The Voice of Hospitality

LET’S TALK HOSPITALITY 2020SURVIVE • REVIVE • THRIVE

TO

TAL ANNU

AL

R

E V E N U

E

$6 Billion GDP contribution

(March 2018)

$14 Billion Annual Revenue

$40 Million Daily Revenue

FOOD &

B

E V E R A G

E

18,000 Businesses

$11 Billion Annual Revenue

131,000 Employees

AC

CO

MMODATIO

N

3,000 Businesses

$6 Billion Annual Revenue

39,000 Employees

CO

MMUNITY

FU N D I N G

$276 Million Community Funding

Class 4 Gaming11,500 organisations

21,000 Grants

W

ORKFORC

E

BU

SIN

ES S ST RENG

TH

170,000 Employees

22,000 Businesses

S E C T O RLet’s Talk Hospitality 2020 • Page 1

Kim Odendaal (Auckland & Northland)

Alan Sciascia (Bay of Plenty, East Coast, Hawkes Bay & Waikato)

Darelle Jenkins (Auckland & Waikato)

Adam Parker (Wellington, Manawatu,

Whangarei, Taranaki)

Our voice across New Zealand

Kelly Crawford (Westland, Nelson,

Marlborough, Buller)

Anna Halliday (Canterbury, South Canterbury)

Amy McLellan-Minty (Christchurch)

Charlotte Simpson(Otago, Central Otago, Southland)

Vacancy (Wellington, Wairarapa, East Coast, Hawkes Bay)

THE VOICE OF HOSPITALITY

Hospitality New Zealand is Aotearoa’s leading nationwide hospitality association. Hospitality New Zealand has 3000 members covering our two main sectors - commercial accommodation providers and food/beverage businesses. Our association was first formed in 1902 and we are proud to have this long history of helping New Zealand businesses and communities for over 100 years, and look forward to supporting members for many more years to come.

We work to:

• Help our members make their businesses successful, profitable and compliant.

• Offer training opportunities, industry resources and updates, and specialist guidance and advice.

• Advocate for the industry and our members at a national and local government level.

• Support the hospitality industry as a single voice.

• Give back to our communities.

Julie WhiteChief Executive

National Service Centre (Wellington)

Let’s Talk Hospitality 2020 • Page 2

LET’S TALK HOSPITALITY 2020SURVIVE - REVIVE - THRIVE

The key priority for Hospitality New Zealand following COVID-19 is the immediate survival of the industry, and a clear pathway to revive and thrive. The hospitality industry makes a major contribution to the New Zealand economy as a whole. It is important for all of our New Zealand communities that it is successful.

Our industry does not exist in isolation. It is responsible for providing many of the services that contribute to, and cater to, both kiwis and international visitors.

Our industry has been devastated by COVID-19. The Government has the next three years to work with us to ensure the hospitality industry can have a pathway to Survive, Revive, and Thrive.

Let’s Talk Hospitality 2020 provides an overview of the challenges we face. Hospitality New Zealand is committed to working with Government to ensure these barriers to industry success are mitigated and ideally overcome.

OUR INDUSTRY PRIORITIES

Hospitality Industry Support

Package

Minister Of Hospitality

Regulation Revision

Short-Term Rental

Accommodation

Freedom Camping

Supporting Hospitality Workforce

Infrastructure Funding &

Management

Gaming Policy

Sustainability

HOSPITALITY INDUSTRY SUPPORT PACKAGE

Hospitality New Zealand calls on Government to work with the hospitality industry to design and implement a targeted support package to help businesses return to sustainable trade.

Priority: Much of Government support initiatives have not been applicable to hospitality businesses. Recent years have seen increased fees, regulation complexity, and poor Government policy heavily impact hospitality business.

Our members have upskilled themselves and their employees where possible, created and implemented innovative cost-saving measures where available and adapted to the changing environment to ensure their survival. Hospitality businesses will be able to return to profitable trade post-COVID-19 but many need help to get there.

Let’s Talk Hospitality 2020 • Page 3

3000 MEMBERS

70% Motels, 15% Hotels, 15% Other8000 Accommodation rooms

2000 FOOD & BEVERAGE

74% Restaurants, Cafes, Takeaways, GastroPubs and Taverns 26% Bars, Pubs and Nightclubs Venues

1000 ACCOMMODATION

Worth $10 Billion in Assets

CLASS 4 GAMING

$276 MILLION

80% are HNZ

Members

18,000 businesses131,000 staff

BARS/RESTAURANTS / C A F E S / C L U B S F U N C T I O N S

A N N U A L R E V E N U E11,764,000,000

Daily Revenue

$32,230,137

HOSPITALITY SECTOR STATS

3,000 businesses39,000 staff

ACCOMMODATION

A N N U A L R E V E N U E2,236,000,000

Daily Revenue

$6,126,027

21,000 businesses170,000 staff

T O T A LA N N U A L REVENUE14,000,000,000

Daily Revenue

$38,356,164

Growth in revenue 6.5% 4 year average

Employee growth 5.1% 4 year average

Increase in wages 5.4% 4 year average

Outlet Growth 3.6% 4 year average

AVE Staff / Venue 7.28 people

AVE Turnover per business per week - 12,568

Community Benefit11,500 community

organisation20,900 financial

grants

$

18 BRANCHES NATIONWIDE

MINISTER OF HOSPITALITY

Hospitality New Zealand calls on Government to establish a Minister of Hospitality, with a dedicated hospitality unit with MBIE.

