Hospitality in crisis: Desperate plea from another Auckland dining institution

In the wake of SPQR’s closure, the managing director of high-profile CBD restaurant Vivace has warned that the industry is in crisis and more closures are imminent.

In an open letter to the NZ Herald, Vivace’s Mandy Lusk delivers a sobering warning about the state of the sector in central Auckland and makes a plea for the public to support their favourite establishments through this downturn even if it is just for a quick drink or coffee.

With most operators working 80-hour weeks to stay afloat, there was little opportunity to push for new business, Lusk said.

She is hoping a new campaign – similar to a public initiative run during the pandemic – will help drive some much-needed short-term support for local bars and restaurants as they struggle to cope with the winter downturn.

High inflation and high interest rates have collided to hit consumer spending hard in the past few months.

Lusk was responding to the latest edition of the Inside Economics column, which highlighted the grim consumer spending data for the hospitality sector.

Electronic card data released by Stats NZ last Friday showed hospitality spending was down 0.5% for the month and 2.1% for the quarter.

ANZ’s card spending data is a subset of the total New Zealand figure based on the bank’s customers.

But it represents a useful cross-section given it is the largest bank, and breaks down the figures in more detail. It shows spending on restaurants and bars was down 6.3% year-on-year.

There were promising signs this week that inflation is coming back under control.

The Consumers Price Index rose just 3.3% in the year to June – and there are growing expectations that the Official Cash Rate (OCR) will fall by November.

But for many operators juggling high costs, high debt and low cashflow, November still looks a long way off.

The full Vivace letter:

I am one of the many restaurants that may well head the way of the hundreds of others in our industry - last week it was SPQR, and I hear three are others closing in the next week.

If you ask the question of the Restaurant Association & Hospitality NZ there are hundreds more. No one really recovered from months of being forced to close, banned from trading and have zero income.

You mentioned in your article that people need to get out and support locals or they won’t be there which is totally correct. Most are living week to week. I was wondering if you might be prepared to help us.

During Covid, we were lucky enough to get help from the team at Lumo Digital to help set up a campaign “Have one for Hospo ‘’. Just asking people to pop out even if it is for a quick drink/coffee to help keep people’s businesses ticking over.

Lumo Digital has offered to help us again by reigniting that campaign while I try to get a new one going.

There are so very many of us who will not be here for much longer if we cannot entice people out to help support us - even if it is just one drink. There are many bigger businesses in various industries out there that are still doing ok, and some of them thrived over Covid, so are in a position to help smaller businesses should they choose to do so.

I am trying to get bigger businesses to “buddy up” to adopt a smaller business - even if they choose to do so just for a week or month. The aim is to encourage their customers and staff to support the particular small spot. Just networking on our behalf really as most of us are now working 80-hour weeks trying to save things, and not only do not have any time, but also lack the contacts to make new connections.

I see it very much as a self-help thing with ‘hospo’ businesses contacting all their customers and asking for their support - basically putting themselves up for adoption. It is then up to them to nurture that relationship.

I need help in getting the message out to corporate NZ that it would show great social responsibility to get behind what we are all trying to do and help the industry that was arguably the hardest hit by Covid policies. We were the first closed down each time, the last allowed to re-open, had the most stringent OSH rules when we were allowed to open, and unlike industries like tourism, zero grants were provided to assist us.

We are looking for the hand-up, not a handout.

We want to try and make the concept of adoption a good “warm fuzzy” quirky type of charity. It would be great if we could get it to a stage around the CBD where the big firms need to be seen to be supporting someone or look mean-spirited to their clients.

To be honest, it doesn’t even need to be a ‘hospo’ business as so many small businesses are failing in cities but my focus is on trying to save our industry.

Kindest regards,

Mandy Lusk