The Restaurant Association of NZ and Lead Sponsors Trents Wholesale & RA Lexis ComplyHub are excited to announce the Queenstown Hospitality Awards 2021 Finalists!

The finalists represent the top-notch dining establishments in the city as voted by the hospitality industry.

Thank you to all our Sponsors for supporting the industry and making it all happen…

This article was first published in the March 2021 copy of Savour Magazine.

Managing your bottom line, labour and food costs will become even more important with the increase in the minimum wage this year.

Chandni Sahrawat, owner and director of operations for Sidart, Cassia and Sid at The French Café shares her insights on the importance of business health checks to keep your business running smoothly.

Twelve years ago when we bought Sidart, our first business, we were so green, but we were fortunate to have our investor mentor us. Our mentor taught us that a weekly business health check is one vital thing you can do to ensure you know how your business is doing.

What does a weekly health check look like for your business? How long does it take and why should you do it? A weekly check should include revenue calculation, bank reconciliation, calculating the wage cost and food and beverage costs. The whole exercise may seem tedious at first but should take no more than 30 minutes and is absolutely essential to business sustainability.

Making sure daily cash ups match remittance in bank and cash deposits adds a level of security to your operations and makes management accountable. If there is a variance, you can quickly pick it up and investigate. Was there a refund issued? Why did staff have to refund a transaction? Was a customer overcharged? Promptly identifying issues and addressing them with staff and customers leads to better customer service.

There is a general formula for business profitabilty in the hospitality industry. Wage and food costs must be at 30% of revenue so that you have 40% for operating expenses and profitabilty margins. Plugging your weekly revenue and then subtracting GST from it will give you a net revenue figure to then work out a percentage of your wage cost and food and beverage costs.

If your food cost (invoices for produce that week) and your beverage cost (invoices for beverage purchases that week) are higher than 30% you might want to assess why this may be the case. Is there a seasonal fluctuation in price of an ingredient? Was too much food ordered, resulting in food waste? Is your menu underpriced? Could you increase prices if the ingredients are competitively priced, or do you renegotiate with your suppliers for better pricing?

Sometimes food and beverage costs increase for valid reasons, such as reopening after a closedown (as you need to restock), busy periods and special events, but if the food and beverage costs remain high over a couple of weeks and you cannot justify them, then this is a symptom that needs to be addressed.

Wage costs are calculated on the total gross salaries paid to your employees that week. In order for your wage cost to be accurate, remove any annual leave payouts from your calculation but leave sick leave payouts in the calculation. The figure you want to work with should reflect the cost of your employees or team working that week.

Annual leave is deducted as it is based on work done for previous time periods and sick leave is not deducted, as if a staff member is sick that week, someone else needs to fill in for them and that is a cost to the business. If your wage cost is higher than 30% you should know the reason why. Was there a public holiday that week? Were a lot of staff sick? Were sales lower? Increased wage costs over a period of time should ring alarm bells. Either sales need to sustain the number of staff you have or you will have to reduce staffing levels to make the business sustainable. Consider the number of salaried staff versus staff you have on hourly wages and see if you can restructure your team to improve the wage cost. If the wage cost is consistently low, albeit a positive sign, it also shows that there is room to pay staff more or increase revenue by recruiting additional staff members, perhaps.

In our current economic climate, staff retention is crucial to business success, good staff make the backbone of our industry. Without our staff, we can’t run kitchens or provide good service to diners. Retaining key staff by paying competitive rates and passing on tips in full to reward their hard work will create a happy, loyal team, increase productivity and therefore revenue.

Good practice dictates yearly performance and pay reviews for staff as a minimum. Weekly business health checks will guide you in making the best decisions for your staff and your business.

Spending 30 minutes each week checking the vital stats of your business, especially as we navigate through these uncertain times, is crucial. It is like checking the temperature and treating any symptoms before they turn into an illness. Sustainable businesses have healthy bottom lines but also happy staff and repeat customers.

