The Shiel Hill Cafe and Bar served its last food and drinks last night. The closure came only a month after the city's Southern Bar and Grill closed its doors.
Shiel Hill owner Tony Cutler was upset about the closure, saying he had put a lot of effort into keeping the business afloat, but it had failed to make money.
Hospitality New Zealand board member John McHugh said he had been in the suburban/community hotel business for more than 30 years, and believed closures in the sector were becoming increasingly common.
''Year on year for the last three years, we've had closures of about 10% of country and suburban hotels across New Zealand. It is a worrying trend.''
Places with cafes and restaurants had been hit surprisingly hard, he said.
''The traditional hotel meal has been seen as value for money, and of course the offset of that was, when you were mixing the meal with a bottle of wine, you were getting a couple of dollars on both sides.
''Now, a lot of restaurants are telling me that where they used to sell a bottle of wine with a dining experience, if they sell a glass of wine they are lucky. It's more than likely they [customers] will just have the free water.''
The lowering of breath alcohol limits had the greatest impact on the industry, Mr McHugh said.
There were a lot of pubs in the city centre attracting patrons because it was easier to get a taxi home, but the lack of public transport in suburban areas and the length of waiting time for taxis in suburban/country areas was a turn off for many patrons, he said.
Mr McHugh said people's attitudes to drinking and driving were changing.
Rather than socialising in public, more and more people were doing it in their own homes.
''People do things differently nowadays.
''A lot of people have their own private games rooms and bars set up, where they don't have to be so compliant.
''They can pick up a big screen TV for very little, they can buy cheap alcohol at supermarkets, and the take home market and the party market seems to be the way the new generation is going.
''Alcohol consumption is not down. It's just where they are partaking that is changing.''
