Latest / Best of Business / Business Panel: Hospitality NZ CEO Steve Armitage and Retail NZ CEO Carolyn Young

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Business Panel: Hospitality NZ CEO Steve Armitage and Retail NZ CEO Carolyn Young · Best of Business

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Speaker 3: Join us for our business panel this week. And I
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Speaker 3: really enjoyed this. Part of the show is Hospitality New
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Speaker 3: Zealand CEO Steve Armitage. Steve, welcome to the show.
0:51
Speaker 4: Good mornings.
0:53
Speaker 3: How how are you feeling a bit cold out there?
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Speaker 5: It is bracing out there in the elements here, so
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Speaker 5: I just find down from Auckland, so it's just as
1:01
Speaker 5: cold up there. Dough to be fair, but a bright
1:03
Speaker 5: blue sky to compare with the gray O.
1:06
Speaker 3: What's apparently supposed to lighten up? And we'll we'll I'm
1:09
Speaker 3: going to get into lots of conversation with you and
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Speaker 3: Retail New Zealand CEO Carolyn Younger, Morning, Carolyn.
1:14
Speaker 6: What in a nick? How are you doing.
1:16
Speaker 3: I'm doing great now. I walk down Lampton Key on
1:19
Speaker 3: Saturday and I thought about you. I thought, by god,
1:25
Speaker 3: you know, I know personally how tough it is in
1:27
Speaker 3: my industry, but I don't think i'd like to own
1:30
Speaker 3: a small I don't think i'd like to be vance
1:32
Speaker 3: Vivian Right now. In Wellington there was just no traffic.
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Speaker 6: It's really tough, right and when you've got me. We
1:40
Speaker 6: had a particularly cold weekend with highs of five and
1:43
Speaker 6: six degree, wintil factors of about one percent, and it
1:46
Speaker 6: doesn't entice people out, but you know, there are some factors.
1:50
Speaker 6: Sometimes it's you know, you've got to pay for parking,
1:52
Speaker 6: you know, being able to access into the city. It's
1:55
Speaker 6: got to be easy for people to want to come in.
1:58
Speaker 6: And we're doing that off the base where it used
2:00
Speaker 6: to be free weekend parking and so people would come
2:02
Speaker 6: into the city and they could park, and they could shop,
2:05
Speaker 6: and they could go to lunch and have a great
2:08
Speaker 6: time in the city. And all of those things feel
2:10
Speaker 6: too hard. And I've had people telling me they spend
2:12
Speaker 6: more time going out into the suburbs or going to
2:15
Speaker 6: the malls because it's easier.
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Speaker 3: Do you remember when Saturday mornings used to be an event.
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Speaker 3: Saturday morning of walking down you know, Queen Street or
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Speaker 3: Lampton Key with your parents used to be an event.
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Speaker 3: Go out and buy a new pair of jeans and it.
2:30
Speaker 6: Ages us a little bit. But I remember when shops
2:33
Speaker 6: didn't open on the weekends.
2:34
Speaker 3: Yeah, I don't want to talk about that. It's good. Yeah,
2:37
Speaker 3: but do I remember that too? But I was like
2:39
Speaker 3: four years old, Steve tell me, I mean, you're at
2:42
Speaker 3: Auckland based, So is it the same in Auckland as
2:45
Speaker 3: Wellington got its own because everyone thinks that Wellington's got
2:49
Speaker 3: trials and tribulations on their own.
2:51
Speaker 2: Yeah.
2:52
Speaker 5: I think for the last eighteen months to two years,
2:53
Speaker 5: Wellington has borne the brunt of the commentary around the
2:57
Speaker 5: struggles of hospitality very well traversed territory, around government cutbacks,
3:04
Speaker 5: the reduced number of public servants and just the reduced
3:07
Speaker 5: football in the city center here. But in recent times
3:10
Speaker 5: Auckland has also started to find things they're going pretty tough.
3:14
Speaker 4: There's a huge.
3:15
Speaker 5: Amount of reliance on the CRL and nz ICC convention
3:19
Speaker 5: center opening in Auckland, but ultimately they're still lacking an
3:22
Speaker 5: incentive to get people into the city. You need an occasion,
3:25
Speaker 5: You need events to stimulate that foot traffic because as
3:29
Speaker 5: Carolyn's just touched on, accessibility and the cost to get
3:32
Speaker 5: into venues is increasingly difficult for people.
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Speaker 3: Tell us right now, how you're feeling hospitality is what
3:40
Speaker 3: sort of state is hospitality? It's only feels like yesterday.
3:44
Speaker 3: I was talking to carry Print of Gas on the
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Speaker 3: show Dame Carey Print of Gas, when she was in
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Speaker 3: charge of tourism. She was telling me tourism hospitality was
3:53
Speaker 3: actually more of an income earner in New Zealand. Dan
3:56
Speaker 3: Derey was.
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Speaker 4: Well, that was the case.
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Speaker 5: It's clearly not at the moment, and there is a
4:03
Speaker 5: synergistic relationship between tourism and hospitality. We are seeing ongoing
4:08
Speaker 5: struggles in the hospital sect because those visitor numbers just
4:10
Speaker 5: haven't rebounded in the way that we need them to.
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Speaker 5: So the recovery of the tourism sector does give me hope,
4:15
Speaker 5: because we're still only that sort of eighty six eighty
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Speaker 5: seven percent of the capacity of tourists we had prior
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Speaker 5: to COVID, So as that number starts to inch arpe,
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Speaker 5: I think that'll provide some relief hospitality operators. But at
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Speaker 5: the moment, we're heavily predisposed to the challenges that most
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Speaker 5: households are finding, and that household income and the pressure
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Speaker 5: that's on that at the moment is meaning that that spend,
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Speaker 5: that luxury spin that people have for going out is
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Speaker 5: just isn't there.
