Hospitality Sector Looks To Big Easter As Survey Shows Earnings Down At Least 25% For Many Over Summer

The hospitality sector is looking to a big Easter weekend for a boost in earnings after a very disappointing summer.

A survey of Hospitality NZ’s 3000 members has revealed that nearly two-thirds had a revenue drop of at least 25% over summer as the borders remained closed.

Of those, 39% said revenue was down 50% or more compared to the summer of 2019/20. In total, 82% of respondents to the survey said revenue was below the previous summer.

Hospitality NZ represents the whole hospitality sector, which includes cafes, bars, restaurants and accommodation providers.

Chief Executive Julie White says businesses are hoping Kiwis will be travelling and spending and help the sector make up for a disappointing holiday period.

“Cafes, restaurants, bars and accommodation providers all around New Zealand were pinning their hopes on a good summer to make up for a terrible 2020, but it didn’t happen for most.

“Summer wasn’t the silver bullet most were hoping for, and I fear what’s to come with winter on the way. How many businesses already weakened by months of no international tourists can recover from such revenue drops?

“We’re pinning our hopes on a strong Easter as the last big break between summer and winter, and we’re encouraging Kiwis to get out and have a great time and help out our struggling businesses at the same time.

“I’m seriously worried about the mental wellbeing of many members. They are beyond frustrated. They’re constantly stressed.”

While a big Easter would make a difference, what the sector desperately needs is a trans-Tasman bubble as a matter of urgency.

“It’s time we learned to live with a bit of risk – businesses and livelihoods will suffer if we don’t.

“Businesses are closing every day our borders remain closed, and a trans-Tasman bubble will be the lifeline many need. They’re all hurting and need action now.”

Respondents to the survey, which was conducted from February 16-22, comprised 60% accommodation providers and 40% food & beverage. Some 47% were small business owners, 44% medium, and 10% large. Some 77% were single-site venues.

Results from the poll:

• 39.1% said their summer revenue was down 50%+ compared to summer 2019/20

The biggest challenges

• “Lack of visitors” was identified by 70.3% as the biggest challenge over summer
• “Staff” was the second most identified challenge, by 37.6%
• “Reduced average bill spend” was the third most identified, by 21.8%.

Staffing

Those who identified staffing as the main challenge were asked what the main cause was. Of them:

• 46.1% said “challenges around visa requirements”
• 44.7% “lack of skills”
• 32.2% “expectations around wages”

Cashflow

Respondents were asked what was the main challenge for business following changes in alert levels:

• 63% said “impact on cashflow and working capital”
• 55.7% “significant downturn in patronage”
• 54.9% “uncertainty surrounding length”
• 53.9% “lost reservations”

Outlook for 2021

Respondents were asked what was the biggest problem looking to the remainder of 2021:

• 63.8% said “lack of visitors”
• 49.3% “border closure”
• 49.3% “lack of cashflow”
• 42.6% “cash reserves running low”

Business plans

Respondents were asked what their business plans were for the year:

• 65.2% said they would stay in business as is

Government demands

Respondents were asked what was their biggest ‘ask’ of the Government:

• 50% said “halting the minimum wage increases”
• 44.2% “support for fixed business costs like rents or leases”
• 35.4% “active lowering of compliance costs”

About Hospitality New Zealand

Hospitality New Zealand is Aotearoa’s leading nationwide hospitality industry association covering commercial accommodation and food and beverage businesses. It is a not for profit organisation, which currently supports over 3,000 members across the country. The association was first formed in 1902 as the United Licensed Victuallers Association, and has consequently been helping New Zealand’s small businesses and communities for over a century.

To find out more, visit www.hospitality.org.nz, or connect with Hospitality New Zealand on Twitter, Facebook, Instagram or LinkedIn.

© Scoop Media