Hospitality New Zealand Incorporated

The Future of Hospitality in New Zealand: How the Industry is Adapting

If it’s been said once, it’s been said a thousand times: the lockdown and border closures of Covid-19 inflicted the hardest hits and presented the biggest challenges the New Zealand Hospitality sector has ever faced.

But with that all firmly in the rear-vision mirror, the industry is now faced with a challenge that could have longer-term ramifications than any threatened by those dark days.

There’s no doubt the industry has bounced back – and bounced back well.

Many hospitality and accommodation operators defied the odds, with fears of widespread failures thankfully not as bad as predicted, though some great businesses and excellent people were lost to our industry.

That the damage was not worse is down simply and purely to the resilience and bloody-mindedness of everyone involved – employers, employees, and suppliers alike.

Thanks to them, the recovery has been nothing short of remarkable, considering our borders were shut to our international visitor lifeblood for so long, and there is now a general positivity among operators despite the pressure coming on businesses in the cost-of-living crisis. Many are focused on what is in their control and will deal with what isn’t as and when they need to.

The industry is certainly looking forward to the coming summer, our traditional busy period, to continue the recovery and growth of businesses.

But while Sunday brunches, evening dinners, a few quiet drinks with friends, and a weekend away are, to all appearances, back and humming, all is still not quite right.

The notices on the front doors are the clue.

The reduced opening days, the shorter hours, the slower service, and the later check-in times point to an industry under severe pressure for staff, skilled or otherwise.

Though we can relieve some of that pressure in the short term by relying on migrant workers, it’s what this means in the longer term as international tourism climbs back as the world sees we are finally open for business, and irritants such as the 7-day Covid stand-down for visitors are ditched.

It’s hard to overstate the impact of Covid on the sector, and the Tourism Satellite Account from Stats NZ shows it clearly.

In 2019, food and beverage and accommodation services contributed a whopping $8 billion to the national economy.  But by last year, that had plunged by 46 per cent to $4.3 billion.

That is a massive hit in anyone’s language.

The border closures, lockdowns, ongoing cost pressures, and restricted disposable income all had an impact.

But while those and the lockdowns meant customers were few and far between for many businesses for long periods, over the long term the prevalent issue was – and is – access to workforce.

Average staffing nationwide fell off a cliff after 2020, and it has basically stayed there.

Some of this, of course, can be put down to immigration factors and a lack of working holiday visa holders already here.

Immigration plays a key role in enabling both our sector and the economy at large to function.

It’s not about pushing Kiwis out of work, because we are at historically low unemployment rates and immigration will plug skills gaps and solve part of the industry’s skills shortage. There’s nothing the hospitality industry would like more than to employ Kiwis, and many more of them. That will to a long way to ensuring our sustainability into the future.

But going by latest estimates, we will continue to be short-staffed for some indeterminate time to come.

A report from Perform X and Dot Loves Data, an industry partnership assessing workplace performance, estimates that in 2025, cafes and restaurants will be short 2767 staff, or 3 per cent of the workforce. The outlook is even worse for pubs and bars, which will be short 1934 staff (14 per cent of the total), and hospitality clubs, which will be 726 short (18 per cent of the total).

These are massive gaps, and despite our very best efforts, we are going to need help to close them.

It’s certainly not been due to lack of trying on our part. We have promoted hospitality as an industry that provides options and opportunities for those looking for flexibility in their work hours, and those entering or re-entering the workforce, demonstrating the long-term career pathways within the industry, and investing in on-premise training to attract talent,

Hospitality NZ’s Knowledge Hub has been putting a huge amount of work into supporting the development of the workforce by way of a wide range of workstreams.

This has included working with Ringa Hora Services Workforce Development Council, Te Pukenga, and Service IQ on the Reform of Vocational Education to help ensure our industry’s needs are articulated and voices heard.

We have forged strong partnerships with a range of training providers, including in-job, in-person and online, so we can offer extensive training options and highlight the importance of training and development to both attract and retain our workforce.

One of our big successes has been our online platform Typsy. This provides an excellent means of consistently developing entry and intermediate level skills as our industry continues to rely on new, inexperienced entrants and seasonal workforce. Typsy contains a library of more than 100 courses for both hospitality and accommodation businesses, and to date more than 100,000 lessons have been completed on it.

A key area of workforce development is centred on leadership. With a shortage of skilled leaders there is a need to develop these capabilities and show industry career pathways. To further this, Hospitality NZ has partnered with world-renowned leadership trainer Shane Green to deliver the Future Leaders programme.

Elevating operators’ compliance to best practice standards has also been a focus for us, an example being the provision of standardised and highly accessible online training on the Responsible Service of Alcohol Standards.

We also recognise wellbeing plays a vital part in helping attract, develop and retain staff, and we are working with Healthy Hospo to raise awareness of this and provide tools, resources, and leadership skills to ensure our people are taken care of in the best way.

Our workforce development streams also extend further into knowing who the people are who make up our workforce and the talent pools we can draw on to extend skills and help ensure a strong and vibrant industry into the future.

All these initiatives are starting to pay dividends, but they will take time to show up in more open days, more hours, and earlier check-ins.

In the meantime, the prevailing policy narrative about hospitality being low skilled and low wage fails to recognise the diversity of options in our sector and continues to undermine that hard work.

We will not be able to adequately reduce reliance on migrant workers unless and until we can collectively change this narrative and promote hospitality and tourism as a viable and fulfilling career option for New Zealanders.

Though Hospitality NZ’s staff training platforms and resources are working, we can’t do this alone, and we more cuts to funding for some training providers, as has happened, is the opposite of what is needed.

Rather, the Government needs to increase funding for apprenticeships and on-the-job training, and to consider tax rebates for employers who are committed to training programmes. Those are things that will make a big difference.

If we are serious about attracting more Kiwis into this vital industry then that’s the least that needs to happen.

AT A GLANCE

Hospitality New Zealand Incorporated

What: A leading association, that seeks to unlock the industry’s full potential as a significant engine for growth in the New Zealand economy.  Hospitality New Zealand, the Voice of the hospitality industry.

Where: Wellington, New Zealand

Website: https://www.hospitality.org.nz/s/