New report shows growth in some regions despite tough first quarter for hospitality industry
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123RF
The hospitality industry has had a tough start to the year, with flat national sales growth, rising operating
costs
and workforce shortages.
The Restaurant Association's Hospitality Industry Report for the first quarter ended March indicates total sales rose just one percent to $4 billion over the year earlier.
Sales were also down 5.9 percent on the fourth quarter of 2024, which included the busy festive and function season.
"The summer trading period was softer than expected for many operators, and long-standing challenges like high fixed costs, wage pressure and staff shortages continue to weigh heavily," Restaurant Association chief executive Marisa Bidois said.
"While inflation may be easing on paper, our members are still feeling significant cost strain on the ground."
However, several regions posted standout results including Nelson with a near 17 percent year-on-year increase in revenue, followed by Queenstown-Lakes at 13 percent.
On the flip side, Auckland saw marginal growth of just 0.4 percent and other regions, including Marlborough and Hawke's Bay, reported declines.
"This data reinforces the fact that a one-size-fits-all recovery approach won't work," Bidois said.
"Tailored, regionally responsive strategies are vital."
She said staffing also remained a challenge, particularly for senior roles, with 72 percent of businesses reporting difficulty in filling those positions.
While entry-level roles were becoming easier to fill, she said workforce shortages and visa processing delays continued to constrain growth for many.
In response, she said the Restaurant Association was progressing at pace with the 65-point sector action plan, which had a particular focus on workforce development, business sustainability and long-term competitiveness.
"Hospitality businesses aren't standing still - they're adapting, innovating, and working hard to stay viable," she said.
"To unlock the next phase of growth, we'll continue working with government and our partners to progress our action plan and ensure the value our sector brings - culturally, socially, and economically - is fully recognised."
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