One of the Restaurant Association’s focus areas in 2017 has been to work even more closely with Government as an influencer on policy. Recently it’s been particularly important for us to strongly represent the hospitality industry’s viewpoint in light of challenges from a number of areas to the way we do business.
The Restaurant Association’s 2017 Election Manifesto summarises the key issues and challenges for the hospitality industry and what we are asking Government to address, or work with us on, to ensure that our hospitality businesses remain viable, today and into the future.
The hospitality industry is a $9 billion per year industry that employs over 120,000 employees across 17,000 businesses1.. The service sectors as a whole contribute $47.8 billion to New Zealand’s GDP2.. We are a powerhouse of New Zealand’s economy! It is also important to highlight, however, that the businesses that make up the hospitality community are predominantly small to medium sized enterprises (SME’s) with owner / operators working in their business’ 24 / 7. With infinitesimally fine margins when it comes to managing the major costs associated with running a hospitality business, making a profit in this industry is tough.
While running a hospitality business is demanding, these businesses demonstrate an unwavering commitment to their communities in good times and bad. Perhaps no other industry has deeper community roots. People turn to our businesses each day for sustenance, support and socialisation and we give back to our communities, improving the quality of life for those we serve.
The Restaurant Association has sourced the opinion of our members to find the common challenges for the hospitality industry throughout New Zealand and these are the things that we advocate to be a focus for any incoming Government – policies that encourage our industry’s continuing success.
Our efforts are concentrated on the following areas:
- The Restaurant Association wants better recognition from Government for the significant impact that hospitality has on New Zealand’s economy and the integral part that it plays in tourism. The Association is calling on Government to invest in initiatives that are specifically targeted to support the growth and recognition of this industry on a global platform.
- We are working hard to encourage hospitality as a career pathway of choice, however more work needs to be done and the Restaurant Association welcomes the opportunity to work with Government on initiatives that inspire young New Zealanders to choose hospitality.
- Despite the policy makers’ argument to the contrary, the hospitality industry currently suffers from a labour shortage. We rely on skilled workers from overseas to fill the void. When no suitable New Zealanders are available strategies that ensure migrant workers can continue to be a part of the hospitality mix are important. The Restaurant Association welcomes the opportunity to work with Government on immigration policy that recognises the industry’s needs.
- There is widespread use of card payment for goods and services received by consumers when dining out in the hospitality industry, however the fees associated with accepting these cards are a significant, and increasing, cost to running a business. The Restaurant Association is looking for some regulation of New Zealand’s payment system by Government to ensure an efficient and transparent system that benefits both consumers and merchants.
- Our Association contributes to educating migrant and kiwi business owners to be not only compliant in their business but to be achieving best practice targets. Businesses that are exceling in all areas of business management should receive recognition for this achievement. The Restaurant Association supports the foundation of a programme to measure business best practice, which in turn rewards the business elite who have achieved distinguished levels. We welcome the opportunity to open this discussion with Government.
ISSUE 1
- The Restaurant Association wants better recognition from Government for the significant positive impact that hospitality has on New Zealand’s economy and the integral part that it plays in the tourist experience.
With almost $10 billion in annual sales and annual growth of 8.2 per cent (2016-2017)1. the hospitality industry is a much talked about segment of the tourism story. Our vibrant hospitality scene is a vital component to attracting tourists to New Zealand as more of our businesses gain recognition internationally for their innovation and expertise. Every single visitor to New Zealand consumes our food. Every aspect of New Zealand food, from production to tourism recognises the importance of connecting with the people who eat our food, however, we need help to take advantage of additional opportunities to promote our achievements and the New Zealand food experience.
The tourism industry as a whole receives up to $25 million each year ($100 million committed over 4 years) as part of the Tourism Infrastructure Fund. This Fund, in partnership with local Councils, provides funding for the development of tourism-related infrastructure such as carparks, freedom camping facilities, sewerage and water works and transport projects. However, these funding initiatives do not extend to the hospitality industry.
The Restaurant Association would like assistance from Government through investment in the industry to provide funding initiatives specifically targeted to hospitality. In particular, funding will help the industry to capitalise on opportunities to recognise our achievements on a global stage.
In addition, as part of our focus to increase recognition for the hospitality industry, the Restaurant Association is leading a campaign to provide better visibility of our industry’s tourism contribution. Where “tourism” is used we would like this to be identified as “hospitality and tourism”. Instead of a Minister of Tourism, this should be the Minister for Hospitality and Tourism. This campaign endeavours to appropriately recognise the place that hospitality has in overall tourism strategy.
ISSUE 2
- We are working hard to encourage hospitality as a career pathway of choice, however more work needs to be done and the Restaurant Association welcomes the opportunity to work with Government on initiatives that inspire young New Zealanders to choose to enter our
The hospitality industry is one of the country’s largest employers, currently employing over 120,000 employees. Due to the burgeoning nature of the service sectors it has also been noted that another 200,000 workers will be needed across the service industries between now and 20202., with a large number of those needed to enter the hospitality industry. However, hospitality is not widely promoted as a career pathway of choice through the education framework. To meet employee demand there is a continued need for quality training and education. There are increasing concerns we will not be able to adequately staff the sector unless we change perceptions and promote hospitality and tourism as a viable and fulfilling career.