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Speaker 3: Carolyn, You'll be feeling exactly the same for retail or
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Speaker 3: I'm not going to put words in your mouth. I mean,
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Speaker 3: how is retail right now, right in the middle of
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Speaker 3: the winter.
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Speaker 6: Yeah, it's dark, you know, it's really difficult. All kind
4:53
Speaker 6: of Wellington are particularly challenging. There are some small areas
4:57
Speaker 6: in the provinces governed by that rural factor that are
5:01
Speaker 6: doing a little bit better where the money from darereas
5:03
Speaker 6: flowing back into their local environment. So that's holding some
5:08
Speaker 6: businesses up in terms of those spaces. But largely we're
5:13
Speaker 6: just hearing that sporadic trade where you know, one day
5:18
Speaker 6: doesn't follow the other, and you know, it's just really
5:21
Speaker 6: hard to get a sale and to be successful. We're
5:24
Speaker 6: still seeing lots of businesses close and largely you know,
5:28
Speaker 6: can't negotiate leases when they come up for annule, so
5:31
Speaker 6: can't get it at a reasonable price that with rates increases,
5:35
Speaker 6: you know, the cost of payments, the cost of insurance.
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Speaker 6: People are saying, we just can't see how we can
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Speaker 6: make ends meet and survive until things turn around. So,
5:45
Speaker 6: you know, we had the thing in twenty twenty four
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Speaker 6: about you know, survive to twenty five, and now it's
5:51
Speaker 6: all about surviving in twenty five. And I don't see
5:55
Speaker 6: much light at the end of this year. It's going
5:57
Speaker 6: to be next year before we start to see any
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Speaker 6: economic change. That's going to mean that households feel that
6:02
Speaker 6: they can come into town and go out to lunch
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Speaker 6: and go into the stores and buy things.
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Speaker 3: But we kept on telling get being told that second
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Speaker 3: half of this year. Are you saying it's not second
6:12
Speaker 3: half of this year.
6:13
Speaker 6: Look, we've got one more rates cut likely probably in
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Speaker 6: this reserve bank cycle.
6:18
Speaker 3: In this month.
6:19
Speaker 6: They're going to do another probably twenty five basis point cut.
6:22
Speaker 6: They have signaled they're not looking at doing any further
6:24
Speaker 6: cuts for the rest of the year. So where we're
6:27
Speaker 6: going to get the stimulus. Consumer confidence is critical to
6:30
Speaker 6: both hospitality and retail. Consumers are feeling uncomfortable about job security.
6:36
Speaker 6: If you don't have job security, you're not going to
6:37
Speaker 6: go out and purchase things. Mortgage rates are still high.
6:40
Speaker 6: The cut that the Reserve Bank is going to do
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Speaker 6: is already bought into the priced into the mortgage rates
6:47
Speaker 6: at the moment, is what we're being told. So just
6:50
Speaker 6: finding out where is that relief for consumers. If we
6:52
Speaker 6: don't get consumer confidence, businesses won't be able to turn
6:56
Speaker 6: around and they won't survive.
6:57
Speaker 3: Through Steve Armitage, we were told over the weekend. Well,
7:00
Speaker 3: I read over the weekend that we've been told. You know,
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Speaker 3: if Dairi's doing well, New Zealand's doing well, back off,
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Speaker 3: stop moaning about the price of your butt because of
7:09
Speaker 3: dairies doing well. Who cares? We're all doing well? Is
7:13
Speaker 3: that right? As far as hospitality in New Zealand's concerned.
7:17
Speaker 5: Look, it's hard to compirm that in a general sense.
7:20
Speaker 5: I think if you look at the performance of hospitality
7:22
Speaker 5: operators in the South Island, you could certainly make that link.
7:25
Speaker 4: Clearly.
7:26
Speaker 5: You know, their economy is heavily predisposed to the agriculture sector.
7:31
Speaker 5: We're seeing strong performance on the West Coast, We're seeing
7:34
Speaker 5: strong performance in Canterbury and the lower South Island. So
7:37
Speaker 5: you'd have to say, you know, you could draw a
7:39
Speaker 5: link between the two. On that basis, it's really the
7:42
Speaker 5: major centers, Wellington and Auckland where the going is the toughest.
7:46
Speaker 5: And I'm sure we'll get to a discussion around this,
7:48
Speaker 5: but that need to invest in events to try and
7:51
Speaker 5: drive visitation is what's really missing at the moment.
7:54
Speaker 3: Can I just ask you on the christ Church you know,
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Speaker 3: because everyone in hospitality is saying they're doing really well.
7:59
Speaker 3: That is that because they are a progressive and rebuilding
8:03
Speaker 3: city as well as the farming. I mean they are.
8:05
Speaker 3: They've got your universities doing well. Everything seems to be
8:09
Speaker 3: on a high And I'll come to you Carolyn on
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Speaker 3: that too. Is that something that we could look at
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Speaker 3: and say, well, christ you just doing okay?
8:15
Speaker 2: Yeah?
8:15
Speaker 4: I think so.
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Speaker 5: Clearly they've had their challenges to overcome over the of
8:18
Speaker 5: course the last ten to fifteen years, but they're now
8:21
Speaker 5: making every post winner.
8:22
Speaker 4: The fact that you've got a council.
8:24
Speaker 5: And the council entity itself seems to be really well
8:27
Speaker 5: joined up and clear on what their vision is for
8:29
Speaker 5: the city. Every time I've gone down there in recent times,
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Speaker 5: I've been surprised with the footfall and the positivity around
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Speaker 5: the city center. Itself, and then you throw on the
8:38
Speaker 5: likes of Takaha Stadium coming online and hopefully a program
8:42
Speaker 5: of events which we'll see that really showcase the city.
