a year we have been writing, approaching, pleading, to the Government to work with the hospitality sector, to keep our businesses open, workers in jobs, and livelihoods intact. We remain wanting.
Last year the Restaurant Association launched a nationwide petition calling on the Government to adopt a scheme to support our industry by subsidising the cost of dining out. Our Dine Out to Help Out scheme, was launched with a nationwide petition which gathered 3500 signatures in just five days. The events of this week have reinforced that a scheme like this is still more than relevant and if it is adopted it will put much-needed cash back into businesses pockets when they are struggling to stay operating and keep workers employed. It also helps Kiwis to get a freshly prepared meal at a discounted price.
Members have reported that one of the biggest challenges for them in 2021 is the uncertainty of a potential return to lockdown, or restrictive Alert Level changes. Addressing this, in September we met with the Treasury and recommended the
Government investigate creating specific, sector-led alert level guidance in the event the country goes back up alert levels. We established this guidance for hospitality and met with treasury in Sept and then submitted the final plan in November.
This sector-specific alert level guidance addresses both operational and fiscal changes that could be ‘triggered’ each time there is an Alert Level change. This kind of guidance would provide much needed certainty during these times and should be spearheaded by the Government sector-by-sector.
If a world of revolving lockdowns is the best plan we have, then the Government needs to urgently engage the sectors hardest hit by these lockdowns - hospitality, retail, services industry - and work with us to chart a course for business survival. Nearly a year on, living in an abundance of caution should not be the best plan we have.
Much as we had hoped, we unfortunately haven’t started the year with any return to more settled trading conditions and we are concerned by the overwhelming financial and emotional toll this virus is continuing to have on hospitality. We need to see urgent political leadership for hospitality if we hope to see our prized sector survive.
We will continue to advocate for changes on behalf of all members and the industry.
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Design collaboration with artist Sam Mathers Design collaboration with artist Sam Mathers
Meet Sam Mathers — Raglan local and talented artist, who couldn’t be more perfect for this collaboration. Sam is an ocean dweller; a surfer who feels more comfortable in the water than on land. He is a person who cares deeply about the natural world and all of its creatures — something that is often a theme in his paintings. Follow him @sammathers Meet Sam Mathers — Raglan local and talented artist, who couldn’t be more perfect for this collaboration. Sam is an ocean dweller; a surfer who feels more comfortable in the water than on land. He is a person who cares deeply about the natural world and all of its creatures — something that is often a theme in his paintings. Follow him @sammathers