The Restaurant Association works on a number of initiatives that promote recruitment and retention in hospitality. One of these programmes is the Association’s ProStart programme. In partnership with the Ministry of Social Development and created through consultation with the hospitality industry, ProStart introduces students to the basics of hospitality. We train beneficiaries over four weeks to ready them for work (or get them back into work) in hospitality, with an overall goal of employment upon completion. Trainee participants gain valuable insight into a career in the hospitality industry and acquire key skills for entering employment and further education in our industry. The programme also assists Government to achieve its objective to reduce unemployment rates.
Attracting more New Zealanders into the industry is vital to our future. Further investment in platforms like the ProStart initiative are needed by Government to ensure broader reach to those joining, or re-joining, the workforce. The Restaurant Association welcomes the opportunity to work with Government to implement further projects, with our overall objective being to encourage hospitality as a career pathway of choice.
ISSUE 3
- The industry currently suffers from a labour shortage. We rely on skilled workers from overseas to fill the void. When no suitable New Zealanders are available, strategies that ensure migrant workers can continue to be a part of the hospitality mix are important for the development of our vibrant industry.
There are currently not enough people to fill positions in the hospitality or tourism industry. With a further projected 1.4 million visitors over the next 6 years, the demand for workers will increase.
As outlined above, the Association is committed to work on initiatives that fulfil Government’s objectives around attracting more New Zealanders to work in hospitality; however, currently migrant workers are an important part of our workforce. Immigration policy should enable the efficient functioning of the labour market and not disadvantage hospitality businesses. The industry is predominantly composed of small owner / operator enterprises which are not equipped with HR departments to manage complicated, time consuming and costly administrative processes.
Almost 20 per cent of the hospitality industry’s employees hold work visas, so ultimately a temporary work policy must not work against the needs of a flourishing industry, nor inhibit business growth and competitiveness.
The Restaurant Association welcomes the opportunity to work with Government and will continue to advocate for a more sensible approach to immigration policy – one that encourages employment of New Zealanders first and foremost, but which recognises the value of utilising migrant workers to facilitate skill shortage needs.
ISSUE 4
- There is widespread use of card payments for goods and services received by consumers when dining out, however the fees associated with accepting these cards are a significant, and increasing, cost to running a business. The Restaurant Association is looking for some regulation of New Zealand’s payment system by Government to ensure an efficient and transparent system that benefits both consumers and merchants.
The Restaurant Association welcomed the discussion by Government in 2016 and earlier this year on New Zealand’s retail payment systems. This discussion addressed whether consumers and merchants are benefiting from ongoing innovation, whether card payment systems are being used efficiently and whether consumers and merchants are bearing a fair share of the costs.
Over the past several years, New Zealand has seen a significant change to the way consumers make their purchases. There has been increased credit and debit card use, and declining use of EFTPOS and cash. In New Zealand we are rapidly heading towards a cashless society. This is leading to increased costs for merchants and as credit and contactless debit card use increases it is likely we will see merchant service fees raised even further.
Another issue with the current payment system is that the costs of the system in New Zealand are not transparent which limits participants’ ability to make informed choices about payment options. The interchange rate is not disclosed to merchants although this forms the basis for merchant rate hikes.
Internationally a number of countries have moved to regulate the payments industry and as a result New Zealand merchants pay substantially more to process credit and contactless debit card transactions than their counterparts in markets such as Australia and the UK (on average New Zealand merchants pay merchant service fees of around 1.4%, while in Australia it is around 0.85%, according to estimates by COVEC and data from the Reserve Bank of Australia).
The Restaurant Association supports the introduction of interchange regulation and in particular a requirement for full disclosure, to bring the level of transparency in line with other international jurisdictions. This will work to ensure the payment system delivers good outcomes for consumers and merchants.
ISSUE 5
- The Restaurant Association contributes to educating migrant and kiwi business owners to be not only compliant in their business but to be achieving best practice targets. Businesses that are exceling in all areas of business management should receive recognition for this achievement. The Restaurant Association supports the foundation of a programme to measure business best practice, which in turn rewards the business elite who have achieved these distinguished levels. We welcome the opportunity to open this discussion with Government.
There are a number of mechanisms already in place to measure compliance with New Zealand law. In hospitality this includes compliance with employment law, health and safety, food safety, immigration law, the sale and supply of alcohol, financial obligations and local Government regulations. However, the Restaurant Association encourages the development of a programme that recognises those businesses who want to do more than simply be compliant; that want to set and reach best practice measures. These businesses essentially save the Government money through the limited involvement or intervention that will be required by Government bodies to ensure they are “doing the right thing”.
A survey of Restaurant Association members found that a programme that recognises and rewards businesses that are achieving the highest levels of compliance would be well supported. Rewards could come in many different forms, including compliance fee discounts, consumer recognition, subsidies or fast-tracked application approval in certain cases.
The Restaurant Association welcomes the opportunity to work with Government to develop and implement measures to recognise those businesses who have adopted the highest levels of best business practices. A programme such as that which we have recommended will encourage and raise the bar for New Zealand business owners.
Whatever outcomes we see as a result of the September election the Restaurant Association will be strongly advocating on the industry’s behalf for strategies that address the needs of our flourishing industry and promote economic and business growth. We look forward to discussing these initiatives further.