Minimum wage rates are reviewed every year. From April 1 2022 the current rates are:

From 1 April, 2022, the adult minimum wage rates (before tax) that apply for employees aged 16 or over are:

• $21.20 an hour; which is:
• $848.00 for a 40-hour week

The minimum rates that apply to starting-out workers, and employees on the training minimum wage (before tax), are:

• $16.96 an hour; which is:
• $678.40 for a 40-hour week

There are three minimum wage rates:

• The adult minimum wage applies to all employees aged 16 and over who are not starting-out workers or trainees, and all employees who are involved in supervising or training other employees.
• The starting-out wage applies to starting-out workers. Starting-out workers are:
  • 16- and 17-year-old employees who have not yet completed six months of continuous employment with their current employer.
  • 18- and 19-year-old employees who have been paid a specified social security benefit for six months or more, and who have not yet completed six months continuous employment with any employer since they started being paid a benefit. Once they have completed six months continuous employment with a single employer, they will no longer be a starting-out worker, and must be paid at least the adult minimum wage rate.
  • 16- to 19-year-old employees who are required by their employment agreement to undertake industry training for at least 40 credits a year in order to become qualified.
• The training minimum wage applies to employees aged 20 years or over who are doing recognised industry training involving at least 60 credits a year as part of their employment agreement, in order to become qualified.

Boarding call for Auckland hospitality. Brace yourself, leave your luggage behind and dress for your dream destination!

The 2021 annual Lewisham Awards will be held this year on 6 June at the Cordis Hotel. The event will be a sell-out with amazing entertainment, food stations and quenching beverages.

Nominations are now open, nineteen awards are to be won and you decide who the hospitality stars are raising the bar yet again. Let’s recognise the “highflyers” of our industry that go the extra mile. Have your say and nominate the best of the best in Auckland Hospitality here.

Tickets are also now on sale – this is a sell-out event – first in, first served! To attend the 2021 Lewisham Awards on Sunday 6th June purchase your ticket here.

A huge thanks to the 2021 Lewisham Awards generous sponsors. The support from sponsors and the voice of our peers ensures our hospitality stars are recognised and celebrated.

Visit www.lewishamawards.co.nz for more information and connect with the Lewisham Awards on Facebook and Instagram.

EVENT DETAILS:

• When: Sunday 6 June 2021
• Time: 6pm – 12am Ticket price: $75 per person
• Where: Cordis Hotel, 83 Symonds Street, Grafton, Auckland
• Attire: Dress for your dream destination
  

Our 2021 hospitality awards schedule has been announced with 8 regional awards to be held this year recognising the outstanding dining establishments in each region as voted by members of the industry.

Our regionally focused awards for 2021 will be held in Waikato, Rotorua, Hawke’s Bay, Taranaki, Manawatu, Wellington, Canterbury, and Queenstown being the first on the schedule on Monday, 3rd May.

The Hospitality Awards shine a light on those businesses that have an ongoing commitment to delivering first class experiences to diners in their region and provides an opportunity for the industry to put aside the challenges Covid-19 is creating and focus on success and celebration.

Our hospitality family have had an incredibly tough year. The awards are an opportunity to recognise those providing an exceptional experience to the dining community and spread the word about the amazing places there are in each region.

Every region across the country is home to outstanding hospitality, and now more than ever we need to encourage and support our industry during these challenging times.

Over 16 awards will be handed out to the best of the hospitality industry in each region. From crew members, to suppliers, to establishments – the best of the best, as nominated and voted for by the industry, will be celebrated for their contribution to creating an outstanding hospitality scene in their area.

Local foodies are also able to vote for their favourite establishment in the People’s Choice Award category.

Stay connected with key updates and announcements on our dedicated hospitality awards website www.hospitalityawards.co.nz.

We are relieved that Auckland has returned to Alert Level 1 after a prolonged period of restrictive trading for the country, and particularly for Auckland businesses.

The Prime Minister announced at 11.30am today that Auckland would move to Alert Level 1 from 12.00pm-midday, Friday 12 March.

This means that all of New Zealand is back at Alert Level 1.

We would like you to know that our recent lobbying on the new wage subsidy criteria has produced results, with changes to the requirements around the date calculation now included. New wording has been added to the eligibility criteria allowing for businesses with ‘highly seasonal revenue’ to be able to compare their decline in revenue to the same period of 14 consecutive days in 2020 or 2019.

Applications for the Wage Subsidy March 2021 are now available and can be made by going to the Work and Income website here.

Eligibility

To qualify, your business needs to experience a 40% decline in revenue over a consecutive 14-day period between 28 February and 21 March, compared to a typical 14-day period between 4 January and 14 February 2021 (6 weeks before the change in Alert Levels). This is available to businesses throughout New Zealand.

Businesses with highly seasonal revenue will be able to compare their decline in revenue to the same period of 14 consecutive days in 2020 or 2019.

Payment rates

The Wage Subsidy March 2021 will be paid for 2 weeks at the rate of:

• $585.80 a week for each full-time employee retained (20 hours a week or more)
• $350 a week for each part-time employee retained (less than 20 hours a week).