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Speaker 5: There's a lot of optimism in around Cantererbre at the.
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Speaker 3: Moment, Carolyn, are you hearing the same thing in retail?
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Speaker 2: Yeah?
8:51
Speaker 6: Absolutely. Look and to Steve's point, they've gone through, you know,
8:55
Speaker 6: ten to fifteen years of really difficult times and the
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Speaker 6: city is now beautiful right and largely rebuilt, and so
9:02
Speaker 6: their pipes are all done and all of their infrastructure
9:05
Speaker 6: work has done, which we can't say the same and
9:08
Speaker 6: other major cities around the country. And they are still
9:11
Speaker 6: supported by that dairy which is flowing and through. And
9:14
Speaker 6: they did have an influx of people post COVID. Lots
9:17
Speaker 6: of people from Auckland moved down to christ Church and
9:21
Speaker 6: found opportunities there that they felt were better for them
9:24
Speaker 6: and their family after you know, going through COVID, people
9:28
Speaker 6: had a look at themselves and of determine what they
9:30
Speaker 6: wanted to do next. So certainly it's more positive and
9:33
Speaker 6: buoyant in christ Church than it is in other parts
9:35
Speaker 6: of the country. And you know, Auckland is a really
9:38
Speaker 6: critical part to the country, So dairy, we can't say
9:41
Speaker 6: that dairy is not important. But Auckland likewise is also
9:43
Speaker 6: really important because of the sheer size of the city
9:46
Speaker 6: and the volume of the GDP that the percentage, it's
9:49
Speaker 6: something like sixty percent of the GDP comes out of Auckland.
9:51
Speaker 6: So if Auckland's depressed, they've got a higher level of
9:54
Speaker 6: unemployment than the rest of the country on average, then
9:58
Speaker 6: you know we're going to struggle as a country too.
10:00
Speaker 6: And you ask individual people how they're doing, they're not
10:05
Speaker 6: going to say they're doing great.
10:06
Speaker 3: Right now, Business Panel today you have Steve Armitage and
10:09
Speaker 3: Carolyn Gray Carolyn right young, sorry Carolyn changing your name. Now,
10:14
Speaker 3: State of the Economy. I want to talk a little
10:17
Speaker 3: bit more about what you said was sir, Carolyn survived
10:19
Speaker 3: to twenty five. I honestly think we're going backwards. What
10:25
Speaker 3: is your feeling, Well.
10:26
Speaker 6: I think it's the compounding factor, right, It's that we've
10:29
Speaker 6: had a long period of time where where businesses are
10:32
Speaker 6: really struggling in New Zealand, and so if people aren't
10:37
Speaker 6: making a profit and they're making a loss, it is
10:38
Speaker 6: compounding and so it does feel like you're going backwards.
10:42
Speaker 3: The comparative numbers.
10:43
Speaker 6: Retail cyclical, so we look at year on year numbers.
10:46
Speaker 6: So if you look at July versus July twenty twenty four,
10:49
Speaker 6: the numbers are there or thereabouts, but we're off a
10:52
Speaker 6: really low base and it's been really challenging. So if
10:55
Speaker 6: businesses weren't making money last year or the year before,
10:57
Speaker 6: they're not making money this year. It does feel like
11:00
Speaker 6: it's getting compoundingly worse. And sometimes there's additional factors that
11:04
Speaker 6: come in that you had more of an impact on
11:07
Speaker 6: business or just more on morale as well, around how
11:11
Speaker 6: you can keep being buoyant in a tough environment.
11:14
Speaker 3: Well, you've got to love what you do, Steve, don't you.
11:16
Speaker 5: Yeah, Well, I think going backwards is how most households
11:19
Speaker 5: feel that the narrative that's out there and the government
11:22
Speaker 5: has been pushing it, is that with the interest rate cuts,
11:25
Speaker 5: there's some additional spend coming into each household, a little
11:28
Speaker 5: bit more discretionary expenditure, but of course the cost of
11:30
Speaker 5: everything is going up at the same time at an
11:32
Speaker 5: increased rate, So although you know you might be getting
11:35
Speaker 5: a few more dollars in your pocket, that's going out again,
11:37
Speaker 5: and increased insurance premiums and other things. So most households
11:41
Speaker 5: I don't think buy into that narrative that the government
11:44
Speaker 5: has been running around some additional headroom and your expenditure
11:48
Speaker 5: because it's just simply not the truth.
11:49
Speaker 3: But I mean in your industry too, hospitality, if they
11:52
Speaker 3: look back on last year, they're going to probably I mean,
11:54
Speaker 3: that's no point looking at those figures, like Carolyn said,
11:57
Speaker 3: because they were tough. I mean, if you put your
11:59
Speaker 3: figures from July twenty five to pre COVID July, what
12:04
Speaker 3: would many of them say?
12:06
Speaker 5: Oh, yeah, there's no comparisonolutely right. I mean I have
12:10
Speaker 5: some hope, you know, And I think it's really important
12:13
Speaker 5: that we don't just perpetuate this negativity, right because part
12:17
Speaker 5: of why I think we have a struggle getting young
12:19
Speaker 5: people to come into the sector is because if you
12:21
Speaker 5: pick up the paper day to day, all your reading
12:23
Speaker 5: is negative commentary around the current state of the sector.
12:27
Speaker 5: So if I think forward, if I'm looking at summer,
12:30
Speaker 5: you know, we know, as Carolyn's just alluded to, with
12:33
Speaker 5: retail hospitality is very cyclical. Were expecting to spend over
12:37
Speaker 5: that period from a domestic visitation point of view, and
12:40
Speaker 5: with increasing connectivity to some of those major international ports,
12:43
Speaker 5: through through more flights coming in a reasonable cruise season,
12:47
Speaker 5: and other things that gives me some comfort that summer
12:50
Speaker 5: should be reasonably stable for most hospitality businesses.
