IBISWorld says the hospitality industry is anticipating an 8.4 per cent rebound in 2021-2022. Photo / Getty Images
Support for Tauranga's hospitality scene has seen the sector bounce back post lockdown but one business owner warns it won't be enough for some to survive as some look to leave the "volatile" sector.
New data predicts the cafe and restaurant industry will see an 8.4 per cent rebound this year and the sector's revenue is expected to rise to $6.6 billion in the next five years.
However, drained cash reserves after lockdowns and a shortage of skilled staff is a "constant battle" and business owners fear they won't see relief until the borders re-open.
According to data from IBISWorld, the cafes and restaurants industry, while expected to be permanently changed by the pandemic, is anticipating an 8.4 per cent rebound in 2021 to 2022, while the fast food and takeaways food services are expecting a 7.5 per cent rebound.
Senior industry analyst Matthew Barry said both business confidence and consumer sentiment were expected to become positive in 2021 to 2022.
"Revenue for the cafe and restaurant's industry is expected to rise at an annualised 3.3 per cent over the five years through 2025 to 2026 to $6.6b."
However, Barry said short-term lockdowns were expected to weaken the sector's performance this year.
Miss Gee's director and owner Ashleigh Gee said the sector was "definitely not" where it needed to be yet.
"It has been an extra-quiet February/March for a lot of businesses with level changes thrown in the mix so it has been tough.
"Support locally since the first major lockdown has been excellent but unfortunately, it won't be enough for some businesses.
"There are a lot of hospitality businesses for sale as people are looking to get out of a volatile industry."
Gee said the next 12 to 18 months would be tough, especially if the region continued to be impacted by alert level changes and with the borders remaining closed.
"Winter is coming and as the Bay is traditionally seasonal, it may be a long, harsh few months for some businesses.
"It is hard to gain momentum when businesses are living in fear of being told to close and holding any savings they could be reinvesting, for a rainy Covid day."
Gee said local support would continue but the ability to travel out of New Zealand again would mean some people will start to cut back on dining out in order to save for holidays.
"Businesses won't be able to breathe a sigh of relief until the borders open."
A year since the lockdown and with a "new normal" of working from home, Gee said she had seen a decline in nine-to-five office workers moving around bars and restaurants for lunch and meetings.
"We are focusing on supplying quality events and experiences to attract new customers and then working to turn these new customers into regulars."
Finding staff was a constant battle and would be until the borders opened, she said.
"We are trying to offer our staff opportunities to upskill and be ready to take on the world when we are given the green light again."
Owner of The Raft and The Millhouse, Mike Gulliver, said it had been a "bit of a rollercoaster" since lockdown.
"Tauranga had a massively busy dining scene."
Some days it felt like lockdown never happened but at level 2 or 3 people were afraid to dine out, he said.
Gulliver said lockdowns were "frustrating" due to lost earnings and wasted product.
"But on the other hand it was probably the longest holiday I've ever had in hospitality."
Gulliver said the hospitality sector was performing well.
"But bouncing through alert levels is definitely noticeable.
"The fact we have the vaccines is going to be a big plus. Once people feel like they can go out and about people will just go back to normal."
Tauranga Chamber of Commerce chief executive Matt Cowley said the future looked bright for hospitality as long-term population trends would likely continue to grow.
"The greatest challenges in the short-term are drained cash reserves after lockdowns and the shortage of skilled staff as many chefs are overseas workers.
"Our local tourism sector is more reliant on domestic tourists, which is great during summer, but can cause stress for business owners during the quieter winter months."
Cowley said successful eateries tend to have a strong digital presence, making it easier to keep customers informed and the ability to book online.
Hospitality New Zealand chief executive Julie White said the data was not surprising.
"We have always been really optimistic around the recovery for our industry.
"It just reconfirms why it's so important to keep our sector going. We are the industry that can get cash in the community very quickly."
However, she said the bounceback was dependent on how much the nation continued to yo-yo between alert levels, and being able to open the borders.
"Once we open the borders the value of having a world-class food and beverage scene to support the international visitors will be important."
Supply chain issues had also resulted in increased costs for business owners, she said.
White said the Bay's hospitality scene continued to be "patchy".
"The Bay certainly does have some reliance on international visitors."
Restaurant Association of New Zealand chief executive Marisa Bidois said while the past year had been devastating, the industry remained optimistic.
"Hospitality has been in continued growth and we are confident that once we have the virus under control and vaccinations rolled out, the public will continue to dine out at the same levels as they did prior to the pandemic."
However, Bidois said the borders would need to fully open again before businesses, particularly those in tourist hotspots, return to previous trade levels.
"These places are also affected by Auckland being in higher alert levels, which precludes them from being able to travel to these regions."
The move towards working from home was also impacting city-centre businesses, she said.
"This may mean that more city-centre businesses look for alternate revenue streams such as home delivery.
"We also anticipate more eateries cropping up in residential neighbourhoods to service the working-from-home crowd."
Bidois said member feedback from February indicated alert level changes continued to have a big impact, with 83 per cent of people saying turnover for the month was less, or significantly less, than the year before.
"Anecdotally, in the Bay of Plenty, we seem to be hearing from a number of our Tauranga, Mount Maunganui, Pāpāmoa members that they have been faring okay.
"Rotorua, however, as a tourist hotspot, has been struggling with the lack of international and Auckland tourists."
A tavern operating without a duty manager also found in breach.