Please note, you can’t get a Wage Subsidy for an employee for the period they’re covered by a Leave Support Scheme or Short-Term Absence Payment.

Other Covid-19 support

You may also be able to get the Resurgence Support Payment from Inland Revenue to help with business costs and a reminder that a 2nd round of Resurgence Support Payments was released in response to the 28 February alert level changes.

The Leave Support Scheme is available instead if your employees have been told to self-isolate, or you may be able to get the Short-Term Absence Payment if your employees must stay at home while waiting for a test result.

The tsunami warnings initiated earlier today following the magnitude 8.1 earthquake near the Kermadec Islands have now been called off. Thankfully the warnings did not eventuate in any major damage or reported injury, however some member businesses were affected or unable to trade as a result of the alert. If your business was interrupted and you have business or employment questions please don’t hesitate to get in touch. Please contact the helpline on 0800 737 827, we are here to help.

Areas that were of concern:

• The West Coast of the North Island from CAPE REINGA to AHIPARA.
• The East Coast of the North Island from CAPE REINGA to WHANGAREI, from MATATA to TOLAGA BAY including Whakatane and Opotiki.
• GREAT BARRIER ISLAND.

People in all New Zealand coastal areas should: Listen to the radio and/or TV for updates, or check www.civildefence.govt.nz. Listen to local Civil Defence authorities and follow any instructions regarding evacuation of your area. Stay out of the water (sea, rivers and estuaries, this includes boats). Stay off beaches and shore areas. Do not go sightseeing. Share this information with family, neighbours and friends. Keep up to date with the Civil Defense website.

Employment / Business guidance

For members who have businesses who were affected by the current alert central and you have business or employment-related queries, the Association has a number of resources available to assist.

Download our Emergency Response – Tsunami March 2021 resource here.

Please also call the Helpline on 0800 737 827 for assistance.

Wellbeing and health

A event like this can trigger different emotional responses, while not all people will be impacted in the same way. There are some who will feel no personal impact at all and require no help but there will be others who will feel more affected.

Please be aware that we can help with these matters through our partnership with EAP.  We also have a number of wellness and mental health resources made in collaboration with the Mental Health Foundation on our website.

To help you prioritise your health and wellbeing, we have also secured some free Clearhead subscriptions for members. Clearhead is an online mental wellbeing platform and support service, offering real-time consultations with a digital councillor. Clearhead is powered by smart AI technology that mimics a consultation with your GP. This online conversation is a non-judgmental space where you can discuss what you are going through and receive support. Clearhead will create and guide you through your own personalised wellbeing plan, based on your unique situation. This plan can be worked through at your own pace and will offer you mental health tools and lessons. Find out more about Clearhead on their website here. To register for one of these free subscriptions please signup here.

We will update with further information as it becomes avialable.

Applications open on 8 March 2021 for a second round of Resurgence Support Payments for eligible businesses affected by the current alert level change.

Applications for businesses that were impacted by the change in alert levels from 14-21 February, are open and will close on 22 March 2021. Applications will open at 8am on 8 March for the alert level increase of 28 February. Applications will remain open for one month after a nationwide return to alert level 1 . Businesses and organisations that have experienced a 30% revenue loss as a result of both periods at higher alert levels will need to make 2 applications by choosing a start date. They would be eligible for 2 payments.

Resurgence Support Payment has been set up by the Government to support businesses with reduced revenue due to a COVID alert level increase to level 2 or higher.

Eligibility criteria

To be eligible for the RSP, a business or organisation must have:

• experienced at least a 30% drop in revenue, or 30% decline in capital-raising ability,
• over a 7-day period at the raised alert level compared with a typical 7-day revenue period
• in the 6 weeks prior to the increase from alert level 1.

Businesses and organisations (including sole traders) must have been in business for at least 6 months to be eligible.

Further information on eligibility criteria is here.

Applying for the payment

The Government has now activated the RSP and applications can be made through the IRD, in myIR, from Tuesday 23 February 2021.

Eligible businesses can apply to receive the lesser of:

• $1,500 plus $400 per fulltime-equivalent (FTE) employee, up to a maximum of 50 FTEs, or
• Four times (4x) the actual revenue drop experienced by the applicant.

The RSP will remain open for applications for one month after the return to alert level 1.

Most applicants will receive their RSP from Inland Revenue within 5 working days of their application being approved.

