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Hospitality industry reports continued losses

A survey conducted of members following their first week operating at Level 3 continue to show significant losses, with 89 per cent of members reporting a downturn compared with the same period last year.

The Restaurant Association is calling on the government to provide additional fiscal relief to the hospitality industry as it continues to report losses.

“The reopening of takeaways at Alert Level 3 was a step in the right direction but was never going to be a silver bullet," says Restaurant Association CEO Marisa Bidois.

"Some of the figures we’ve heard from members who own fast food restaurants unfortunately do not reflect what we’re seeing across the broader industry,”

The Restaurant Association is calling on the government to offer urgent fiscal relief along with a code of conduct for landlords to assist the struggling hospitality sector to manage its fixed overheads.

“We surveyed our members following their first week operating at Level 3 and the results continue to show significant losses, with 89 per cent of members reporting a downturn compared with the same period last year.

“Whilst our survey indicates approximately two thirds of businesses reopened at Level 3, with all shop fronts remaining closed, many restaurants are not adequately set up to capitalise on takeaways and these are the businesses that are being hit the hardest.

“These numbers are snowballing daily as restaurants and cafes quickly run out of the cash flow required to stay afloat until we re-enter Alert Level 2.”

Fixed costs, such as rent, and lease costs remain a major issue for the industry. When asked what relief they’d most like to see 75 per cent of those surveyed requested a continuation of the wage subsidy and 67 per cent would like to see rent relief and a business subsidy.

“Level three will provide some relief but it will not be this way for all. There are relatively few businesses in our industry who are set up to thrive at this level and whilst our Association has put in a huge amount of work to assist with this, we are still mindful that this is still not a viable option for all," says Marisa.

“The wage subsidy was a good start, but it will be meaningless if businesses can’t survive.

“Even when we do enter Alert Level 2, consumer confidence is still expected to be low and combined with the losses the industry has been carrying since the drop in tourism numbers in February we do expect the ramifications of this to last well beyond a year.

“The industry still needs urgent financial relief as well as a code of conduct for landlords to enable our business owners to avoid the devastating personal and professional losses that will inevitably occur if more assistance is not offered.”

When asked what support or financial relief they would like to see from central government members voted as follows:

  •   •  68 per cent - support around rent relief

  •   •  67 per cent - Financial assistance through a business subsidy

  •   •  75 per cent - Financial assistance through an additional wage subsidy

  •   •  30 per cent - Flexibility with on-licenses to allow off license with food orders

  •   •  53 per cent - Additional tax relief

  •   •  39 per cent - Other financial assistance eg refund on license fees

  •   •  15 per cent - Redeployment assistance for staff

  •   •  23 per cent - Assistance with technology and upgrading the business to comply at different levels

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