Hospitality Association Chief Executive Julie White is warning that the Red Traffic Light setting is driving the hospitality sector to the wall. “Half the hospitality sector has seen a fall in revenue of over 40% under the Red settings. Half the sector thinks they will have to close venues within three months. This will worsen over the next few weeks as Omicron infection increases,” says White.
“Most widely-recognised hospitality brands and businesses will get through this period, but they tell us the Omicron period is uniquely challenging.”
The Association is calling for the resumption of the Wage Subsidy and the Resurgence Payment, reduction of stand-down periods and ability to use RAT kits to manage staff and customer safety.
It also released a very moving video featuring operators talking candidly about the challenges of operating under Red Light setting.
Lone Star hangs tough
Paul Steiner, Operations Manager, Lone Star NZ, says its brand will ensure the chain survives. “But it is tough. We are experiencing erratic revenues, on top of last year’s enormous challenges. It is the compounding nature of this situation that is a real challenge for all.”
Business under Red settings and Omicron is being likened to Level 3 settings with the dining room doors open.
“Our guests’ mindset has changed. They’re not optimistic. They’re very wary. Just one local Omicron case can stop multitudes of them going out. The usual patterns of our trade have been very disrupted this year.
We will navigate through the next two to three months like we have the last two years. But that will be too much for a great many of our industry peers without financial support in our sector to cover losses, and without loosening operational rules to help us all stay open. Empowering all businesses to deploy monitored Rat kits is a common-sense initiative to minimise business interruption which we support.
Many have already changed everything they can to continue in business from selling assets to bank borrowings to cover mounting costs. It is frustrating for everyone to have worked so hard in support of the Health response strategy, and still the end to restrictions isn’t coming.”
Arts and culture Omicron package should be extended
White has previously said that every reason the Government has given for its arts and culture financial relief package applies to the whole entertainment, events and hospitality sector.
“The Government has been actively engaging with the hospitality sector to understand its needs as the pandemic has progressed and should now be responding by delivering much-needed financial relief,” she says.
The Government justified the financial assistance on the basis that the arts and culture sector contributes approximately $10.9 billion to the New Zealand economy, making up about 3.4% of GDP. Hospitality’s contribution is $6.8b, plus an additional $14.6b via purchases from suppliers and staff spending. In fact, some of the arts and culture GDP contribution is made from performances and exhibitions held at hospitality venues.
“We’re confident that renewed critical support schemes like the wage subsidy and resurgence payment for hospitality will provide some relief and help our wonderful communities of socialisation, entertainment and culture to get back on their feet,” she says.