Lights out for capital nights out?
Wellington’s nightlife is under pressure as bars go under and operators say they’re ‘‘packing it in’’ after tough years. Piers Fuller reports.
The cost of living crisis is putting the squeeze on Wellington’s night life as a raft of venues call time. Five bars went into liquidation over the past month as operating costs mounted and punters tightened their purse strings.
Long time Wellington venue operator Matt McLaughlin said the industry had been in bad shape since before the pandemic, and things were getting worse for the little guys.
‘‘We’ve been battling away for three years just trying to keep our heads above water. Nobody could see what Covid was going to do for any industry and the flowon effects are still in play.’’
The five bars that went into liquidation were Love Not Lost on Allen St, Birdcage on Dixon St, Amador in Willis St Press Hall, Serious Happiness in Newtown and The George on Willis.
McLaughlin said that although there had been ‘‘a bounce back’’ after Covid restrictions eased, the cost of living crisis hit hospitality harder than most. Input costs for everything such as wages, food, beverages and power had gone up, and it was still very difficult to find staff, he said.
‘‘Our margins are so slim, so many of us do it for the love of the industry, not to make a squillion bucks, but now we can’t even make ends meet so operators are just packing it in.’’
McLaughlin said attrition in the industry isn’t necessarily a bad thing. ‘‘If some of the operators go off in to the sunset, it leaves the pie a little bit bigger for everybody else.’’
Public records showed there were about 660 alcohol licensed premises in the Wellington City Council area, including bars, restaurants, supermarkets and clubs.
Meanwhile, the big operators were getting bigger and a merger of two of New Zealand’s biggest hospitality groups this week had implications for the Wellington scene.
Ka¯pura, formerly Wellington Hospitality Group, operated hospitality venues throughout the capital, and its merger with Auckland-based Joylab to create Star Hospitality Group, was announced last week.
With the merger, Joylab’s majority shareholder DB Breweries acquired its remaining shares and Ka¯pura founders Jamie Williams and Andrew Williams were also shareholders in Star Hospitality Group. DB was set to own around 80% of the new entity.
Ka¯ pura owned around 35 venues in the Wellington region and others in Waikato and Bay of Plenty, and Joylab had around 20 establishments in the Auckland region.
Jamie Williams said the diversity of their portfolio of venues helped them through the tumultuous past three years, and their CBD establishments were the worst hit by the pandemic. ‘‘The waterfront held up remarkably well, because people still wanted to come out and grab a beer and a drink.’’
Williams said the closure of a few downtown bars was not necessarily a canary in the coalmine of the future of the industry, but he admitted it had been a tough time. ‘‘The risk is that after a couple of years of bumps and bruises, I’m not sure some of the operators will make it through the next bumps and bruises that might get caused by a recession.’’
He said the looming downturn was going to affect people’s spending but ‘‘Wellingtonians like to go out more than any other city in the country and I can’t see that changing’’.
With more skilled staff coming through the border, the group was able to start getting back to normal operations.
As part of the merger, Williams was appointed chief executive of Star Hospitality and was positive about its future both in Wellington and nationally.
‘‘The business overall becomes stronger as we get a greater pool of experience and insights to draw from as well as obviously the benefits of increased scale. We will be able to accelerate investment into a lot of areas of the business that were put on hold during
Covid like improved training and development of our staff and improving our sustainability practices.’’
DB Breweries said its investment in Star Hospitality showed its ‘‘ongoing desire for New Zealand to have a strong and healthy hospitality industry that brings valuable experiences to locals and tourists’’.
Managing director Matt Wilson said that although the industry had been through a tough few years with Covid restrictions, lack of tourism and extreme labour shortages, they had ‘‘great faith in its ability to bounce back’’.
‘‘No-one is immune to economic pressures and it is a challenging time for all businesses. However, we are confident that Kiwis will use more of their discretionary spending in hospitality as they look to connect with friends and family.
‘‘We know that social interaction and connection is even more important in tough times. Businesses like ours are at the centre of good times, and hospitalityrelated businesses have a really important role to play in bringing people together.’’
Jeremy Smith of Trinity Group, which owned six Wellington businesses, said despite recent closures, local hospitality was ‘‘still in a good place’’.
‘‘We’re producing amazing food, amazing experiences. Absolutely there’s headwinds, absolutely there’s challenges. We’re going to probably see more businesses fail, but to a degree, that’s the nature of the industry. You do have a lot of young entrepreneurs wanting to create something special and they don’t always have the money, the experience or business acumen to deal with the challenges that get thrown at them.’’
Smith said council’s support of events such CubaDupa, Visa Wellington on A Plate and the Eat Drink Play festival showed that the industry continued to be critical to the city.
‘‘Absolutely there’s headwinds, absolutely there’s challenges. We’re going to probably see more businesses fail, but to a degree, that’s the nature of the industry.’’ Jeremy Smith