As the pandemic escalates, New Zealand’s already-struggling restaurants and bars are wondering how they’ll get through.

The New Zealand hospitality industry is bracing itself as the coronavirus pandemic continues to escalate. 

Chinese restaurants have been hit hardest, with many entering their second month of seeing business down by up to 50%. But now, in the wake of the official declaration of a pandemic, the US and Australia imposing mass restrictions on travel and gatherings, and the world’s stock markets plummeting, the fallout is extending to the New Zealand industry as a whole. 

Yesterday, the Moa Group was the biggest loser on the NZX. While best known as a brewer, the company has a hospitality subsidiary, Savor Group, that owns the likes of Ostro, the Auckland Fish Market, Azabu and Non Solo Pizza. Restaurant Association chief executive Marisa Bidois told the Herald yesterday that 176 of its member restaurants were on the brink of shutting down because of the downturn. 

The Spinoff spoke to a number of people working in the hospitality industry about how they were doing, and their fears for the future. 

An uneasy waiting game

“We haven’t had much impact overall just yet, but we are seeing specific sites impacted,” said one industry figure, whose business has nationwide reach. “Those which rely on tourists are already down, and it’s getting worse. Based on what we’re seeing out of Europe, it is likely to get really bad.”

A director of a large Auckland Chinese restaurant that has been feeling the pinch for some weeks said they were hanging in there by offering deals and drumming up support from loyal regulars. The events of recent days have him worried, however. “With what’s happening with the world stock markets in the last few days – everything’s just going down down down – I’m worried that that’s going to have an impact on business moving forward.”

The owner of a high-end Wellington restaurant said he hadn’t seen much of an impact yet, but bookings had softened for the coming weeks. There are yet to be any confirmed Covid-19 cases in the capital, but “it will take just one case to change that, and the geographic/population nature of Wellington means its impact will be sudden and wholesale”, he said. “If it happens, that will accelerate the potential recession and downturn in our industry.”

Another Auckland restaurant owner said “it’s starting to creep in”, but thought restaurants with an older customer base were likely feeling it more. She had heard some restaurants were struggling to such an extent that suppliers were not getting paid.

Staffing implications

“I don’t want to scaremonger, but if a lot of people get this, I’m less concerned about revenue – we can survive a 20%-30% hit there – but we have to worry about labour,” said the industry figure. “How will we even stay open?

“We’ve never seen anything like this,” he continued. “If people are off work because they’re self-isolating, you don’t legally have to pay them. But I believe we have a moral obligation to. The problem is, for many places, if you follow your morals and pay people, your business closes. So what are you meant to do?

“And hospitality is not a high-paying industry,” he added. “People can’t survive if they’re not paid for a couple of weeks.”

The Wellington restaurant owner said he was yet to formally broach self-isolation with staff, “but it has been a topic over lunch, and we have discussed at length strategies for hygiene and safe practices”.

Safe practices were also a focus for an Auckland bar manager we spoke to. “It’s basically being careful about what you’re touching – we have hand sanitiser stations all around. There’s no point quarantining yourself at home and not coming out.”

Scope for support

While some restaurateurs had received help from landlords in the form of rent reductions, the Auckland Chinese restaurant director said he’d had no such luck. “They’re not prepared to do anything just yet. They’re a bit tough. I guess we just have to ride it out. There’s not much we can do at this stage.”

The owner of another large Auckland bar and restaurant said, “Ours [the landlords] are incredibly ruthless. They are renowned for being without mercy. They know that if you default, you’re on the hook for it.”

The outlook

“Absolutely,” said the Auckland bar manager when asked if he was worried. “In New Zealand we’re kind of lucky we’re so isolated from everything, but it’s not looking too promising.”

Added an Auckland restaurant owner, “if hospo gets shut down like what has happened in Italy, we are absolutely fucked”.

Those with a takeaway side to their business were in better stead than most, added the bar manager, as they were poised to capitalise on people staying home. The Wellington restaurateur said this was something he had discussed with his business partner and staff – “a kind of glamour Uber Eats”.

“We have to prepare for the worst-case scenario,” said the industry figure. “As of three days ago, that’s what we’re doing.”