Online bookings at restaurants were up 27 per cent in June. Photo / Getty Images
Online bookings at restaurants were up 27 per cent in June. Photo / Getty Images
About 30,000 more people dined out last month on a year earlier, but how long can the improved trading conditions for hospitality and other parts of the economy last?
Figures from online reservations company Restaurant Hub shows that bookings at restaurants increased 27 per cent in June compared to thesame period a year earlier and 70-80 per cent of outlets had traded better than expected over the month.
Restaurant Hub, owned by NZ Herald publisher NZME, said the increase in people dining out in June - 222,594 compared to 192,083 same time last year - could be attributed to "pent up" demand and many wanting to celebrate their freedom.
Mark Gregory, managing director of Restaurant Hub, said the honeymoon spending period after lockdown had lasted a lot longer than many hospitality venues had expected.
Restaurants and cafes began reopening from May 14 and bars and pubs from May 21 after the country's mandatory lockdown to stop the spread of Covid-19.
June was the first full month of the new normal trading conditions, producing surprising but welcomed increases in trade, but Gregory said operators did not expect this to last.
"That spike from re-opening has lasted six weeks", many thought it would have lasted just half of that duration, Gregory said.
"Many people we talk to expect this to change - when people's mortgage holidays and the wage subsidies begin to come off, and we're all faced with that new normal, expect [spending] to be different."
While diners for June were up on the same period last year, they were not up at every single restaurant on the platform, and consumers were not spending more, he said.
"We are expecting people to continue to eat out, but eat out more affordably."
Seasonally adjusted retail card spending jumped 16.3 per cent in June compared to May when it spiked 78.9 per cent from the lockdown month of April, Stats NZ figures show.
Actual retail spending hit $5.7 billion in June, up 8 per cent from a year earlier, and the highest level since January. Only two of six industries experienced a drop in the month showing consumers were still opening their wallets.
Bart Littlejohn, co-owner of Sails Restaurant in Auckland's Viaduct Harbour, which reopened under alert level 1, said the business was trading above last year's revenues.
Like many restaurants, the business had reduced its operating hours to five days per week, down from seven, and has experienced an increase in patronage since reopening.
Littlejohn said patrons had been spending about the same amount per visit as they had prior to lockdown, and he believed more people were dining out now as they had more disposable income in their pockets due to the cancellation of international holidays.
"Every second table I speak to, they had some sort of overseas trip planned."
The discretionary income people have in their wallets due to cancelled holidays is largely a one-off situation, Littlejohn said this, coupled with the end of wage subsidies and the forecast pullback in spending ahead, was a worry.
"It's all concerning, we don't know how long it's going to last or where it's going to go, all I can say is I'm extremely happy that I'm trading as well as I am right now - I didn't expect it, I'm trading more covers than I expected and I'm generating more turnover than expected.
"I projected worse numbers than I'm actually seeing."
Hospitality NZ's concerns
The hospitality industry contributes $11 billion to the economy each year.
But Hospitality NZ expects spending to dry up over the next three months.
Julie White, chief executive of Hospitality NZ, said many operators were feeling a "false sense of security" following better than expected trade after lockdown.
More than 30 per cent of Hospitality NZ's members had experienced a lift in earnings in June and July compared to this time last year, but White said operators needed to be cautious of a changing environment when the wage subsidies and various government stabilisers finished in September.
She said increased trade experienced in recent weeks would be short-lived, and operators seemed to be existing in "a false bubble".
"There was a little bit more money in the economy over the last few months from holiday refunds. What members have said is that consumers have used that money to take a domestic holiday or using it discretionary for dining out, but that will only be short-lived because that money only comes once.
Hospitality NZ had been lobbying for industry support after the wage subsidy ends without luck, White said, adding that the government had been investing in tourism and overlooked the hospitality sector.
"They put [hospitality] in a box and put a stigma on us that we're low paid and low margin, it seems like they are money-shaming us, why do all of our operators need to earn a million dollars each year [to be taken seriously]?
"We seem to be the forgotten industry."
About 80,000 jobs within the sector are expected to be lost in the next six to 12 months and the sector is expected to see a spike in casual employment.
It would take two to five years for the hospitality industry to recover to what it was, how fast it would recover depended on how soon the borders opened, she said.
