There is civil unrest in both New Caledonia and Rafah as conflict continues, the Waitangi Treaty is claimed to have been breached regarding the governments reforms on hospitals.
Restaurant Association chief executive Marisa Bidois is optimistic about the year ahead despite a challenging winter looming for many hospitality businesses.
“It still is a bit of a mixed bag in terms of the feedback we’re getting,” she said.
The industry head reflected on the latest Hospitality Sales Snapshot releasedtoday, covering the fourth quarter of 2023.
Total sales for the hospitality industry over the period were $4.12 billion, up 4.2 per cent compared with the fourth quarter a year ago.
The dollar value increase in sales for the quarter was $267.1 million, compared with the same period in 2022.
Meanwhile, the restaurant and cafe sector, which has a 49.5 per cent market share of the industry overall, had a 3.6 per cent uplift in sales revenue to $2.04b over the fourth quarter compared with the previous year.
“The main takeaway is yes, there’s been some growth but it’s sort of been tempered by that significant inflationary cost, and that’s really the feedback we’ve had from members as well,” Bidois said.
“It hasn’t been the easiest trading time, there’s still quite a few challenges out there.
“Many of our members are talking about how challenging winter could be.”
Challenges remain
Bidois said the sector was highly sensitive to shifts in discretionary spending.
“The number one challenge for our businesses at the moment has been customer downturn.
“That’s no surprise in some way because we know that the cost-of-living crisis is currently happening, we’re still dealing with high interest rates and households are watching the pennies a bit more, and so that really impacts our businesses and hospitality as well.”
The Restaurant Association’s Dining Out report – an online survey of 4000 customers – released in December found 40 per cent of patrons had reduced their spending in the past 12 months.
This was mainly due to less frequent dining out and switching to more affordable options.
More than half (56 per cent) had maintained their spending levels over that period.
“While some operators report buoyancy in their trade, others are experiencing declines in both foot traffic and spending,” Bidois said.
Restaurant Association chief executive Marisa Bidois.
Businesses were also facing a balancing act with increasing costs.
“We have seen some pretty sharp increases in costs and the cost of doing business over the last 12-18 months. And so that certainly does impact businesses’ ability to be profitable.
“Many are still burdened with debt accrued during the pandemic, which amplifies the challenges they face.”
The sector operated on notoriously narrow margins, she said.
“We have seen a few more [business] closures towards the end of last year.
“I think that’s really a reflection of how difficult the times are.
“We’ve come off the back of about four years of very difficult trading, we’ve had Covid, weather events.”
And while skills shortages had eased slightly, they remained an ongoing challenge.
The association was working on showing people that hospitality was a viable career option.
Better times ahead?
The hospitality industry will be buoyed by a big bounce in tourist numbers.
However, those numbers are still running at 17 per cent down on pre-pandemic levels.
“The return of international tourists during the summer months has provided a much-needed boost, serving as a silver lining amid ongoing challenges,” Bidois said.
“Many of them are eating out three times a day, so that’s really good for our industry.”
Bidois said 2024 looked to be one in which the industry would survive, looking ahead to a point where it would thrive again.
“Our industry is a resilient industry and we are hopeful that things will pick up eventually as the year goes on.”
Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sports. He reports on topics including retail, small business, the workplace and macroeconomics.