Further information on applying for the resurgence payment

‘Activating the RSP’

The Government will announce whether the RSP will be activated each time the COVID alert level is increased from level 1. Generally, the Government will activate the RSP when the period of increased alert level is at least 7 days. Once activated, the RSP will be available nationally even if the alert level isn’t increased across the whole country.

It’s possible that the Government could decide to activate the RSP multiple times if there are multiple alert level increases from level 1. Businesses and organisations can apply for the RSP each time the RSP is activated if they meet the eligibility criteria.

Tax and the RSP

Payments received under the RSP are not subject to income tax.

Expenditure funded by payments under the RSP is not deductible.

GST-registered businesses will return GST on payments received under the RSP. These businesses will be able to claim input tax deductions for expenditure funded by payments under the RSP.

Further information on receiving the payment

Resurgence support payment calculator

Applications for the Wage Subsidy March 2021 are now available and payments start from Monday 8 March 2021.

Applications can be made by going to the Work and Income website here.

Eligibility

To qualify, your business needs to experience a 40% decline in revenue over a consecutive 14-day period between 28 February and 21 March, compared to a typical 14-day period between 4 January and 14 February 2021 (6 weeks before the change in Alert Levels). This is available to businesses throughout New Zealand.

Businesses with highly seasonal revenue will be able to compare their decline in revenue to the same period of 14 consecutive days in 2020 or 2019. [See information on our lobbying regarding the date criteria here]

Payment rates

The Wage Subsidy March 2021 will be paid for 2 weeks at the rate of:

• $585.80 a week for each full-time employee retained (20 hours a week or more)
• $350 a week for each part-time employee retained (less than 20 hours a week).

Please note, you can’t get a Wage Subsidy for an employee for the period they’re covered by a Leave Support Scheme or Short-Term Absence Payment.

Other COVID-19 support

You may also be able to get the Resurgence Support Payment from Inland Revenue to help with business costs.

The Leave Support Scheme is available instead if your employees have been told to self-isolate, or you may be able to get the Short-Term Absence Payment if your employees must stay at home while waiting for a test result.

Jump to section:

• Latest community case details
• Financial support available
• Reminder of the Golden rules at Level 3 & 2

The Prime Minister announced on Saturday night (27 February) that due to two new community cases, alert levels changes will be implemented – in place from 6am, 28 February for at least 7 days.

The new alert levels are:

• Auckland is at Alert Level 3
• The rest of New Zealand is at Alert Level 2
• The Alert Levels will remain in place for at least 7 days

Details on the latest case:

• The latest community case announced on Saturday evening is a 21-year-old male, the older sibling of a Papatoetoe High School student. (The mother of this person has also tested positive for Covid-19, indicating early signs of infection.)
• The new case was a family member of a student from Papatoetoe High School who has tested negative 3 times before and had no known symptoms – that means there is no current link to the current cluster and is one of the reasons for the Alert Level change.
• The latest case developed symptoms last Tuesday and has been in the community since that time, which is of concern to the Government and is another of the reasons for the Alert Level change.
• They were tested on Friday and the positive result was received today.
• Genomic sequencing is under way to establish where the latest community case came from

Current locations of interest can be found here.

We unfortunately find New Zealand hospitality businesses again faced with a last minute closures and restrictions on trading, placing significant financial and emotional strain on our business owners and staff.

Government financial support available

The Government has indicated that the Wage Subsidy Scheme, and the Resurgence Support Payment will apply in this case, available for businesses to access when they meet eligibility criteria. We will update members as further details become available on applying for the wage subsidy scheme.

Resurgence support payment

The new Resurgence Support Payment is to help businesses directly affected when there’s a move to Alert Level 2 or above for a week or more. The payment is structured to provide most support to smaller firms who are most likely to face cashflow issues, but when activated it is available to all businesses and sole traders.

The payment includes a core per business rate of $1,500 plus $400 per employee up to a total of 50 FTEs ($21,500). Firms that experience a 30% drop in revenue over a 14-day period will be eligible.

More information available here.

Wage subsidy scheme

The Wage Subsidy Scheme is in place if there is an escalation to Alert Levels 3 or 4 anywhere in New Zealand, for 7 days or more. Payment rates will be:

• $585.80 for people working 20 hours or more per week (full-time rate)
• $350.00 for people working less than 20 hours per week (part-time rate).

Support will be provided in two-weekly payments and total support will match the duration at Alert Level 3 or 4 rounded to the nearest fortnight.

As with the COVID-19 Wage Subsidy paid earlier, the payment is to support employers (or self-employed people) to pay their employees.

