Level 3 restrictions 'no better than level 4' for struggling hospitality sector

Thursday, 16 April 2020

Proposed Alert Level 3 restrictions will spell the end for many restaurants and result in tens of thousands of job losses, the hospitality industry says.

Prime Minister Jacinda Ardern announced on Thursday that businesses such as restaurants and cafes would be able to resume deliveries and pick-ups when New Zealand moved to level 3 under its coronavirus alert system, but would not be able to reopen.

Ardern will announce on Monday whether the country will move to Alert Level 3 two days later or remain under level 4 lockdown.

Hospitality New Zealand chief executive Julie White said the change would make no difference to most restaurant businesses, and called for the Government to review its guidelines to save companies from going under.

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'If we don't get more specific support for hospitality businesses, it's going to be carnage,' she said.

'Thousands of hospitality businesses will potentially close and that will result in tens of thousands of staff redundancies.'

Although providing takeaways and pick-ups would offer a small amount of revenue for some businesses, many restaurants were not in a position to simply change their core business, which was on-site trade.

Restaurants that could demonstrate safe practices such as physical distancing and water-tight hygiene procedures should be able to open sooner rather than later, she said.

'This is all doable under level three.'

The organisation had lobbied the government for mandatory rent relief, but that had fallen on deaf ears, White said.

To date, about half of the organisation's members had been given no relief from landlords, while the other half had been granted a month's free rent or a reduction in rent payments.

Ardern had so far only asked landlords to 'be kind' to tenants, and that was not working, she said. 'We need the government to step in.'

The industry has also lobbied for a law change to enable businesses with on-licences to be able to deliver food and alcohol off-site.

Restaurant Association chief executive Marisa Bidois said the changes would make a small difference to businesses, but not a significant one.

'It will be the difference between some businesses closing permanently and being able to survive a little bit longer.'

But a lot of businesses were not prepared to switch from a dine-in service to a 'kerbside or delivery business'.

UNCERTAINTY FOR BUSINESSES

Hospitality New Zealand Wellington branch president Matt McLaughlin, who owns several central Wellington bars, said the announcement would leave some businesses in a difficult position.

'Some businesses will be scratching their heads wondering if it will be worth it to open for takeaways.'

The announcement was 'as expected', he said. 'That will help a small part of the industry to some extent.'

Opening a delivery food outlet would be risky because most food would need to be bought in bulk.

'Then you've got all this food sitting around - what happens if nobody buys it?'

To avoid the huge fees from delivery services - sometimes over 30 per cent with partners such as UberEats - businesses had approached the Wellington City Council for help, McLaughlin said.

'We're exploring other options, like whether we can do it ourselves, and speaking to WCC about them helping us.'

Christchurch cafe Arbo co-owner Katie Duncan said closure continuing under level 3 was no surprise. 

'It's a life in limbo,' she said.

Her ANZ Centre cafe relied heavily on central city businesses, and uncertaintly around when that would normalise prevented any business planning. 

'It's been really difficult. Hospitality, we assume, is going to be the last cab off the rank when returning to life as normal because the industry is about people socialising and coming together.

The cafe's 12 staff were 'looking to us for answers' about reopening and timeframes, but 'we can't provide any of them', Duncan said.

In Wellington, Havana Bar and Fidel's owner Roger Young said he was planning to open both restaurants for takeaway and pick-up as soon as possible.

​That would require improving their online service to allow people to click and collect, or providing contactless delivery.

Fidel's had grab-and-go facilities already, with a stall opening from the courtyard onto the footpath.

'We're hoping that we can, at level 3, be able to operate.'

Small numbers of people returning to work would mean a new market for hospitality businesses, with people collecting food from a local business or getting it delivered.

 'Lots of people will be dying for some good coffee.'

On the day before the lockdown, Kebab & Grill Corner sold out by 6pm as people rushed to get a last kebab fix. Owner Sharn Singh said customers had been messaging asking when it would re-open and to say they missed the food.

He and his wife, Mandeep Kaur, bought the Christchurch business last August and have been putting in long hours to build it up. They are trying to view the lockdown as a positive, a chance to take a break and spend more time with their two young sons and Kaur's parents.

The couple are looking forward to being able to offer takeaways during Alert Level 3. The business is on UberEats, and Singh said they were looking to start doing their own deliveries free to customers living near the shop.

The business had received the wage subsidy and it was going OK financially after a good summer, he said. The couple had spent the lockdown thinking how to grow the business; they had recently started offering chips, cheese and gravy before the lockdown, and wanted to add that to the menu and promote it.

'It's the go-to thing for Kiwis, they love chips, cheese and gravy.'