Hospitality sector calls for immediate return to alert level 1 in South Island

Thursday, 16 September 2021

The hospitality sector in the South Island must return to alert level 1 “immediately” as the financial situation becomes desperate for many businesses, a prominent industry insider says.

Graham Hawkes, an Invercargill chef and president of the Southland branch of Hospitality New Zealand, said he had spoken to dozens of Southland hospitality businesses in the past few days and their situation was now desperate.

“We’re in a Catch-22: we’re protected from Covid in Auckland, but we can’t do anything inside our protected island. We can’t get back to [normal] business for ourselves.”

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Customer numbers had dropped markedly for many hospitality businesses under alert level 2 compared with pre-lockdown levels, he said.

“We are just not getting the numbers out dining, they are just not coming … that’s the biggest issue.”

“The problem we have is there’s mixed messages out there, and stay at home is the big one, and people are staying at home.”

Some people didn’t want to wear masks when going out and others were concerned to go out.

The ongoing lockdown in Auckland removed millions of dollars from being spent in the South Island, but level 2 prevented hospitality businesses from operating with enough customers to break even, he said.

Permanent closure was an option for some businesses.

“Most have burned through savings, and many are again in debt, but there is no bounce back to rescue us this time.

“The wage subsidy helped in level 2 last year, but in level 2 [this year] you must have evidence that your revenue loss is solely due to the Auckland lockdown.”

Level 2 limited the income of businesses by limiting customers, but raised costs by requiring more staff to serve them, he said.

“That means very few of us can break even in level 2.

“On top of that, the general mood is very flat. People are worried far more than last time. Optimism is down. Uncertainty is up.”

Hawkes said it was not clear if levels would change and whether there would be enough government support to cover costs in the meantime.

“The hardest part for owners and staff is the uncertainty – to know whether any of us will still be in business next week.”

Prime Minister Jacinda Ardern has said an alert level drop outside of Auckland won’t come until the city’s lockdown stops new Covid-19 infections. But an epidemiologist has warned stopping transmission among essential workers and in deprived households could take weeks.