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May data shows rate of recovery for hospitality business

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Changes to discretionary spend and labour shortages top concerns for business owners

Revenues for May show the industry is starting to recover according to member feedback from the Restaurant Association.

The latest stats from the Restaurant Association show that trade was down on average 18 per cent for almost two thirds of members, compared with the same period in 2021 when the country was at alert level 1. This is up on April where the average reported yoy revenue drops were 23 per cent, showing that the industry is starting to recover.

Almost one quarter of respondents to the survey of Restaurant Association members reported increased revenues of on average 13 per cent above 2021 sales.

However, as industry sales continued to regain lost ground, recruitment challenges were widely recognised as a critical factor affecting the industry, with staff shortages forcing businesses to operate at reduced capacity.

Employers also want to see more done to tackle inflationary pressures, with initial impact already being felt through adjustments to customer discretionary dollar spend.

“Hospitality continues to show resilience,” said Marisa Bidois, CEO of the Restaurant Association. “It’s been a tough couple of years and whilst trade has picked up there are still a number of factors that will continue to have an impact on the industry. The future of work will be hybrid so we do not expect there to be a full return of workers to our city centres.

“On top of that the increase in cost of living for diners and cost of raw materials and labour for our industry is likely to have an impact on discretionary spend. Businesses are facing increased costs across the board and with two years of accumulated debt to repay, our sector is certainly not out of the woods yet.

“With worker shortages being a major issue facing the industry, the changes to the worker visa accreditation paperwork is also playing heavily on the minds of our businesses who are concerned about the increased costs and criteria to enable them to access the overseas workforce they need.

“We support the findings and recommendations outlined by the Productivity Commission report – Immigration – fit for future – which acknowledged the vital role immigration plays in economic development.

“What remains to be seen is whether the recommendations will be adopted by Government. As always, we welcome the opportunity to work with government in creating immigration policy settings suitable for New Zealand’s long-term economic growth are developed.”

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