12:52
Speaker 3: Can I both ask you both very quickly? I mean,
12:55
Speaker 3: looking forward? What is the industry? What are your people?
12:58
Speaker 3: What are your foot soldiers that own small retailers or
13:01
Speaker 3: you know, what are your foot soldiers telling you? Karen?
13:05
Speaker 6: Look, The challenge I think is Steve outlined is some
13:08
Speaker 6: of the ongoing expenditure increases they've seen on things that
13:11
Speaker 6: they can't control. When you look at insurances, leases, rates, wages, payments,
13:17
Speaker 6: all of those things, that's been really challenging. Businesses are
13:21
Speaker 6: still inspired by the work they do, and they've still
13:24
Speaker 6: you know, they have bought stock for summer and paid
13:27
Speaker 6: for it already. You know, spring stock is arriving in
13:29
Speaker 6: store already. Summer stock won't be far behind. So they
13:33
Speaker 6: have to make it work. Businesses are really inspired, and
13:36
Speaker 6: how do they make it work? Because they know they've
13:38
Speaker 6: paid for the stock and it's coming in, so they've
13:40
Speaker 6: got to find a way to stay open, hopefully get
13:43
Speaker 6: through summer, and then the economy might have turned a
13:45
Speaker 6: little bit more by then we've got a launching pad
13:47
Speaker 6: into next year. At some point we are going to
13:49
Speaker 6: see that positively turn around. And how prepared we're going
13:53
Speaker 6: to be for that, and what initiatives we're going to
13:55
Speaker 6: have in place to ensure that we can continue to
13:58
Speaker 6: thrive going forward will be really important.
14:00
Speaker 3: Steve, your industry are you seeing because we're not seeing
14:03
Speaker 3: it in Wellington. We're seeing people buying old cafes and putting
14:07
Speaker 3: a coat of paint and few tiles and changing the name.
14:10
Speaker 3: But it's been a while since we've seen a million
14:12
Speaker 3: dollar bill. I mean, and that you well know was
14:15
Speaker 3: happening every week all over New Zealand.
14:18
Speaker 5: Yes it was, yeah, and there are there are still
14:21
Speaker 5: instances of that happening in other parts of the country.
14:23
Speaker 5: It's not the case here, yes, but there are certainly
14:26
Speaker 5: some confidence in other areas and investment of reasonably significant
14:31
Speaker 5: nature taking place. But you just come back to the
14:33
Speaker 5: point around where things are sitting at the moment. I
14:36
Speaker 5: think the recent announcement around the merchant fees and surcharge
14:40
Speaker 5: right now that has a huge impact on the bottom
14:43
Speaker 5: line of a lot of our members. Speaking to one
14:45
Speaker 5: last week who saying you know, the cost and position
14:48
Speaker 5: of having to absorb that into his business is around
14:51
Speaker 5: ninety thousand dollars a year, nineteen or nine zero. Right, Wow,
14:55
Speaker 5: the annualized profit for that business is one hundred and
14:57
Speaker 5: thirty five if you're you know, that's a huge whack
15:01
Speaker 5: out of the profitability of that business just through one decision,
15:04
Speaker 5: which seemed to me to be very rushed.
15:06
Speaker 4: There was a very little.
15:06
Speaker 5: Consultation about it, venient line publicly to so this is
15:10
Speaker 5: going to help your pocket, but the reality of that
15:13
Speaker 5: is really tough for business.
15:15
Speaker 3: And can I just ask you what the reality of
15:18
Speaker 3: that transpires to?
15:20
Speaker 4: What's going It's going to mean that prices go up?
15:23
Speaker 3: Yeah, they can't absorb that, No they can't. How can
15:26
Speaker 3: any business absorb? And it's retail as well.
15:28
Speaker 6: Absolutely the same, you know for a small retailer. And
15:31
Speaker 6: it is really a play for small businesses because the
15:33
Speaker 6: bigger guys have been able to negotiate better rates. We
15:36
Speaker 6: know that forty percent of transactions that go through through
15:40
Speaker 6: the switch are if posts and so they are free
15:43
Speaker 6: of charge. But then that means that sixty percent of
15:45
Speaker 6: the transactions that go through are not free and so
15:48
Speaker 6: you know, the current legislations enables retailer or a hospitality
15:52
Speaker 6: business to recoup that through a surcharge, and just removing
15:56
Speaker 6: that point blank and saying that businesses have to absorb that.
16:00
Speaker 6: It's not thinking through some of the repercussions, and there's
16:03
Speaker 6: some unintended consequences in that. We're going to see an
16:06
Speaker 6: increase of contactless payment occur across the network, so more
16:10
Speaker 6: funds and fees will go to banks and credit card companies,
16:14
Speaker 6: and that will mean that less transactions go through the
16:18
Speaker 6: FPOs switch, So a higher percentage of transactions will incur
16:22
Speaker 6: a fee, so that that business that's incurring a ninety
16:26
Speaker 6: ninety thousand dollars fee now will probably rise by between
16:30
Speaker 6: forty and sixty percent, So they're going to go up
16:32
Speaker 6: to one hundred and thirty thousand dollars or more. And
16:35
Speaker 6: what's going to happen is that they're going to be
16:36
Speaker 6: in a break even space. So the only way that
16:39
Speaker 6: businesses can small business especially can survive through that is
16:42
Speaker 6: to change price, because that's the only lever they've got.
