Rotorua hospitality business owners’ mental health affected by economic pressures

“I’m always trying to keep positive during the bad times, otherwise you end up more depressed.”

Those are the words of a seasoned Rotorua hospitality business owner who says the difficult economic climate and “weird winter” has been a drain on his mental health.

Another business owner said his struggles were frequently affecting his sleep.

A recent survey by the Restaurant Association revealed 54% of business owners nationwide reported that their mental health had worsened as a result of declining revenues and reduced customer numbers.

Indian Star and Urban Gusto owner Ray Singh said those challenges kept him up at night, but he had been in the hospitality game his whole life and believed himself too old to change professions.

“It’s just something stuck in … the brain and mind and around your sleep, you know?” Singh said.

Ray Singh said there had been “a little change but not much” since last November. Photo / Andrew Warner

“Sometimes those issues in the business, it’s stuck in the mind and affects your physical and mental health as well,” Singh said.

The Rotorua Daily Post spoke to Singh last November, when The Indian Star had been grappling with soaring food costs and a decrease in food traffic, and had needed to drop staff numbers from 15 to 11.

Since then, Singh said there had been “a little change but not much”.

If you dropped by Eat Streat on a quiet Monday night, he said, all the restaurants were “empty”, with three or four tables filled at the most.

Bars and restaurants on Eat Streat. Photo / NZME

Customers were not spending money on dining out, Singh said, but he believed things had slightly improved as the restaurant had drawn decent crowds on public and school holidays.

Singh said some of his food prices were coming down. Soybean oil cost Singh $80 for 20 litres last November, a jump from $32 before Covid-19, but he was now paying $49.

A 20kg bag of rice was $38 to $40 before Covid-19, $60 during the pandemic, and had decreased again to $50.

Butter, however, had stayed high. Singh said his prices had jumped from 99 cents for 500 grams pre-Covid-19 to $8 last November.

Another Rotorua business owner, who co-owned seven hospitality joints with his brothers, said it had been “a weird winter”, with sales down 5% to 10% from this time last year.

But Deepak Kundal said he tried to have a positive mindset about the slow season, knowing there was only one more month left before spring would arrive.

Deepak Kundal, who owns six restaurants and one cafe, says his businesses are doing it tough. Photo / Andrew Warner

“I’m always trying to keep positive during the bad times, otherwise you end up more depressed,” Kundal said.

He said his businesses were doing worse than when the Rotorua Daily Post spoke to him in November, but it had been a “really busy” summer, which was saving them now.

With customers “hibernating” through the colder months and tightening their wallets, Kundal said it was a challenge to keep staff motivated. Some days staff waited more than half an hour for their first customer to come through.

Weather had a big part to play as Rotorua businesses relied on Auckland tourists who were less likely to come if the weather was bad, he said

This winter, wet weather had hit at the worst times, often right as the weekends started and in the second week of the school holidays.

“I have friends in the hospitality business, they all are hurting bad.”

Kundal said his cafe, Third Place Cafe Rotorua, was performing better than his restaurants and bars, as people wanted to stay home and warm on rainy winter evenings.

“In the daytime, you have people out and about working and they will get a coffee, even if it’s raining. But in the evening, they are at home and they will stay at home and cook their own meal,” Kundal said.

Kundal said conferences used to “keep the town pumping” but fewer people were attending compared to before Covid-19.

The latest Hospitality Industry Report from the Restaurant Association revealed operators began to feel the impact of cost-of-living pressures on customer spending about halfway through last year, and that had continued through 2024.

The combination of extreme weather events, rising food costs, declining customer traffic and spending, increasing wage costs, cost of living pressures, and election year uncertainties had significantly affected overall industry productivity and profitability.

However, a notable positive aspect was the return of international tourists, who contributed strongly to trade over the summer 2024 season.

Restaurant Association chief executive Marisa Bidois said the past year had been one of the “most challenging periods” for the industry, coming on the heels of several difficult years.

Marisa Bidois, CEO of the Restaurant Association. Photo / Supplied

“The cost-of-living challenges and other pressures are now compounding these issues, threatening the survival of some businesses,” Bidois said.

“Despite these hurdles, our members are showing extraordinary determination. Business owners are keeping their heads down and doing everything they can to survive, in the hope of brighter times ahead.”

Harriet Laughton is a multimedia journalist based in the Bay of Plenty.