Jose Pallippat operates a franchise of Little India restaurant in Christchurch. Being comfortable in the business for more than ten years, Pallippat is now getting increasingly tired as hospitality businesses across the region struggle with challenges from multiple fronts.
“We were all right till Covid hit in 2020 but being in a location which depends heavily on the tourist business, we were hit hard when tourist inflow dried up. We lost a major chunk of our revenue when the borders closed.
“Since then, we have been bombarded with various serious concerns one after another, adding to our hardships. Border closure has also impacted the inflow of chefs. Being an ethnic restaurant, we used to get chefs from India. After the border closure we could not get any new chefs and even our existing chefs got stuck in India unable to come back and had their visas expired. This resulted in severe staff shortages in the ethnic hospitality market, leading to situations like staff poaching, shortened trading hours and even closure of businesses.”
Wednesday’s announcement lifting indoor gathering limits and other changes in the Covid restrictions is a step welcomed by the business owners but there are struggles on multiple levels and it will not be anytime soon, before things get better.
Another similar business owner, who did not want to be named, told us that while wage subsidies have helped, businesses still struggled with a shortage of raw material and increased cost. Due to Covid restrictions, the international and domestic movement of goods has become not only slow but also expensive. He gave the example of Charcoal which has gone up from $19 to $30 for a 10kg box. The price of 20 litre Canola oil has gone up from $35 to $62.
Ishan is the South Island Manager at a leading food service distribution company. The company directly imports thousands of products and supplies to most of the major restaurants along with locally produced products. As part of his job, Ishan routinely interacts with various Indian and other ethnic restaurant owners.
He has seen them struggle and points out that supply chain issues are a major pain point for restaurants among various other factors. He also says the government needs to take some immediate steps to arrest inflation, threatening to destroy the owner’s margins. He says it might take another couple of years before the sector can get to the pre-covid levels of business.
‘Dining In’, has been hurt the most, due to Omicron fear with families not coming to the restaurants. The major source of revenue left is Takeaways and Deliveries, which is not sufficient to keep the business going.
Clive Antony is a founding partner of Antony & Mates- a Christchurch based media agency. Clive told Indian Weekender that, “While we don’t work directly within hospitality or affiliated businesses, we have many clients in that space. We have observed that the heart of the Christchurch CBD is empty during lunchtimes which is very disheartening. The businesses are not spending on marketing as there is no confidence in the community. Hopefully, things change soon. The recent changes increasing gathering limits to 200 and other measures should help encourage the sector, but tourists’ and international students’ inflows are also significant for these businesses to thrive.”
While the government has financial support on offer, none of the business owners we spoke to were positive that the amount will be enough to bridge the gap with high fixed costs like rent and electricity.
Among other problems plaguing the sector is staff shortage and rising cost of labour. The minimum wages will go up to $21.20 on 1st April 2022 and it seems that Business owners will have no option but to hike their prices.