16:44
Speaker 6: So it becomes an inflationary measure. And you know, we're
16:48
Speaker 6: going to be lobbying really hard through the consultation process
16:52
Speaker 6: and select Committee to really make sure that government understands
16:56
Speaker 6: the impact on small business and New Zealand is made
16:58
Speaker 6: of smeeths. We've had a whole range of different people
17:03
Speaker 6: outside of retail contact us, you know, from panel beaters
17:07
Speaker 6: and Canucks and really small businesses that use payments as well,
17:12
Speaker 6: but they're not viewed necessarily in hospital or retail, but
17:14
Speaker 6: they are a merchant and so they understand the cost
17:17
Speaker 6: that's happening and how it impacts their business.
17:20
Speaker 3: So right across in the Business panel for our every
17:23
Speaker 3: second Monday, and we have Hospitality in New Zealand CEO
17:26
Speaker 3: Steve Armitage and Retail New Zealand CEO Carolyn Young. Let's
17:31
Speaker 3: talk about foot traffic. I'm going to come to you
17:33
Speaker 3: Steve first one n CBD foot traffic is nowhere near
17:37
Speaker 3: pre COVID levels. How much do you reckon that is
17:40
Speaker 3: directly hurting hospitality in retail? Now, if I want to
17:44
Speaker 3: go out and buy a shirt, I'm going to drive
17:46
Speaker 3: into town and I know where I want to buy it,
17:48
Speaker 3: so I'm going to do it. If I want to
17:49
Speaker 3: go out for a meal or a drink, I know
17:51
Speaker 3: where I want to go. Is am I making it
17:54
Speaker 3: too simplistic?
17:55
Speaker 4: No, you're not.
17:56
Speaker 5: No, but foot traffic is absolutely hurting our sector. You
18:00
Speaker 5: can see it day to day just walking here. You
18:02
Speaker 5: know that there just aren't people around to sustain the
18:04
Speaker 5: businesses that their doors open at the moment. So until
18:07
Speaker 5: we find a way to incentivize people to come back
18:10
Speaker 5: in on a regular basis, those businesses are going to
18:13
Speaker 5: continue to find it tough. Now, Wellington, New Zealand and
18:16
Speaker 5: other entities like it up and down the country, part
18:19
Speaker 5: of their remit is to incentivize visitors to come into
18:22
Speaker 5: the region. The city center is a key part of that.
18:26
Speaker 5: I have some sympathy for the likes of Wellington en
18:28
Speaker 5: Z because due to cost pressures, councils have had to
18:32
Speaker 5: put investment into other areas. Literally in Wellington the pipes
18:36
Speaker 5: underneath our feet. It's meant that there's less funding going
18:39
Speaker 5: towards the likes of a Wellington n Z to try
18:42
Speaker 5: incentivize visitors to come into market. So that lack of events,
18:46
Speaker 5: those lack of activations that you might have been accustomed
18:49
Speaker 5: to in past times are certainly hurting and week to
18:52
Speaker 5: week are meaning that we're just not getting the number
18:55
Speaker 5: of people into the city that we'd like to during
18:56
Speaker 5: the day.
18:57
Speaker 3: Carolyn, is there any more than we can do to
18:59
Speaker 3: get people in? Look, it is.
19:02
Speaker 6: Really difficult right unless people are coming in. We know
19:04
Speaker 6: that people's shopping head of its and retail have changed,
19:07
Speaker 6: so their first border call is generally looking online and
19:10
Speaker 6: doing research online then coming into store. But if you
19:14
Speaker 6: have more people working in the city, naturally they're going
19:17
Speaker 6: to go down Lempton Key, They'll be down Wallow Street,
19:19
Speaker 6: they'll be along the terrace, they'll get a coffee, they'll
19:21
Speaker 6: buy lunch, they'll see something in store and they'll come
19:24
Speaker 6: back and they'll buy it. So if you're not here
19:28
Speaker 6: and you're not flowing through, then you're not going to
19:30
Speaker 6: have those purchases. So I do think it's important that
19:33
Speaker 6: people get you know, that we get people back working
19:36
Speaker 6: in the city, and then it's about changing habits. People's
19:39
Speaker 6: habits changed after COVID and they haven't come back out
19:41
Speaker 6: as much as they have previously. So it is you
19:44
Speaker 6: know what doll we do? You know, what are the
19:46
Speaker 6: events that we can bring on. We know that Wellington Visa,
19:48
Speaker 6: Wellington on a Plate is on at the moment. It's
19:50
Speaker 6: a great event. It's you know, one of the largest
19:53
Speaker 6: hospitality events and around the Oceania region. It's a really
19:58
Speaker 6: great thing. But what's next, what's going to bring people
20:01
Speaker 6: out next month and the month after and the month
20:03
Speaker 6: after that. Because those things we know, WOWE is really
20:05
Speaker 6: great for retail and it's probably good for hospital as well.
20:08
Speaker 6: So really having that catalyst and that flow of events
20:12
Speaker 6: across the city and needs to be replicated across the
20:16
Speaker 6: country because events are really critical to bringing people in,
20:19
Speaker 6: whether the international tourists or domestic terrorists.
20:22
Speaker 5: We've advocated alongside other associations for some time now for
20:26
Speaker 5: a form of accommodation levy to be introduced so when
20:29
Speaker 5: international domestic visitors are moving around, there's a small surcharge
20:32
Speaker 5: on the bill which would raise a significant sum of
20:35
Speaker 5: money that would be reinvested in the region that it's
20:37
Speaker 5: generated in and it could go towards destination management, destination marketing.
20:42
Speaker 5: So provides a war chest if you like to be
20:45
Speaker 5: able to invest in major events which the city is lacking.
20:49
Speaker 3: Right tell me about you both would have discussions with
20:53
Speaker 3: both the councils and government. I mean, Steve, have you
20:56
Speaker 3: mentioned have you had the discussion with government about trying
20:59
Speaker 3: to get the government workers back working in the offices.
21:02
Speaker 4: Yep.
21:02
Speaker 3: Yeah.
