Not all restaurants will survive this week’s snap lockdown, warns a long-time Auckland hospitality operator.
Mandy Lusk, co-owner of Fort St’s Vivace, says staff left work in tears last night and many diners exited mid-meal, when their cellphones blasted a Civil Defence warning around 8.30pm.
Inner city restaurants had been booked to capacity by Valentine’s Day diners, to the relief of operators who report dismal January turnover.
“We had no-one left by 9 o’clock and we should have been full until midnight,” said Lusk. She co-owns Vivace with husband, Eugene Gibson. The couple estimate they lost $10,000 a week during last year’s lockdowns and refinanced their home to stay afloat.
“Everyone’s just so scared now because we’re back to being banned from trading for three days and there’s no support at all.”
Lusk says restaurants that are unable to trade under level 3 conditions should receive more assistance than businesses that can still operate with staff at home.
“A law firm, for example, can still bill their clients – but a little bar or restaurant has zero income … If they close for longer than a week there is talk of some form of assistance, but we left with staff sobbing last night, going back to being locked in their tiny little apartments.”
Government has previously indicated wage subsidies – currently set at $585 a week – would be available if lockdowns lasted longer than seven days, but hospitality operators say they still have to make KiwiSaver and holiday pay contributions.
“The real worry for all of us now is even if we did open on Thursday, no one will be in town,” said Lusk. “Last night, all you could see in the street was people pulling up in their cars and getting chairs and monitors out of their offices. That went on for three hours.”
Vivace, in Fort St, is surrounded by managed isolation quarantine hotels. Lusk said customers had told her they were nervous about encountering MIQ staff downtown. An ongoing lack of tourists, combined with large corporates allowing staff to work from home, ongoing roadworks and public transport issues (including limited train arrivals into Britomart) had contributed to a 70 per cent trading drop in January, compared to the same time last year.
In a recent small sample Restaurant Association survey, 65 per cent of Auckland respondents said January turnover was less, or significantly less, than 2020. Operators reported a lift after last year’s nationwide lockdown, but said August’s Auckland-only shutdown rocked confidence and the request to stay out of the inner city in November had impacted on Christmas party bookings. While some suburban restaurants were trading extremely well, that appeared to be at the expense of the CBD.
“Each time it’s just got a little bit harder,” Lusk said. “For both retail and some hospitality places there’s no fat left there at all. We’ve had such a dreadful summer … For some places it’s just going to literally get too hard. It’s not knowing how long and not knowing if it’s going to keep happening every time we get three people [with community transmission].”
She said “absolutely” business would close.
“I think this [lockdown] will speed up some people’s decision-making processes”.
Marisa Bidois, Restaurant Association chief executive, acknowledged reports that New Zealand was “doing ok economically” but restaurants had not necessarily benefited.
“Those that can afford it are spending more on big-ticket items and upgrading their homes. Electronic card transactions for December show spending in the retail industries rose 3.5 per cent, but spending in hospitality was down 5 per cent.”
Krishna Botica, co-owner of Cafe Hanoi, Saan and Xuxu restaurants, described summer trading results as “brutal”, particularly for inner-city businesses. Sunday night’s announcement was a blow, given Valentine’s Day bookings.
“Last week, we saw a bounce that looked hopeful. There was some buoyancy after the long weekends … The biggest issue though is the knock-on. Even if we do go to alert level 2 or even level 1, we’re expecting two weeks of very soft trade, because of the panic. People are reminded there’s a pandemic and they’re just not making plans.”
She agreed restaurant industry closures were inevitable.
“I’m sure there will be plenty scrambling, to discuss what they can sell, maybe negotiating with landlords. I can’t think of many restaurants that have got enough cash flow to get through another two weeks of soft trading.”
Botica had been at Saan, on Ponsonby Rd, when the sound of Civil Defence phone alarms shattered Sunday evening’s dinner service.
“It was slightly surreal. All of our bookings still came in, we all had our head down and bums up and suddenly everybody started reaching for their phones and all these date nights looked slightly disengaged from each other – an unusual Valentine’s look, it must be said.”