Public holiday surcharges are just a free pass to boost income

Tuesday, 24 December 2019

OPINION: The festive season is upon us, bringing with it the dreaded hospitality public holiday surcharge. 

Why is it only this industry which feels it has the right to charge extra on these days, and why do we support them?  We the public have the power to vote with our feet and our wallets so let's stop taking this lying down and make a stand!  

Hospitality industry members will say 'but we have to pay our staff public holiday rates'. True – and so does every other business that trades on a public holiday.  Ultimately, admit it or not, the bulk of these operators simply see this as a free pass to boost their income without guilt.

Imagine the outcry if we had to pay 15 per cent more for groceries, fuel or that new couch we just happened to have the time to buy on Boxing Day?  These businesses aren't exempt from paying their staff to work on a public holiday but do not pass on these costs. By default, income will increase on a public holiday – when people aren't at work, they are often out somewhere, spending money.  

**READ MORE:

* Surcharges could be on the up as costs rise

* Surcharge not deterring diners on Queen's Birthday holiday**

My argument to those in the industry is this:

• You have the choice to open or not.  If you don't believe it will be profitable and don't want to pay your staff, don't open.  It's a simple cost v benefit business decision.

• Your business is probably going to be a lot busier than any normal weekday. Take a suburban cafe example: if you get 20 people in on a Monday, you probably get double that if that Monday is a public holiday.  In many cases, staff levels aren't increased, but turnover certainly is.  

• Many of your customers visiting on the public holiday may be regulars. What a lovely way to thank them for their loyalty by making them pay an extra 15 per cent for their coffee and scone! Let's face it, neither is improved (and therefore worth more) because of its being a public holiday.

• The cost of wages is fully tax deductible so the additional gross cost of wages is not the true cost to your business.  

If these businesses actually ran some numbers, they would find they would be on the winning side financially, without the need for surcharges.  Let's work on facts, not perception.

If paying extra to staff on a public holiday is that much of a strain on the business, build this additional cost in somewhere on the other 350-odd days of the year so that you can simply 'be hospitable' to your customers on public holidays.  This may equate to something as small as a 10c increase in the price of one product. 

Over long weekends and the Christmas break, people love to eat out, relax at cafes, head out of town.  The hospitality outlets at those holiday spots benefit hugely from this influx – but, not satisfied with the tills ringing, they have to gouge a further 15 per cent (or more) as a 'thank you for supporting our town and our business' …  

And all the while, the boutique clothing store next door doesn't get to pull the 'hospitality card', it just opens and sucks up the extra cost, so those visitors have a vibrant town centre to browse (and therefore provide clientele for the cafes and bars …).

How is that fair and equitable? Come on, New Zealand, why do we tolerate this?  

So, a challenge for this coming holiday season; make a stand and support those establishments which choose not to charge a surcharge.  Make their day and tell them that is precisely why you are patronising their business and not the one down the road.  

As individuals we can band together and make a change for the good of all and put an end to this inequity.  What a nice thought that in the future we could go out on a public holiday for lunch and a glass of wine without being left with a sour taste in our mouth and significantly less in our pockets.

Pauline Sargisson is a self-employed finance manager and business adviser based in Wanaka.