21:02
Speaker 5: And when the announcement was made or some eighteen months ago,
21:06
Speaker 5: now twelve months ago, specific to Wellington that public servants
21:11
Speaker 5: were going to be spending more time in the city center,
21:14
Speaker 5: they were being instructed to come back into work. Know,
21:16
Speaker 5: we welcomed that decision. We thought it was an important
21:20
Speaker 5: statement by the government. It hasn't resulted in a significant
21:23
Speaker 5: uplift and spent. I don't know that the behavior is
21:26
Speaker 5: actually reflected in the day to day realities of those
21:29
Speaker 5: of the ministries and departments around Wellington.
21:31
Speaker 3: Carolyn for retail, is has it helped or is it hindering?
21:34
Speaker 6: Well, we haven't seen it up tick yet. And I think,
21:37
Speaker 6: you know, the government is one part of that. And
21:39
Speaker 6: then you know, you think of all the commercial businesses,
21:41
Speaker 6: the law firms, their accounting firms that you know, every
21:44
Speaker 6: other business, architect firms, you know everyone. We need all
21:47
Speaker 6: of them to be coming into the city and to
21:49
Speaker 6: be getting back to those habits that we had pre COVID.
21:52
Speaker 3: So you know, is it a reality? Sorry to interrupt there,
21:55
Speaker 3: but is it now just becoming I can hear our
21:57
Speaker 3: listeners say is that just now a reality and that's
22:00
Speaker 3: not going to be fixed.
22:02
Speaker 6: Not necessarily. If businesses see value in having their workers
22:06
Speaker 6: in their in sit to being able to engage with
22:10
Speaker 6: each other and work more efficiently and effectively, they'll encourage
22:13
Speaker 6: them to come in. So I think it, you know,
22:17
Speaker 6: I think it depends. It doesn't have to be that
22:18
Speaker 6: everybody works from home. I think, you know, you can
22:21
Speaker 6: be more efficient and effective if you're working in person.
22:24
Speaker 5: Yeah, I think culture suffers when you don't have your
22:27
Speaker 5: people together on a regular basis. You can't build culture
22:29
Speaker 5: through a screen, in my view, you have to have
22:32
Speaker 5: people physically co located in getting to know one another
22:35
Speaker 5: and understand that they know what purpose they're working towards.
22:39
Speaker 5: So I think we've suffered as a result, and it's
22:42
Speaker 5: one of the struggles that we have around our sector.
22:45
Speaker 5: Holding on to talent is a real bugbear, and I
22:49
Speaker 5: think you're finding young people in particular don't have that
22:53
Speaker 5: sense of attachment because they're not used to in general sense,
22:56
Speaker 5: they're not used to working as part of a team.
22:58
Speaker 5: They're doing it remotely, and so as a result, they
23:00
Speaker 5: don't see themselves investing in the long term, and a
23:03
Speaker 5: lot of businesses that could be benefiting from retaining that talent.
23:05
Speaker 3: And could it change people's habits. I mean all three
23:08
Speaker 3: of us grew up by going on a Friday night
23:11
Speaker 3: to have a bear with your workmates and meet new
23:13
Speaker 3: people and get out there and be part of life.
23:16
Speaker 3: I mean we've all got probably lifetime friends that we
23:18
Speaker 3: met at a pub that had nothing to do with
23:21
Speaker 3: work or sport. Is that hurting us?
23:23
Speaker 4: The one in my mind view? Yeah, Like I say, I
23:26
Speaker 4: think culture is critically important.
23:28
Speaker 3: Now.
23:28
Speaker 5: It doesn't mean you always have to be having a
23:29
Speaker 5: drink in your hand to build culture, but the opportunity
23:32
Speaker 5: to socialize and get to know one another, understand what
23:35
Speaker 5: makes each other tick. How you can get the best
23:37
Speaker 5: out of somebody just through a conversation I think is
23:40
Speaker 5: lost when you're doing it arbitrarily through a screen and
23:43
Speaker 5: you've got to fix time for a meeting.
23:44
Speaker 6: And look, things happen organically right in an organization. So
23:48
Speaker 6: those organic conversations, and you know, it's the water cooler conversation,
23:52
Speaker 6: right that you wouldn't have found out something like oh wow,
23:55
Speaker 6: I didn't know that you did that. Oh we must
23:56
Speaker 6: connect up because I'm doing a piece of work, and
23:58
Speaker 6: I think it aligns with what you're doing. I better
24:00
Speaker 6: make sure that I've covered off what you need to
24:02
Speaker 6: have at your end as well as what's happening with
24:04
Speaker 6: other people. So you know, being in the office provides
24:08
Speaker 6: those opportunities and that just gives sustainability to cities and
24:12
Speaker 6: we can all thrive rather than the struggles that everybody
24:17
Speaker 6: seems to be having at the moment.
24:19
Speaker 3: Business Panel with Steve Armitage and Carolyn Gray. Can I
24:22
Speaker 3: just ask you Steve, firstly, you probably saw the front
24:25
Speaker 3: page article in the Post on the weekend about how
24:28
Speaker 3: difficult Wellington City councils making it for liquor licensing in
24:32
Speaker 3: this city. Can I give you an example. We have
24:35
Speaker 3: a little room at a restaurant, a little little area
24:38
Speaker 3: at the back of our restaurant's a bar, private bar,
24:40
Speaker 3: and we wanted to change the side door of it
24:42
Speaker 3: to allow people to go in the doors. They have
24:44
Speaker 3: to come through three and a half thousand dollars to
24:47
Speaker 3: do an amendment to a license to change an entrance
24:50
Speaker 3: to a doorway.
24:52
Speaker 4: Yeah.
