Hurting restaurant trade pleads case for dining vouchers
Thursday, 20 May 2021
Vouchers to encourage people to dine out might cost the Government $75 million, but they would lend vital support to many restaurants on life support, the Restaurant Association says.
The association told the economic development, science and innovation committee on Thursday that it estimated 1000 restaurants had closed since last March, although a more accurate picture by Statistics New Zealand was still being tallied.
One solution, said Restaurant Association chief executive Marisa Bidois, was to borrow the British government’s subsidised dining voucher scheme to encourage people to dine out at a discount.
A similar discount in New Zealand would equate to about $20 a person, she said.
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**
“We’ve seen the Australian government introduce something similar where people were given the option to use these vouchers at a tourism establishment or a hospitality business.
“It’s not a huge amount but it can be enough to get people dining out again … and it’s supporting their local businesses.”
Bidois’ presentation was requested by the select committee following the Dine out to Help out petition to Parliament last year calling for targeted support for the sector.
While the industry was recovering strongly in some pockets of the country, she said other areas like Queenstown were still struggling.
“The reality is that many of our hospitality businesses, while they did have loans available to them, over the last 12 months, many of them are still paying off those loans,” Bidois said.
“Many have moved out of their homes and are renting now to be able to manage the debt … and in fact we still have some businesses in leasing disputes that happened over Covid.”
Auckland chef Luis Cabrera said he was a case in point. He owned two Mexican restaurants, a new one at Wynard Quarter and a now-closed one in Elliott Stables.
The Elliott Stables business had been thriving since 2010. Situated within an upmarket food court, it was close to the Civic Theatre and Queen St.
“The rent was over the roof but we did good traffic.”
But when the foot traffic failed to return after lockdown, Cabrera had to put the restaurant into liquidation last October.
With a number of staff still employed, the rent versus income became unsustainable, he said. “One day we did $87.”
The length of his lease is still in dispute.
The landlord at the newer establishment had been more helpful, and Cabrera thought a voucher system would be good news to get the foot traffic flowing.
But it would be better if they were tied to the trade's quieter nights, he suggested.
“Talking to many of my friends, many are considering closing or very, very close to closing their doors. We need something to give incentive to people to dine out.”
Restaurants and cafes are also faced with a major skills shortage, and Bidois said there were some deep concerns about the Government's latest comments around clamping down on immigration.
About 15 per cent of the industry’s workforce were migrants, and prior to Covid, it was closer to 30 per cent, Bidois said. A lack of staff was holding some businesses back from expansion.
In the meantime, the restaurant trade was getting behind a new campaign to train up and place unemployed Kiwis in the industry.
Perceptions of the hospitality trade being low waged and involving long hours lingered.
“Of course when you first start, you’re not going to be paid top dollar, but talking to a lot of our chefs in our latest remuneration survey, at executive chef level, you can be making $80k a year”.
Hospitality hours also worked well for some people who wanted to pick up extra work around childcare or other activities, she said.