Hospitality sector springs into life

By Ben Chapman-Smith

Hospitality spending rose 0.9 per cent to $18.14 billion in the second three months of 2013.
Hospitality spending rose 0.9 per cent to $18.14 billion in the second three months of 2013.

New Zealand's hospitality sector is experiencing an upturn right now but it's too soon to break out the champagne, says an industry spokesman.

Statistics New Zealand released data today which showed food and beverage services industries - cafes, restaurants and bars - saw spending rise 4.5 per cent to $1.8 billion in the last quarter.

Hospitality spending rose a seasonally adjusted 0.9 per cent to $18.14 billion.

Employment website Seek.co.nz said this week that jobs in the hospitality and tourism sector were up 13 per cent in July from the previous year.

Janet Faulding, Seek NZ's general manager, said July was typically a busy time for hospitality recruitment as businesses began their recruitment drive leading up to the Christmas and summer period.

"July 2013 is no exception with more jobs listed in hospitality and tourism than in any other month so far this year."

As consumer confidence increased, people were getting out and spending more, she said.

"This is evident in neighbourhood bars and restaurants where strong sales growth has led to a need for more staff."

Bruce Robertson, chief executive of Hospitality New Zealand, said the current upturn was positive news but there had been no consistent spending pattern this year.

"We're getting growth but the growth is discriminatory," he said. "It's patchy from outlet to outlet and from day to day."

Robertson said this was the first strong data the industry had seen and businesses would be hoping for sustained growth through to Christmas.

He attributed the current lift to improving consumer confidence, which was in turn a result of better economic conditions.

"I think New Zealanders are tired of being restrained and that, matched with a more optimistic economic outlook, is encouraging people to say 'let's free up the shackles a bit'."

ASB economist Jane Turner said strength in accommodation and food and beverage services recently was unsurprising given very strong tourist arrival numbers over the quarter.

"We did see strong tourism arrivals and that has contributed to stronger spending in the sector," she said.

Turner agreed that rising consumer confidence was having a positive knock-on effect for the hospitality industry.

"In general, when people feel more confident they tend to increase their discretionary spending."

The pick-up in the Canterbury economy was also a factor in the sector's upturn, she said.

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