24:52
Speaker 5: Look, this issue routinely comes up, but there's no question
24:55
Speaker 5: Wellington has been the loudest in terms of the cost
24:59
Speaker 5: impact for business and a sense that there is a
25:02
Speaker 5: slightly different view being taken by those involved parties here
25:06
Speaker 5: the relative to other parts of the country. So we've
25:09
Speaker 5: provided our Minister regular examples of businesses that operate in
25:13
Speaker 5: Auckland and Wellington other parts of the country. They're putting
25:16
Speaker 5: in the same information. They're getting their license in Auckland,
25:21
Speaker 5: but there's hurdles that have been put in front of
25:22
Speaker 5: them in Wellington. And then you've got the cost of
25:24
Speaker 5: friendship too. You know, it's more expensive annually to get
25:27
Speaker 5: a license here in Wellington that it is in Auckland.
25:29
Speaker 3: So I'm not sure that you know. But if you're
25:30
Speaker 3: got to go for a four o'clock license in Willington now,
25:33
Speaker 3: they just put the price up to ten thousand dollars.
25:35
Speaker 5: So we've asked the Minister to look into this. We're
25:38
Speaker 5: hoping that we're going to be put in front of
25:40
Speaker 5: the Ministry of Regulations for an opportunity for this to
25:43
Speaker 5: be looked at in detail.
25:44
Speaker 4: That what we would like to see is just some consistency.
25:47
Speaker 4: It shouldn't have regional variation.
25:49
Speaker 3: Are you hearing the same caarent Are you hearing that
25:52
Speaker 3: your people in retail are having more difficulties with Wellington
25:54
Speaker 3: City Council than anywhere else in the country.
25:56
Speaker 6: And not specifically. No, we know that the RMA is
25:59
Speaker 6: a really big challenge and it's a really big barrier
26:02
Speaker 6: to opening news stores and it just puts lots of hurdles,
26:07
Speaker 6: cost time, and you know, people consider whether or not
26:11
Speaker 6: it's valuable. So RMA is a big barrier to entering
26:16
Speaker 6: the marketplace that we haven't heard that there's a differential
26:19
Speaker 6: in terms of Wellington City Council.
26:20
Speaker 3: Okay, let's talk unemployment. The unimble employment rate came out
26:24
Speaker 3: last week. It's now five point two percent, with many people,
26:27
Speaker 3: especially young people, especially young people out of work. Steve,
26:30
Speaker 3: are you seeing this in hospitality? What's the vibe like
26:33
Speaker 3: about getting young people to work?
26:36
Speaker 5: Well, there are certainly jobs available in hospitality. If I
26:39
Speaker 5: go up and down the country, I look, there are
26:41
Speaker 5: vacancies there. What I think is part of the problem
26:44
Speaker 5: is that there is an expectation amongst young people that
26:46
Speaker 5: they should be working at a particular level and earning
26:48
Speaker 5: a particular amount. There's not so much of a responsibility
26:52
Speaker 5: on them to prove their stripes, to get to know
26:55
Speaker 5: a business and work your way up so I think
26:57
Speaker 5: I think there's this mismatch between people's expectations and the
27:01
Speaker 5: reality of starting and forging a career. That's something that
27:05
Speaker 5: we need to overcome. Is also a challenge for us
27:09
Speaker 5: in hospital you know, we've talked earlier about the fact
27:12
Speaker 5: that if you're opening up the paper and you're reading
27:13
Speaker 5: negative headlines all the time, it's a hard ass to
27:16
Speaker 5: try to sell that when businesses are doing it particularly
27:19
Speaker 5: tough and you don't know if the business is going
27:21
Speaker 5: to be there in the long run. But also parents,
27:24
Speaker 5: you know, I think there's some responsibility there. Hospitality has looked.
27:26
Speaker 4: At as a as a.
27:28
Speaker 5: Brief stop on the way towards doing something different. Now,
27:31
Speaker 5: I think hospitality can be a hugely rewarding business career
27:35
Speaker 5: for people. It can take you all around the world.
27:37
Speaker 4: It could take you.
27:37
Speaker 5: Into business management, ownership and so on. And we don't
27:41
Speaker 5: see it celebrated in the same way that you do
27:43
Speaker 5: in the Northern Hemisphere, where people work in hospitality and
27:45
Speaker 5: are still waiting startus well into their seventies. But we
27:49
Speaker 5: just don't treat it the same way.
27:50
Speaker 3: Yeah, same with retail, isn't it, Karen.
27:52
Speaker 6: Yeah, Look, perception of working in retail is the same.
27:54
Speaker 6: It's not great. And one of the things that we
27:56
Speaker 6: know that working in retail can do. Look, everyone has
27:59
Speaker 6: to start at the beginning, and the beginning is often
28:01
Speaker 6: the shop floor, so most people don't start higher up,
28:05
Speaker 6: especially when you're young. Right as you say, you've got
28:07
Speaker 6: to earn your stripes. But the thing about working in retail,
28:10
Speaker 6: and I'm sure it's similar in hospitality, is that if
28:12
Speaker 6: you're enthusiastic goods, you're a quick learner. You know, you
28:16
Speaker 6: turn up, you do all of those sorts of things.
28:18
Speaker 6: Acceleration through to leadership happens really quickly in retail and
28:23
Speaker 6: there's really a lot of opportunities. And then secondly, in retail,
28:26
Speaker 6: you know some of the bigger operators, you can do
28:29
Speaker 6: almost anything. You know, you could be a buyer, you
28:32
Speaker 6: could be buying things internationally. You could be doing marketing,
28:36
Speaker 6: you could be doing health and safety, you could be
28:38
Speaker 6: doing technology. There's a whole range of things, and it's
28:40
Speaker 6: not a linear start at this point and finish at
28:43
Speaker 6: that point. You can go, you know, you can transverse
28:46
Speaker 6: a whole range of different things in retail. And we've
28:48
Speaker 6: got a really interesting program that we're doing seven jobs
28:51
Speaker 6: and seven days in TikTok so for young ones, have
28:53
Speaker 6: a look at it. It's a really great way in
28:57
Speaker 6: which you can see what retail could look like if
28:58
Speaker 6: you're young.
