Keith Galbraith, owner and operator of Auckland pub Galbraith's. Photo / Supplied
Keith Galbraith, owner and operator of Auckland pub Galbraith's. Photo / Supplied
Increasing disruption from the Covid-19 outbreak has seen hospitality revenues plummet by more than 60 per cent, with fears this figure could drop further.
The Restaurant Association last week said hospitality business revenue were down an average of 25 per cent - this has since spiralled and is now northof 50-60 per cent, says Hospitality NZ Auckland president Russell Gray.
"Everything is drying up and revenues are falling off a cliff. That's the sad, harsh reality," Gray told the Herald.
He says the Government's announced $8.7 billion financial rescue package for business does not allow for adequate support for struggling medium-sized businesses with more than 20 staff or larger firms as it did with small firms.
The Government's $12.1b package includes $2.8b in income support, the establishment of Covid-19 sick leave cover and tax changes to free up cashflow.
Businesses will be able to access $585 per full-time employee and $350 per part-time employee each week for up to 12 weeks with a maximum of $150,000 accessible.
The $150,000 cap would support businesses with approximately 21 staff, Gray said.
"The Government needs to deal with the anomaly in that there are many groups that run multiple venues and those venues may well be under one trading company," he said.
"Some hospitality groups will have 15 to 20 people in each venue."
Hospitality NZ is calling for the Government to rethink its criteria to offer financial support on a venue-by-venue basis as disruption from Covid-19 continues to stretch businesses.
"These are unprecedented times and very challenging for hospitality operators to work through."
Medium-sized and large hospitality venues make up approximately a third of the industry.
According to Statistics New Zealand, 90 per cent of New Zealand businesses have 19 or fewer employees.
The remaining 10 per cent of businesses employing 20 or more people are responsible for almost 72 per cent of the country's workforce.
David Searle, chairman of Baker Tilly Staples Rodway New Zealand, said a financial package for larger employers was vital - and urgent.
Searle said the current financial help on offer would be insignificant for businesses with more than 100 staff.
"While the New Zealand economy will be affected by the collapse of small businesses, it is the medium to large businesses that will have the greatest impact on our economy and employees, if they find themselves in trouble. Already we are seeing hiring freezes and cutting back of non-essential and uncommitted spend by our clients," he said.
"Although the headline figure of $12.1b is significant, 72 per cent of employees are being left unsupported. Medium and large employers need to know whether they are going to receive help for their employees before it is too late."
Gray said the Government's move to ban indoor gatherings of more than 100 people in a bid to limit the spread of Covid-19 would present challenges for larger venues such as restaurants, bars and nightclubs.
Restaurants had moved to ensure there was one metre at least between each table in line with social distancing rules, but in other venues, such as bars and nightclubs, this was harder for businesses to comply with.
"We're expecting that patrons themselves will self-impose their own social distancing requirements."
Auckland's nightclub scene dries up
Patronage at nightclubs - like bars, restaurants and cafes - had dried up following the outbreak, Gray said.
They could now only have 100 people, including staff, in the venue at any given time.
"[Covid-19] is having a devastating impact on the industry, and we are going to need a lot more Government support to get through this if it plays out longer than the next three months."
Indoor gatherings have been restricted to 100 people per venue. Photo / Supplied
There were a growing number of operators who would not make it through that period, he said.
Keith Galbraith, owner and operator of Galbraith's brewpub in Mt Eden, Auckland, said his business had experienced a downturn in patronage in excess of 30 per cent.
Galbraith visitor numbers began to fall about three weeks ago, and he had noticed that people were now spending less on food, while the spend on alcohol remained steady.
"The downturn has mainly been in food - food as a percentage of sales for us has dropped from about 35 per cent [of business] to 22 per cent. People are not eating, but they are still drinking," Galbraith, who has been running the business for 25 years, said.
"It is almost like food has become secondary to the reason people come here."
He said the food Galbraith's served was more upmarket than regular pubs so it also attracted people for lunch and dinner as opposed to a place to only drink.
"People's eating habits seemed to have changed; people have stopped snacking. They'll go out and have a meal but they won't snack while they have a beer."
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Galbraith said the business had contingency plans for several scenarios, including closing down completely if it was directed to do so by the Government.
The pub employs about 12 staff, which Galbraith said it would be able to retain as part of the Government's wage subsidies package.
"If revenue drops further it would necessitate closing, but we've got our staff covered and for a certain length of time - we've got a plan to keep them employed, whether we are open or closed.
"It is uncertain times and we need to do our bit to make sure that we look after people who have been loyal to us."
