Latest / Best of Business / Marisa Bidois: Restaurant Association CEO on the hospitality sector's record high revenue but low profit margins

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Marisa Bidois: Restaurant Association CEO on the hospitality sector's record high revenue but low profit margins · Best of Business

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  Speaker 2: So you might have noticed a light in the spending numbers,
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  Speaker 2: although many are still struggling, the hospital sector seeing a bump.
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  Speaker 2: Their annual report shows record sales of fifteen point nine billion,
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  Speaker 2: takeaways up three point two percent to four point four billion, cafes,
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  Speaker 2: restaurants up zero point three percent to seven point eight billion.
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  Speaker 2: International visitor spending our climb nine point two percent out
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  Speaker 2: eighty six percent of pre COVID. Marissa bidwires the CEO
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  Speaker 2: of the Restaurant Association, and is with us.
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  Speaker 3: Good morning, Good morning Mike.
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  Speaker 2: How do we argue two different things? You argue that
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  Speaker 2: things are tight, they're strained, and yet you're pulling in
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  Speaker 2: record money. How do we explain that?
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  Speaker 3: Well, Look, as you've mentioned, we've seen record sales for
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  Speaker 3: the year, but that doesn't necessarily mean record profits. The
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  Speaker 3: one point four percent revenue growth that we've seen has
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  Speaker 3: really been eroded by rising costs. Food prices are at
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  Speaker 3: four point six percent, wages continue to climb, and insurance
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  Speaker 3: and rent have all gone up as well. So while
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  Speaker 3: the numbers look good, on paper, margins are tighter than
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  Speaker 3: ever from operators.
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  Speaker 2: We have seen those spending increase in hospital for the
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  Speaker 2: last couple of months. There's something going on there. Do
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  Speaker 2: you know what it is? Is it tourism or is
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  Speaker 2: it locals just feed up and they want a sandwich
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  Speaker 2: in the beer.
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  Speaker 3: Look from what we're seeing, it is an uptick in
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  Speaker 3: tourism numbers, which is such a positive sign for our
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  Speaker 3: industry and very much welcomed.
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  Speaker 2: Is it the immigrant issue as well, in the sense
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  Speaker 2: that are we over hospited? In other words, people come
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  Speaker 2: to the country and they go and I'm going to
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  Speaker 2: buy myself a cafe, whether they know what they're doing
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  Speaker 2: or not.
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  Speaker 3: Look, I think, you know, hospitality is a very accessible
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  Speaker 3: business model, but I think that's what makes it dynamic.
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  Speaker 3: That's why as a consumer of hospitality, you know you're
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  Speaker 3: in a great position. There's lots of people wanting to
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  Speaker 3: open businesses, try creative, you know sort of business models,
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  Speaker 3: so it really is great for consumers. However, it does
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  Speaker 3: mean that there is some risk with that business model.
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  Speaker 3: That's why we always encourage people to seek business advice
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  Speaker 3: before opening the doors.
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  Speaker 2: People still seem to be piling up though don't they.
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  Speaker 3: Well, look it is we are seeing some subdued numbers
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  Speaker 3: in terms of diners. Your household budgets are constrained, but
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  Speaker 3: people are still dining out. They're just adjusting the way
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  Speaker 3: they're dining out, spending a bit less, grabbing the shared plates.
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  Speaker 3: They still want to dine out. Kiwi's love hospit and
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  Speaker 3: that's why our industry continues to keep moving forward.
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  Speaker 2: There's also a luck story, isn't there If you're near
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  Speaker 2: the CRL in Auckland, if you're not in the tourist
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  Speaker 2: area like Queenstown. You know what I'm saying. If you're
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  Speaker 2: in the wrong place, you've got trouble and there's not
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  Speaker 2: a lot you can do about it.
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  Speaker 3: Absolutely, and we've seen that. We've seen you know, some
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  Speaker 3: regions have been hit harder. Our CBDs are struggling as well.
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  Speaker 3: We haven't seen the sort of foot traffic get back
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  Speaker 3: to pre COVID levels yet. So look, there is it's
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  Speaker 3: a two feet economy in a lot of ways. There
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  Speaker 3: are some areas that are doing very well and others
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  Speaker 3: that are struggling.
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  Speaker 2: All right, Marissa appreciating Marissa Bidwell, chief executive of the
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  Speaker 2: restaurant Association.
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