Covid 19 coronavirus: The cost: Hospitality revenue plummets 40 per cent after lockdown

Hospitality sector reached an all-time high sales of $12.1 billion in the year ending March 2020 before plummeting 40 per cent. Photo / Doug Sherring

After record takings of $12.1 billion in the year ending March 2020, hospitality in New Zealand plunged a whopping 40 per cent after the Covid-19 pandemic struck.

Prior to the virus outbreak, things were looking extremely bright for the industry which had posted significant annual growths year on year since 2016.

Annual sales for the sector grew 4 per cent in the year ending March 2020, which in dollar terms translates to an increase of the previous year of $236m.

DO NOT USE - OLD PICUTRE Restaurant Association CEO Maris Bidois. Photo / Supplied

But after March, as many businesses were unable to operate under level 4 lockdown, sales revenue plunged posting just $1.7b for April to June, down more than 40 per cent from the same period last year when revenues were $2.9b.

The figures were released in the latest Restaurant Association Hospitality Report released on Sunday morning.

Association CEO Marisa Bidois said the road ahead for industry was a "bumpy one" but there will also be new opportunities.

"With careful planning, operators can make it through while building a strong and sustainable business," Bidois said.

"Operators identify New Zealanders supporting local businesses and building deeper relationships with customers and communities as two of the most significant opportunities for their businesses over the next 12 months."

Restaurants and cafes recorded the highest sales increase in dollar terms, but takeaway and food to go realised an annual sales growth of 4.1 per cent - the highest for the sector.

Catering services also saw a 4 per cent increase posting sales of $956.8 million.

Auckland CBD eateries are among the worst hit as workers continue to stay home and there are no tourists or international students. Photo / Dean Purcell

Despite the industry overall declining 3.1 per cent after March, some regions had posted positive sales growth including Tasman, up 29.3 per cent, Kaikoura, up 19.4 per cent, Marlborough, up 18.2 per cent and Northland, up 17.8 per cent.

"It's still very much a mixed bag out there," Bidois said.

"Whilst some businesses are recovering well, many others are still experiencing significant losses. Establishments in tourist hotspots as well as Auckland CBD are still down on last year with the trend of city centre workers staying home and loss of tourist dollars continuing to cause significant reductions in trade."

Chris Martin, co-owner of Ahi - a restaurant that opened on August 31 just after Auckland's second lockdown - said it had been challenging, but he was optimistic.

Chris Martin co-owner and general manager at Ahi restaurant, Commercial Bay. Photo / Alex Burton

Ahi, which means fire in te reo Maori, is described as a fine dining meets laidback sophistication eatery offering modern takes on Kiwi classics.

"To be honest that were times early on when I've wondered how we were even going to open, but now that we have, I am feeling so positive about it. We have been busy every day since opening," Martin said.

"Thanks to the support of locals, we are looking to be extremely busy heading into Christmas and beyond. I think thinks will only get better as the central city construction and developments get completed."

Ahi's other co-owner is well known chef Ben Bayly, a former judge on My Kitchen Rules, who had said he feared he could lose his family home over mortgage and costs involved with Ahi prior to its launch.

Cafe Hanoi owner Krishna Botica, who was recognised for her Covid-19 resilience by the association had told the Herald last month she was "nervous" looking forward.

"Mainly because the last lockdown really knocked off any confidence we had before then," she said.

Bidois said the shape of hospitality could change forever as a result of the events of 2020, and the Covid-19 pandemic has dealt the industry with uncharted challenges.

Association members indicated in a recent survey that their top three concerns were the further increases to the minimum wage, another Covid-19 outbreak and maintaining profitability.

Last minute changes to alert levels, paying fixed costs and finding skilled staff ranked as the top three operational issues.

But operators reported New Zealanders supporting local business, becoming a leaner business and developing deeper relationships with community as opportunities for the year ahead.