The Southern Lakes, West Coast and Kaikōura had a boost in sales due to international tourists, according to the Restaurant Association's latest report. (file image) Photo: 123rf
Overseas visitors are boosting sales in cafes and restaurants in tourist hotspots but that only reflects some of the conditions faced by the hospitality sector.
The Restaurant Association's latest report paints a mixed picture for many operators hit hard by difficult trading but catering and takeaways defied the downturn.
The industry's annual report showed higher sales of $15.7 billion for the year ended March, but rising costs remained a concern.
The annual growth rate of 5.8 percent was mostly offset by high inflation.
Chief executive Marisa Bidois said the industry was facing a perfect storm of challenges and conditions in the sector were getting worse.
"Mid-2023 saw operators beginning to feel the impact of cost of living pressures on customer spending, which has continued through 2024," she said.
"One of the things we're hearing is that things have progressively declined in 2024, so it has been a difficult year as we've seen those costs continue to increase."
Employers were facing long wait times and increased costs to access the Accredited Employer Work Visa for overseas workers, Bidois said.
"There are some issues that our employers have been facing over the last six to eight months," Marisa Bidois said.
"The wait times for visas and that processing. There was a sharp increase in costs, so there are still issues that the industry would like to work through."
Northland, Taranaki, and Wellington recorded annual sales declines in 2024, driven by specific local challenges.
"One of our top challenges, according to around 78 percent of industry that responded to a recent survey, is that customer downturn is one of the biggest challenges that they are currently facing," she said.
Strong growth was recorded in Gisborne of 20.6 percent, with the Southern Lakes, West Coast and Kaikōura also boosting sales due to international tourists.
The number of hospitality operations nationwide rose to 19,518, reflecting minimal outlet growth of 0.1 percent from 2022 to 2023.
Bidois said despite the hurdles faced, there was growth in various sectors.
One highlight was the catering industry which recorded 19 percent growth over the previous year, with takeaways up 7 percent and clubs up 5.8 percent.
Cafes and restaurants posted 4.6 percent growth, whiles pubs, bars and taverns recorded flat trading at 0.8 percent.