Priority: The Food Services and Accommodation sectors generate over $14 billion in annual sales, contributes over $6 billion to GDP, and employ over 170,000 people across 21,000 businesses. Hospitality plays a critical role in New Zealand’s cultural fabric, economy and tourism industry.

Hospitality is not appropriately understood or valued within the government policy strategy. Hospitality operates both a day-time and night-time economy. Development of concurrent strategies, support systems and governance to support these individual economic contributors will bring significant economic and employment benefits across many touchpoints.

REGULATORY REVISION

Hospitality New Zealand calls on Government to prioritise a regulatory review for the hospitality industry and to work with the industry to improve regulations, ease compliance costs and give businesses a clear operating framework.

Priority: The impact of new and revised legislation and regulation has created uncertainty for business operators, leaving them unable to plan for the future. This includes changes to immigration rules, the Employment Relations Act 2000, the Sale and Supply of Alcohol Act 2012, Health and Safety Act 2015 and the Food Act 2014.

Also, the minimum wage increase has led to a seven percent impact to the bottom line of many hospitality businesses, where profitability sat below ten percent.

Increased regulatory and compliance costs leave businesses with little alternative other than to raise their prices or reduce staff. There is a limit to how much increased costs consumers will pay.

Let’s Talk Hospitality 2020 • Page 4

1 Stats NZ – Accommodation and the sharing economy in New Zealand

SHORT-TERM RENTAL ACCOMMODATION

Hospitality New Zealand calls on Government to acknowledge, regulate and create a framework for the STRA sector. Rebuilding post-COVID-19 requires every sector to do their fair share.

Priority: Growing inequity in the regulation of short-term and long-term accommodation.

Traditional commercial accommodation providers face serious competition from the rapid growth of short-term rental accommodation (STRA) providers like Airbnb and Bookabach. Stats NZ estimated for 2018, STRA gross revenue was between $550-$700 million, with guest nights between $6-$10 million.

The STRA sector operates mainly in residential areas, only pays residential rates, operates with less regulation, and often escapes appropriate taxation.

Where councils have tried to regulate STRA operators, barriers for regulation include identification of STRA properties, lack of cooperation in data capture from operators and booking platform providers, and consistent regulation between local councils.

As more people look to non-traditional STRA, safety standards, hygiene standards, and contact tracing becomes significant guest care factors and priorities post-COVID-19. We face negative impacts of an unregulated and substandard product offered to both local and international visitors.

FREEDOM CAMPING

Hospitality New Zealand calls on Government to develop and strengthen appropriate regulations for Freedom Camping, and create infrastructure cost support for the future.

Priority: Freedom Camping is a major issue where the infrastructure is inadequate. This places a considerable burden on local facilities and the environment. Additional pressure on commercial accommodation operators is apparent (e.g. Freedom Campers using facilities at commercial venues that are intended for paying guests).

SUPPORTING HOSPITALITY WORKFORCE

Hospitality New Zealand calls on Government to encourage and incentivise hospitality career pathways and invest in training for Kiwis in Hospitality as quickly as possible to support a strong talent pipeline.

Priority: There was already a significant shortage of ready and appropriately skilled people available for the sector prior to COVID-19.

Attracting more New Zealanders into the industry is vital to its future. The industry faces a potential five year journey to bridge the labour market skills shortage that was filled by migrant workers, and to upskill and train more Kiwis.

Pathways need to include funding and development of leadership, upskilling, resilience and mentoring programmes for small business owners.

Let’s Talk Hospitality 2020 • Page 5

INFRASTRUCTURE FUNDING & MANAGEMENT

Hospitality New Zealand calls on Government to introduce a consistent and fair nationwide approach to the funding of core infrastructure.

Priority: Core infrastructure needs to be upgraded, especially in high-demand areas, otherwise the hospitality industry risks being further compromised.

Hospitality and accommodation sectors are viewed by local councils as an easy source of funds, via targeted rates on commercial businesses, or implementing bed taxes. There must be fairness in these funding mechanisms, and the benefit principle should apply.

SUSTAINABILITY

Hospitality New Zealand calls on the Government to adequately fund the Tourism Sustainability Commitment, re-shape the commitments to support multiple sectors and industries. Better incentivise all New Zealand businesses to implement sustainable business practices.

Priority: Sustainability is an important issue facing the world, and an increasingly important consideration for hospitality businesses. Hospitality operators are striving to create a more sustainable industry by reducing waste, increasing sustainable procurement, better utilising local producers and improving recycling practices.

GAMING POLICY

Hospitality New Zealand will work with Government to help provide further insights and understanding of important issues relating to Class 4 Gaming.

Priority: Over the last ten years, the problem gambling rate has remained the same, despite gaming machine numbers declining rapidly (4,618 gaming machines have been removed from the market). The reasons for increases or decreases in problem gambling is simply not the direct result of an increase or decrease in gaming machine numbers.

Moving gamblers away from licensed physical gambling premises allows gamblers to choose unregulated and unmonitored online gambling. A New Zealand Government cabinet paper in September 2018 on online gambling indicated New Zealanders have gambled approximately $300 million with offshore providers in 2017, with the market growing annually between 12-20 percent. The paper notes that health professionals and treatment providers have expressed concern that online gambling may be more harmful than some existing on-premise gambling.

Venue relocation, which is currently restricted in some instances, is an important harm minimisation tool. It allows venues to move out of residential areas to more suitable areas, such as the Central Business Districts or entertainment precincts.

Let’s Talk Hospitality 2020 • Page 6