The data is In: hospitality revenue still In free fall

by | Feb 11, 2022 | News

Recent Eftpos data has been released showing a 30% decrease in transactions in January, with hospitality being one of the hardest hit sectors. The Restaurant Association is urging the public to continue dining out as a result, with concerns the recent shift back to a red setting is impacting bookings and traffic.

“Whilst the red light setting is still a green light for diners, sadly the government modelling and current messaging is having the adverse effect on patronage,” said Marisa Bidois, CEO of the Restaurant Association.

Hospitality businesses are reporting a 30 per cent decrease in year on year revenues according to the latest figures from the Restaurant Association. This is on top of a 30 per cent revenue reduction year on year in 2021, so a decline of 60 per cent against pre-pandemic figures.

A survey conducted in the last week of January 2022 shows 55 per cent of respondents have experienced significant reductions in revenues as a result of the Omicron outbreak.

  • 55 per cent of those surveyed had experienced increased cancellations; 88 per cent a downturn in customer patronage, and 74 per cent had noticed increased customer hesitancy to dine out.
  • 59 per cent of respondents said that business on Auckland anniversary weekend was either slow or extremely slow.

Paul Day from Machete Coffee says “The day after the move to Red traffic light, we had an immediate 75% decline in revenue, as most of Wellington CBD chose to work from home. The full week decline remains at 60%decline with no indication people will return to offices until Orange level.”

Gail Hunter of Papa’s Italian Eatery adds “Support should be given by Government when we are in Traffic light systems where we are restricted from running our business fully. The health department also discourages people from restaurants in the media by saying they are dangerous for Covid-19. It has been two years of hardship in COVID and we are still restricted. When is it going to end? How much do you borrow? How do you plan ahead?”

Rene Beijer of Thirty Nine Café says “Rent reduction, rates relief, tax reduction as we’re not buying stock to pay wages as we’re down 30% so we have to pay gst but we haven’t made enough revenue to cover staff wages. The fear has taken over and is causing people to stay at home which has killed trade. No support is gutting us. There’s a feeling of just hold on well we’re holding – reducing hours and not opening on slow days just to try and attempt to break even.”

Auckland branch president and owner of four Auckland restaurants Krishna Botica has temporary closed one business “Our revenue is less than last year which was down on the year before. It’s dire. We are down 50% on where we should be. Pain points are everywhere. We worry that we will lose people from the industry over this.”

“Our businesses have some of the most rigorous operating settings out there with vaccination mandates for both staff and diners as well as mask mandates and distancing between tables when customers are dining in,” says Bidois.

“Many of our businesses spent extended periods of time closed last year so we really need people to get the message out there that hospitality is 100 per cent open for business and safe, so long as everyone follows the guidelines.

“Our industry cannot work from home and we still await feedback from Government on financial assistance for businesses that need to close as a result of positive cases among their workforce or as a result of exposure via a customer.

“71 per cent of our members are now reporting that their mental health and wellbeing is suffering as a result of the impact of COVID-19 on their business

“We know from the Omicron outbreak in other countries that the spread of this variant has caused a lot of uncertainty for businesses who are closing because of staff shortages as a result of exposure. We believe that businesses will need financial support to work through this new variant.”

“We would like to see a reintroduction of the wage subsidy and resurgence payments for those business most impacted by the restrictions.

The Restaurant Association is calling on Kiwis to ‘dine out to help out’. An online portal has been set up at  www.dineouthelpout.co.nz where hospitality businesses can download education resources for their establishments and diners can check out guidelines for safe dining during the red traffic light setting.

 

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Peter Wright

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