Hospo industry needs targeted support to survive lockdown, say sector leaders

Jacinda Ardern’s decision to leave lockdown levels unchanged will result in more hospitality and accommodation businesses collapsing or being irreparably harmed – unless the Government comes up with a targeted payment for the industry, says Hospitality New Zealand.

“This is devastating. It will be like a slow death for many businesses across the industry,” says Jacinda Ardern’s decision to leave lockdown levels unchanged will result in more hospitality and accommodation businesses collapsing or being irreparably harmed – unless the Government comes up with a targeted payment for the industry, says Hospitality New Zealand, CEO Julie White.

“With changes to indoor settings in Auckland being Step 3 in the Government’s transition plan, it seems hospitality there will see no significant changes for three or four weeks – or longer – and many will not survive that long without help.

“I’m hearing from many who say they will not last another week – let alone three or four – without support.

“Weekly reviews leave so much uncertainty, and there are many sleepless nights ahead for hospitality and accommodation operators.

“We know we must be very careful with Delta, and we agree restrictions are needed, but many businesses in Auckland are on their last legs, and it’s only a little better for those outside Auckland.

“We welcome the removal of the cap on seated and separated patrons in venues under Level 2 in the rest of New Zealand, but in reality, that will affect just a few. For the vast majority of businesses, little will change.

“Every day businesses cannot trade at anything close to normal is a day closer to them shutting their doors for good. That means family businesses and jobs lost.

“These businesses need targeted support from the Government.

“These are people who have done their bit throughout this pandemic and the Government seems to not be recognising by offering material support.

“This industry has been the most compliant of all industries despite being the hardest hit.

“Unlike most other sectors, ours has been the first into and the last out of all Covid levels.

“We’ve also been the hardest hit. Credit defaults surged by 11% just before the latest lockdown, to the highest value since the start of the pandemic, while business failures doubled in the quarter preceding the lockdown.

“None of this will come as news to Government Ministers.

“We’ve been warning them of this looming disaster for many weeks, in meetings and in writing.

“We’re still waiting for a response to suggestions for support we presented to them in the middle of September. They included:

  • Making the wage subsidy available to all hospitality businesses at level 2 as long as the business can show their revenue is down by at least 40% times
  • Paying the Resurgence Support Payment more frequently to businesses impacted more by the lockdown at level 2 and higher. Where revenue is down 71%-100%, the payment can be claimed on a weekly basis; 51%-70%, every 2 weeks; 30%-50%, every 3 weeks
  • Issuing Targeted Travel Vouchers, which would be funded centrally and allocated regionally to stimulate targeted regional support where, when, and to the businesses/sectors who need it

“We also proposed a focus on personal health and wellbeing by way of Government funding a national wellbeing service for hospitality operators similar to other industries such as construction.

“The hospitality workforce is under enormous stress from uncertainty and financial concerns resulting in mental toll, fatigue and depression, and that would go a long way to helping people cope.

“Without the kind of targeted support we have suggested, I fear for the livelihood and mental health of many, many businesses, families and employees across New Zealand.”