COVID-19 Short-term Absence Payment

A new COVID-19 Short-term Absence Payment is available to help businesses keep paying eligible workers who:

• cannot work from home and
• need to miss work to stay at home while waiting on a COVID-19 test result (in line with public health guidance).

There’s a one-off payment of $350 for each eligible worker.

Parents or caregivers who need to miss work to support their dependents who are staying at home awaiting a test result will also be eligible. COVID-19 Short-Term Absence Payment

COVID-19 Leave Support Scheme

The COVID-19 Leave Support Scheme continues to be available. It’s paid as a lump sum and covers 2 weeks per eligible employee. It’s paid at a flat rate of:

• $1176.60 for people who were working 20 hours or more per week (full-time rate)
• $700 for people who were working less than 20 hours per week (part-time rate).

The Leave Support Scheme is for employees and self-employed people who meet certain health criteria (for example workers who are sick with COVID-19 or meet the other eligibility criteria). COVID-19 Leave Support Scheme

Other support schemes

Other support retained includes the Business Finance Guarantee Scheme, which is being extended to June 2021 with additional availability and flexibility, and Small Business Cashflow Scheme, which has also recently been extended.

A reminder of the golden rules under Alert Level 3 & 2:

LEVEL 3

The Restaurant Association guidelines for operating at Level 3 are available here.

General principles for operating at Level 3

• Businesses must take health measures to keep their workers safe – maintain physical distance between workers, recording who is working together, limiting interaction between groups of workers, disinfecting surfaces, and maintaining high hygiene standards.
• Hospitality businesses can operate under Alert Level 3 for contactless delivery and pick-up (including drive-through) of pre-prepared food and beverages. Customers cannot enter your premises.
• People are still instructed to stay home unless for essential personal movement. Essential personal movement is for activities such as accessing local services and businesses, recreation or work and school.

LEVEL 2

The Restaurant Association guidelines for operating at Level 2 are available here.

For hospitality business the key measures for operating at Level 2 are to follow the 3 S’s – seated, separated and single server.

Restaurants, cafes & bars

• The overall limit on numbers is 100.
• Multiple groups are allowed provided they are in separate ‘defined spaces’ and there is no mingling of people between the different spaces (including in common areas).
• 1 metre physical distancing is required between groups and there must be at least 1 metre between tables.
• Only one server is to serve at any table, to the greatest extent practicable.
• Records must be kept to enable contact tracing for workers and customers.
• Customers must be seated at a table except where using the toilet, entering, paying or departing, or, ordering and collecting food and drinks (at unlicensed premises)
• Ordering and collecting food and drinks at the counter is allowed for nonlicensed premises only, provided that physical distancing of 1 metre is maintained, so far as is reasonably practicable.
• Ordering and collecting food and drinks at the counter is not permitted at bars or other licensed premises.

Takeaways

• Takeaway food can be ordered from the counter of any establishment, irrespective of whether patrons are able to dine-in or not.
• 1 metre physical distancing is required.
• To reduce lines and queuing you could encourage pre-ordering online, over the phone or via an app

Venues generally – Social Gatherings

• If someone hires a hospitality venue for a social gathering, the gatherings rules apply, not the hospitality ones.

Immigration New Zealand have updated guidance for hospitality businesses on Essential Skills work visas. This updated information is intended to help you and your employees understand, plan for, and comply with New Zealand’s changing immigration environment.

Many staff within our hospitality industry hold temporary work visas. Of these, the visa type currently likely to be of most interest to employers is the employer-assisted Essential Skills work visa.

The COVID-19 pandemic has damaged the economies of nations worldwide. In New Zealand, the hospitality sector has been particularly affected. For the immediately foreseeable future, international tourism will be severely limited, and with many hospitality businesses operating on tight margins, unemployment is predicted to rise.

Many staff within New Zealand’s hospitality industry hold temporary work visas. Of these, the visa type currently likely to be of most interest to employers is the employer assisted Essential Skills work visa.

In July 2020, many Essential Skills work visa holders were granted a six-month extension. This was a short-term measure recognising the difficulty of international travel. Nonetheless, even allowing for the extension, large numbers of current Essential Skills work visas will expire in the first six months of 2021.

Download the updated Immigration New Zealand essential skills guidance here.

The Restaurant Association are also in ongoing discussions with the Government and Immigration New Zealand regarding current recruitment challenges for our member businesses and the issues we are predicting when our workers on essential skills visas have their visas expire.