28:59
Speaker 3: And you know, the other thing for both your industries
29:01
Speaker 3: or our industries is social media. I mean, you know,
29:05
Speaker 3: so the growth of social media. I know hospitality has
29:08
Speaker 3: been quite slow to pick up on it, but it's
29:11
Speaker 3: massive now. Same with retail. I mean for young people,
29:14
Speaker 3: they're so damn good at it.
29:16
Speaker 6: Night yeah, I mean there's lots of skills that young
29:18
Speaker 6: people are really amazing at, but just widening their thought
29:22
Speaker 6: around what a job and a career in retail could
29:24
Speaker 6: look like as the key thing. And making sure that
29:27
Speaker 6: people don't think that your job has to start and
29:30
Speaker 6: stop on the shop floor. There's so many more things
29:32
Speaker 6: that you can do.
29:33
Speaker 3: Okay. As we wrap the business panel up, we ask
29:36
Speaker 3: our guests what they would do to I don't know
29:39
Speaker 3: if Steve, if you had to meet someone and go
29:43
Speaker 3: out for lunch or dinner or do something in Wellington,
29:45
Speaker 3: I mean you are an ex Wellingtonian, but your CEO
29:48
Speaker 3: of hospitality in New Zealand, you want to really impress someone.
29:50
Speaker 3: What are you going to do.
29:52
Speaker 5: I'm going to avoid that because I can't afford to
29:54
Speaker 5: pick a memo over another. I am an outdoors kind
29:59
Speaker 5: of guy. I really enjoy Wellington on a good day,
30:02
Speaker 5: don't we all. But I quite like going around the
30:04
Speaker 5: fort battlements, up around merym upinentually there watching bay. I'd
30:10
Speaker 5: love to take my daughter there. We haven't had a
30:11
Speaker 5: chance to do that yet. It's certainly a high my
30:13
Speaker 5: agenda to take around there.
30:15
Speaker 3: Do you still enjoy Wellington? When you come to Wellington?
30:18
Speaker 3: You come here very very often. It's not like you're
30:20
Speaker 3: a stranger. Do you still enjoy it?
30:23
Speaker 5: Wellington is different to the rest of the country. I
30:26
Speaker 5: particularly enjoy Wellington during the summer months. I love walking
30:30
Speaker 5: around the waterfront. I like feeling connected to decision making
30:34
Speaker 5: down here. I would like to see more of that
30:36
Speaker 5: decision making rather than obfuscation. But no, I do enjoy Wellington.
30:40
Speaker 5: I enjoyed living here for a period of time, but
30:42
Speaker 5: Auckland was always calling me back home for family reasons.
30:44
Speaker 3: Okay, Carolyn Young, you looked as much as shock as
30:48
Speaker 3: I did over that. It wasn't a great shining example
30:50
Speaker 3: of great Walingtonia. But you are a Waliingtonia. What are
30:53
Speaker 3: you going to do with that special person you pick
30:55
Speaker 3: up at at the airport tomorrow.
30:58
Speaker 6: So what we do is we'd swing by Cafa Ice
31:01
Speaker 6: pick up a coffee. They are really great. They give
31:03
Speaker 6: you a discount if you've got a takeaway cup, so
31:06
Speaker 6: you at your own cup. So we'd go in there,
31:08
Speaker 6: get a coffee. We'd go up, we'd high cup Mount
31:12
Speaker 6: Kalkau to you know, actually see the whole traverse everything.
31:15
Speaker 6: We love that walk down. Then when we come down,
31:17
Speaker 6: we would stopping at Dunche's Delly for lunch, so Craig
31:21
Speaker 6: would look after us, have great food there, and then
31:23
Speaker 6: we'd go into the Candala CBD. You go and see
31:26
Speaker 6: Sheila at Hamilton, Money at Murray. You'd go into TP
31:29
Speaker 6: and you go into Gubs Shoes and then probably pick
31:32
Speaker 6: up some flowers from the local candalad area on the
31:34
Speaker 6: way out.
31:34
Speaker 3: You're a Candala girl. Craig Dunshare, that's a name that
31:38
Speaker 3: from the past. That's the old neo cafe guy. Isn't
31:41
Speaker 3: it used to play lock for Wellington Rugby? You look
31:43
Speaker 3: more information? I should be a talkback coach.
31:45
Speaker 6: Didn't Hospitality ask him for the recipe for that Karen
31:50
Speaker 6: was Slice.
31:50
Speaker 3: Okay, I've never been up there, but I will definitely
31:52
Speaker 3: now that I know that he runs. I never even
31:54
Speaker 3: heard of it before. Hospitality in New Zealand CEO, Steve
31:56
Speaker 3: Hamat to take you and thank you for everything you've
31:59
Speaker 3: done for Hospitality New Zealand and your role there. I
32:01
Speaker 3: know you're moving on.
32:02
Speaker 4: Thank you.
32:03
Speaker 3: You spoke too soon about my voice, Carolyn, so I
32:06
Speaker 3: appreciate and good luck on your new job at Sale
32:08
Speaker 3: in New Zealand. Thank you, Carol Luk. Always good to
32:11
Speaker 3: catch up Boston. Do that well this year Today Carol
32:14
Speaker 3: Young's and x CEO of The Pulse.
32:16
Speaker 6: They made the playoffs. Still a good start.
32:18
Speaker 3: Right, didn't quite go the Pulse didn't quite want to
32:21
Speaker 3: go the same. Thank you both so much.
32:23
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32:25
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