It’s hard to remember a more difficult time for the hospitality industry – Editorial

A trip down our main streets will reveal a series of hospitality closures. Photo / 123rf

Editorial

We all have noticed some of our favourite hospitality haunts have disappeared this year.

On every trip down a town’s main street or into the once bustling suburbs of Auckland, one can’t help but notice another closure or for lease sign hanging in a front window.

In today’s paper, a report from RNZ used data supplied by Centrix to reveal 2564 hospitality businesses have shut in the past 12 months.

It’s an increase of 19% from the year prior.

There have also been 297 hospitality businesses liquidated in the past 12 months, an annual increase from 199.

Some of our award-winning and well-loved restaurants that have been part of the community for decades have closed.

The hospitality and culinary scene have always gone through periods of hardship and change, but it is hard to remember a time this difficult for those in it.

Chris Wilkinson, of First Retail Group, said some businesses are reaching a tipping point where people can’t and won’t pay.

“That’s the biggest challenge that we’re finding everywhere. So you’ve got really good businesses that are struggling or going under. They’ve reached that tipping point.”

Restaurant Association chief executive Marisa Bidois echoed the pain in the industry.

Some communities in Canterbury and Otago are doing okay, but nobody in hospitality appears to be swimming in rivers of gold.

Lower interest rates are slowly making their way through to people’s back pockets.

The Reserve Bank says it is confident this will eventually help, when exactly is less clear. Many commentators have called for greater Official Cash Rate cuts in an effort to zap our zombie economy back to life.

Unfortunately, there also appears to be little sympathy. Any gains made in lower mortgage repayments aren’t translating to more discretionary income – instead they are being eaten away by increased rates, insurance bills and high food costs.

Some in Government and business have chosen to isolate themselves from the economic reality, while repeating the phrase, “there are some green shoots”.

These same people said we’ll all thrive in 2025. Is it now, it’ll be fixed in 2026?

Covid also completely shifted people’s daily habits. More people work from home now and some choose to venture no further than their letterbox.

Last week, we reported how an Auckland Vietnamese restaurant keeps a measly quarter of the revenue from its Uber Eats orders as people order to their door and binge on Netflix.

The rough economic conditions will change faster than these hermit habits, but signs of sunshine as winter ends are little comfort to our small business-owning friends and family.

They’ve been doing it tough now for years, through Covid and an extended recession, which economists say has been worse than the Global Financial Crisis.

So, if you can, now is the time to support your favourite cafe or bar or they may be gone before summer begins.

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