The industry has faced hard times over the past few years and Dunedin hospitality operator Andre Shi said it was getting tougher.
The industry took a further blow this week when long time Octagon restaurant-bar CBK, formerly the Terrace Bar, went into liquidation.
Though full details were yet to be revealed, Mr Shi said it was a blow to the industry.
Mr Shi said he was very sorry to hear of the establishment’s demise, operator John Macdonald had been a stalwart of the industry in Dunedin.
‘‘It is tough, getting tougher.
‘‘All costs have gone up, including labour costs, product costs.
‘‘We now have a fuel surcharge and all the other things as well.
‘‘Over the last few years, all the product costs has gone up significantly.’’
Those increased costs were not able to be passed on to customers, he said.
‘‘At the moment it’s price sensitive.
‘‘If we put a price up, people will probably stop going out as well.’’
The last good year was 2023 and people had become very, very sensitive to prices since then, he said.
Mr Shi’s company operates six different bars around the wider Octagon area.
‘‘There’s no magic way at the moment to make money especially in hospitality.
‘‘Business is still pretty steady compared to previous years.
‘‘However, just the costs keep coming up and we don’t be able to pass that on.
‘‘So our profit margin has been going down quite a bit year by year.’’
Events were the key to hospitality, especially in Dunedin during winter, he said.
Graduation last weekend and this weekend gave a real boost.
‘‘All the graduations and concerts, especially All Blacks test match weekends and Super Rugby, all of those events helps a lot.
‘‘It is a bit of shame this year there’s no All Blacks test.
‘‘I have heard the curtain is coming on in the stadium and hopefully we can attract a lot more, you know, slightly smaller scale, but a lot more frequent, events coming to Dunedin.
‘‘We do have a big influx of people, tourists and visitors come into the city and they come in to spend money, to have a great time.’’
There had been a big drop in corporate traffic, in what was a competitive market, he said.
The Octagon was busy in the weekend but was quieter during the week as there were not as many conferences.
Queenstown was a rival in this market and also Christchurch had a real buzz about it these days, he said.
It could be turned around in Dunedin but everyone needed to work together from the council to Enterprise Dunedin and other businesses, Mr Shi said.
