Hospitality revenue returning to pre-pandemic levels
New Zealand’s hospitality industry turned over $13.38 billion in the year to September, surpassing prepandemic trading levels.
About $6.6b was spent at cafes and restaurants last year – a record annual result for the sector. Compared to 2019, it was up 13.5% from $5.7b.
But the Restaurant Association warned staff shortages had reached crisis point and were now stunting growth as restaurants, bars and cafes moved to capitalise on increased demand.
The latest Restaurant Association hospitality report shows the fast food and takeaways sector is booming. In the year it made $3.8b – up $517 million on the previous year.
Pubs, taverns and bars also experienced a strong bounceback in sales at $1.7b, up $375m on the previous year, while clubs and catering services had been slower to recover.
Before the onset of the Covid-19 pandemic and hospitality faced mass disruption and closures, the industry turned over a combined $12b in 2019.
More than half of every dollar spent dining out is spent at a restaurant or cafe´.
Restaurant Association chief executive Marisa Bidois said spending in the sector had ramped up in the third quarter of the year once the Government moved to scrap the Covid-19 Protection Framework requiring mask use and social distancing in venues.
She said the increase in spending was good for the industry and came as New Zealanders came to understand what it meant to have to live with the risk of the virus.
‘‘That dining hesitancy that we had seen previously largely started disappearing [in the third quarter] that was one of the big things we dealt with in 2021; the concern about going out that really impacted a lot of the sales we saw for our sector last year, so it is really good to see that change.’’
Auckland, Wellington, Canterbury and Waikato clocked more than $1b each in sales last year, with the biggest increase in sales recorded in the QueenstownLakes region, up 13%. That was followed by a 9.7% increase in Taranaki.
Kaiko¯ura and Southland experienced a decrease in hospitality sales in the year, down 9.4% and 1.7%.
Overall, Bidois said the hospitality industry was on the road to recovery, but short access to skilled labour had forced many businesses to continue to operate reduced hours of trade.
‘‘If we see another solid 12 months of trading we will certainly be on the way to saying we have recovered,’’ Bidois said. ‘‘There is definitely more optimism within the sector and revenues are tracking well, but the single biggest issue is access to skilled labour. Unfortunately, staffing levels are at crisis point with many of our businesses unable to access the labour they need and that ultimately impacts our ability as an industry to clawback some of that lost revenue from previous years. We need the right staffing levels to be able to maximise on the opportunities that are there at the moment.’’
Hamilton cafe and eatery owner Lisa Quarrie, co-owner of Hayes Common and Weave Eatery, is one of thousands of hospitality businesses having to work smarter to get around staffing issues.
The 35-person team is shared
between the two venues and is at least two people short.
Because of inadequate staffing, Quarrie and her husband and business co-owner Brent have had to reduce both venues’ hours of trade to make sure the staff they do have are not overworked or fall ill.
Each business is open just five days and all staff have two days off in a row.
‘‘There’s lots of ways of attracting people and, of course, bigger businesses can throw around larger sums of money, but for us as much as we have reviewed all of our pay and wages for staff, we are also trying to be aware of what else we offer and promote that as more of a balanced approach.’’
Quarrie says hospitality has been typically seen as an industry with little work-life balance, so she was working hard to ensure the businesses offered that in its employment terms to attract and retain staff.
‘‘We have seen a real benefit in terms of how our people feel at work and how they are coming into work.’’
The businesses were in dire need of kitchen staff, and found it hard to get people in to do trials.
Quarrie said her hospitality group aimed to become an accredited employer so it could recruit staff from overseas. She said 90% of job applicants she received were from people based overseas.
‘‘That is going to have to be how we make things work because the labour market isn’t going to change in a hurry – there will be people coming in, sure, but it will take some time, and Hamilton is generally not the most desirable first place destination for people coming into the country.’’