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“All this points to the hospitality sector being in good shape, but despite this strong backdrop we know businesses are facing some challenges,” Mr Hiddleston said.
ANZ benchmarking of 43 businesses shows revenue growth is only marginally up and the median results for wages and salaries as a proportion of revenue was around 35%.
With the Government indicating the minimum wage will increase to $20 per hour by April 2021, a 27% increase from $15.75 per hour in March this year, she said businesses would need to be proactive around managing costs.
“While forecasting wage growth is difficult, and a 27% increase would apply only to employees on the minimum rate, any increase would have an impact on the bottom line.
“Finding a point of difference, structuring service offerings and looking at different ways to manage supply chains are ways businesses can deal with this cost increase.
“If businesses are relying on one input being cheap – like wages – the reality is that business will be vulnerable.”
Key findings of the report are:
- International spending peaks at around 24% of total credit card expenditure in the summer months, dropping to around 9% in winter;
- domestic spending averaged around 75% - 85% of total spending in the sector over the two year period;
- the number of food and beverage providers grew by 7.4%; and
- New Zealand’s main destinations recorded growth in food and beverage providers, with Christchurch leading the way with 11.6% growth, likely due to progress of the earthquake rebuild, followed by Auckland with 10%, Waikato 8.6%, Otago 4.6% and Wellington 3.3%.
For media enquires or a copy of the full report contact:
Briar McCormack 021 2801173