Hospitality roadmap needed after 1000 businesses perish

Tourism and hospitality operators are already reporting cancellations as a result of the shift in...
The hospitality sector has been hit hard by the lockdown and alert level restrictions. Photo: Getty Images
The Restaurant Association has unveiled stage one of a roadmap to help the industry survive and thrive after the Covid-19 crisis.

Chief executive Marisa Bidois said there have been about 1000 hospitality business that closed in New Zealand since the beginning of the pandemic in March last year, representing the loss of about 13,000 jobs.

And the organisation is expecting the fallout to be "significantly higher" in the next few months following the recent Level 4 lockdown.

Stage one of the "Future of Hospitality Roadmap" focuses on reopening and sets out the immediate steps needed to support the full reopening of the sector over the short-term, in line with broader Covid-19 pandemic developments.

In a submission to Finance Minister Grant Robertson last Friday, the Restaurant Association put forward eight practical solutions to get businesses back on their feet.

Among them is the industry's call for the Government to continue the wage subsidy in level 2, a continued "lockout subsidy", a one-off "reopening payment", and various vouchers and incentives to encourage customers to support their local businesses.

The lockout subsidy would provide businesses unable to operate a payment equal to 50 per cent of their average weekly sales in a level 1 week.

Stages two and three, still under review, would focus on recovery and sustainability and outline guidelines for a profitable and sustainable hospitality business model, Bidois said.

"While a flat rate payment could see businesses disproportionately subsidised, officials reviewing the applications would have the discretion to decline applications where the evidence of attempted food donation does not reflect the support payment applied for," Bidois said.

A couple of campaigns to stimulate the economy were modelled based on a foreign government, she said. There would also be a campaign to "Dine out to Help Out" and a "Dine and Discover NZ" campaign.

"The Association proposes a homegrown version run in a similar fashion to the UK's ["Eat Out To Help Out" campaign] across in-house dining at alert level 1. This would see a discount of up to $20 per person, per bill applied to food only."

"The Dine & Discover NZ" initiative is modelled off New South Wales' consumer-driven "Dine & Discover NSW" campaign.

This hospitality support initiative would run in a similar fashion, across in-house dining at appropriate alert levels. "This option would see every person over the age of 18 years eligible to receive four $25 vouchers (totalling $100) to put towards a meal," she said.

Another proposal was a Government-supported "The Eat GST-Free" consumer-driven hospitality support initiative, which would see customers discounted the GST portion of a total hospitality bill.

"This option would be less expensive for the Government to enact, allows consumers to create the market, is easy for businesses to execute and is an easy concept for consumers to understand."

The Restaurant Association is also working with councils and local business associations to cut red tape, have licenses and registrations extended and make it easier and quicker for businesses to operate outdoors.

"Hospitality businesses continue to experience a disproportionate material impact on revenue as a direct result from the alert level guidelines.

"By and large, alert level 4 settings see hospitality businesses suffer a 98 per cent drop in revenue, while alert level 3 see a revenue drop that fluctuates between 40 and 60 per cent," Bidois said.

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