Businesses 'on the brink': Continued level 2 tough for hospitality

Tuesday, 15 September 2020

Ika Bowl, managing director Ra Beazley says level 2.5 is putting pressure on Auckland businesses.

An Auckland restaurant owner says it’s not a matter of if, but when hospitality businesses will shut down because of current alert level restrictions

Ika Bowl managing director Ra Beazley said his two city centre restaurants were struggling in level 2.5.

Beazley said over the past two weeks his business had been turning over 30 per cent of revenue compared to level 1.

“We’re doing like $100 better a day than when we were in level 3, but we still have the same ongoing costs.”

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This year the business laid off half its staff and closed its outlet in Newmarket.

“A lot of small hospitality businesses are going to start falling over. It’s not a matter of if, it’s a matter of when, at this point,” Beazley said.

He said there needed to be mental health support for small to medium-business owners.

“The worst thing for your mental health is not knowing what is actually happening. The uncertainty is very real. If there’s another lockdown it will be over for a lot of businesses,” Beazley said.

“A lot of people will not come back from a third lockdown.”

Beazley was looking forward to level 1, and more people returning to the city centre.

Hospitality New Zealand chief executive Julie White said the Level 2 and 2.5 extension for another week would push some businesses to the “brink of collapse”.

“We still have operators that can only realistically trade at level 1, due to social distancing measures, so the longer they are closed, the harder it will be for them to reopen,” White said.

A survey by the association revealed in Auckland 16 per cent of hospitality businesses were considering permanently closing their business, compared to 10.7 per cent for the rest of the country.

“I still remain optimistic our sector will recover and come out the other side as the hospitality sector provides the opportunity to get money into the economy quickly.

“However, just like many businesses across different sectors, several hospitality operators will need to make some hard decisions about cost-cutting, from operating hours, reduction in staffing and suppliers,” she said.

The Government’s third benefit for businesses, the Resurgence Wage Subsidy which was valid for two weeks, would have also run out for many businesses.