New Statistics Paint a Bleak Picture for Australian Hospitality

Night Time Industries Association (NTIA) continues to advocate for the survival of hospitality

With the Government’s JobKeeper scheme officially passed in Parliament, the Night Times Industries Association (NTIA) recognises there are still gaps in the legislation that will heavily impact the survival of hospitality – which is supported by recent report findings conducted by the Australian Bureau of Statistics (ABS) and the NTIA’s own survey of hospitality businesses. 

Under this new legislation:

  • Casuals who have worked for less than 12 months are not covered 
  • Foreign workers are not covered
  • There is no provision for cashflow. Businesses are just being told “talk to your bank”
  • There is still no mandated rental relief for residential tenants

Released on April 7, the report by the ABS demonstrates the devastating effect the COVID-19 shutdown is having on Australian businesses. In particular, the report outlines severe impacts on the hospitality industry which represents about 8% of the total Australian workforce; one which is heavily reliant on casual workers who are not covered by this new legislation if they have worked under 12 months, and foreign workers altogether. 

Within the hospitality sector, a staggering 70% of businesses have had to reduce staff hours, 43% have had to sack workers or place them on unpaid leave, and one in ten have been forced to stop trading altogether. The figures come from an ABS study conducted late last month where 3,000 Australian businesses were surveyed. 

While the ABS numbers paint a bleak picture, the NTIA’s campaign platform Keep Our Venues Alive (KOVA)’s own survey data is even more dire. Data collected by KOVA directly from 51 hospitality businesses in Sydney, Melbourne and Hobart shows a staggering 96% of businesses have stood down more than half of their staff since March 1st of this year, and two thirds have stopped trading altogether since the March 23rd shutdown. KOVA’s survey respondents skew towards smaller, independent businesses, indicating that the severity of the situation tends to be worse for the small end of town.

The numbers illustrate the devastating effect the COVID-19 shutdown is having on the Australian hospitality industry and reflects the anecdotal evidence collected by KOVA from business owners, staff and suppliers. 

Karl Schlothauer, owner of Sydney’s House of Pocket, is worried for the future of his small business after years of hard yards. “I was one of the first small bars to open in Sydney, growing the business to seven venues,” he says. “Then I lost one during the lock out period, and had to put another into administration, leaving me with ongoing debts. Now we’re forced to shut and cash reserves are diminishing. It is very possible that I will lose everything after ten years of work, paying over 15 million dollars into the work force and enormous amount of payroll tax. It just feels like a one-way street, all take and no give.” 

Matt Linklatler, one of the managers at Melbourne’s iconic cocktail bar The Black Pearl, is struggling to keep the family owned business afloat. “Like all of our peers, we’ve had to stand down the majority of our staff. We’re so fortunate they understand the nature of this tragedy and we all still treat each other like family. Our junior staff members still receive one on one training and we still all chat virtually. But the reality is there’s no way for us to survive this lockdown whilst still paying full rent. We need rental relief for commercial property to ensure the vibrant hospitality landscape survives, as well as relief for residential property to ensure the staff that make our venues so great survive, too.”

Chair of the Night Time Industries Association Michael Rodrigues said:

“The NTIA is working in real time with the hospitality sector to identify gaps in the legislation that will see it fall short of its ambition to keep people employed. A core concern remains short term cashflow which is simply non-existent for most as revenues were down 80% or more in March, exacerbated by bushfire affected trade in January and February. We will continue to put this and other sector specific matters on the agenda of the Government to ensure that we can save as many independent hospitality businesses as possible. 

“Other governments in Europe and Scandinavia are taking decisive action to save hospitality businesses – and we are calling on the Australian Government to do the same”.

Hospitality is the backbone of Australian cultural life, providing community, attracting tourism to regional areas and making our cities the most liveable and vibrant in the world. This industry represents tens of thousands of innovative small businesses and hundreds of thousands of jobs, and they’re all in serious trouble. While KOVA welcomes the government’s announcements about JobKeeper and the proposed code of conduct for commercial tenancies, it’s clear that the hospitality industry in particular needs comprehensive and targeted relief for venues, staff and suppliers as one of the most impacted sectors in the current crisis. 

For more information, head to: www.keepourvenuesalive.com

Download the media release here.

Image Credit: Time Out Australia