Coronavirus: Hospitality industry wants up to six months of wage subsidies to save jobs

13 Mar 2020

CLICK HERE FOR ORIGINAL ARTICLE BY: Stuff, Amanda Cropp, Christchurch Business Bureau Chief


Coronavirus: Hospitality industry wants up to six months of wage subsidies to save jobs


The hospitality industry says business is falling so much wage subsidies may be needed for up to six months with thousands of jobs on the line.


Representatives met Tourism Minister Kelvin Davis and Finance Minister Grant Robertson on Thursday morning to press their case for financial assistance as domestic, international and business travel continues to drop. 



Hospitality NZ is warning that some businesses may need wage subsidies for up to six months if they are to survive the economic shock of coronavirus. (File photo).


ESTHER ASHBY-COVENTRY

Hospitality NZ is warning that some businesses may need wage subsidies for up to six months if they are to survive the economic shock of coronavirus. (File photo).

Hospitality NZ chief executive Julie White said her 3000 members employed about 30,000 people in bars, restaurants, cafes, bakeries and commercial accommodation, and more than half had revenue affected by coronavirus.



​She said it was reassuring that Government support would be available, but there were still concerns about its duration. 


Cafes, bars, restaurants and hotels are all suffering from a down turn in business since coronavirus struck. (File photo).




NEAT PLACES

Cafes, bars, restaurants and hotels are all suffering from a down turn in business since coronavirus struck. (File photo).



"My concern is how long that support will last because our low season is more than three months ... it needs to last between three and six months."


White said 80 per cent of respondents to a recent survey indicated they would need to reduce staff. "We're predicting that could equate to at least 5000 full and part timers."


The April 1 increase in the minimum wage would put added pressure on many small businesses facing reduced cashflows and Hospitality NZ had asked the Government to delay provisional tax for six months to help compensate for the difficult conditions. 



 

Coronavirus has turned off New Zealand's second largest tourism market virtually overnight.


The NZ Hotel Owners Association, which represents 100 hotels employing about 9000 workers, said targeted wage subsidies should be available across the country and not just in the regions because the impact of the Covid-19 coronavirus was being felt everywhere.


Chief executive Amy Robens​ said members had put a freeze on all employment, reduced casual and part-time staff, and were redeploying workers where possible.


"In some instances hotel owners have been able to cross train staff so they can work in other departments to try and keep their hours up."


The dramatic drop in the Chinese market following border closures is reflected in the latest provisional travel figures from Statistics NZ.


 


Chinese visitor arrivals were down from 20,200 in the last week of January to just 560 in week ended February 25.


One Rotorua  hotel heavily reliant on Chinese business reported 27 per cent occupancy for the first quarter of this year, compared with 90 per cent for the same period last year. 


Robens said cancellations were now coming from a range of sectors and countries and one hotel had lost  $5 million worth of business so far.


Hotel owners were anticipating a 20 per cent drop in profit for the remainder of 2020, but this figure was likely to increase.


Bookings for conferences and meetings were being cancelled and there had been a drop in domestic guest nights as New Zealand companies put a freeze on business travel.


"There are a number of special interest and sports events that are now becoming marginal and likely to be cancelled or postponed, which will affect the hotels that had reservations for these groups.


"Impacts are also being felt across hotel food and beverage offerings with cancelled banquets and events amounting to millions in lost revenue," Robens said.


Forward bookings for next summer were declining as international travellers became increasingly apprehensive about being caught up in disruptions or held in quarantine. 


India has been an increasingly important source of visitors over winter months, but a recent Indian Government edict requiring Indian Nationals to go into quarantine for at least 14 days on their return home could deter long haul trips to destinations like New Zealand. 

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