Auckland's decimated hospitality industry is in crisis mode as the region braces for a fifth week in lockdown, with embattled business owners struggling to meet fixed payments and support staff as their reserves continue to dwindle without any incoming revenue.
The future of the once-thriving sector now hangs in the balance as Auckland continues to battle an ongoing outbreak of COVID-19, which has surged to 955 cases.
Restrictions for the region, which entered alert level 4 on the night of August 17, looked set to ease this Tuesday, but a bump in cases and a cohort of "mystery" infections - people yet to be epidemiologically linked to the outbreak - saw lockdown extended for an additional week.
Auckland is now tentatively set to shift out of alert level 4 at 11:59pm on September 21, Prime Minister Jacinda Ardern announced at a post-Cabinet press conference on Monday.
But owners of Auckland's stricken hospitality venues are crying out for a greater sense of certainty as the region enters a state of lockdown limbo. It's not yet clear how long Auckland will remain in alert level 3 and alert level 2 - or even if it will enter alert level 3 next week.
"Worry and concern, frustration - just a few of the emotions people are feeling right now. It's the unknown that gets people... we're not sure. That's what really plays on the mind of our businesses at the moment," Restaurant Association chief executive officer Marisa Bidois told Newshub.
"We are disappointed... it certainly means more tough times for the hospitality sector."
At alert level 3, businesses able to trade via contactless methods can do so, meaning takeaways are back on the menu. However, in response to the highly infectious nature of the Delta variant, a new-look alert level 2 has seen caps tightened on events and gatherings.
Businesses are only able to seat a maximum of 50 guests indoors, while up to 100 people can congregate in outdoor settings.
The toughened restrictions mean a lot of businesses outside of Auckland - with the rest of the country in 'Delta level 2' - can open up to trade, but are operating at a loss, with not enough patrons to cover their overheads.
For Krishna Botica, she has had to sacrifice it all to keep her restaurant in business.
Speaking to The AM Show on Tuesday morning, Botica - who owns the esteemed Vietnamese eatery Cafe Hanoi in Auckland's Britomart - said she has become reliant on the charity of loved ones in order to keep the restaurant afloat and her staff employed.
"We had signed a couple of leases, six months earlier than the lockdown, and we had commitments to those to move our flagship restaurant to another site, and then open a new restaurant in the basement underneath that," Botica explained.
"So we had to move out of the house, our family provided an apartment for us to live in for no charge, and then we rented out our house. Our house is still rented out at the moment, because the house is the security for the loans we had with the bank in order to fulfill our lease obligations."
After it was revealed that Auckland would endure yet another week in lockdown, it was a sleepless night for Botica.
"I think the majority of people I know in the industry still very much support the elimination strategy... however, the burden that it is now placing on those of us, especially in the CBD in Auckland, and of course all of our staff, is getting a bit too much to bear," she said.
This week, Botica received an insurance bill totalling $25,000 - a fixed cost she is unable to ignore.
"Friends and family and the wage subsidies are very helpful, but we're still losing over $20,000 per week and the money will run out. We had some time to recover in the last alert level 1, but if we can't recover before we get to January, February, where Auckland leaves for a period of about four to five weeks, then I don't see a lot of businesses are actually going to survive," she said.
"We've only got a limited window. If there's another lockdown that's beyond level 2 in that period, the banks aren't going to be in a position to support many businesses. There's nothing left."
On Friday, the Government announced it would introduce an additional Resurgence Support Payment to assist businesses affected by higher alert levels with their fixed costs. Applicants must prove they have experienced at least a 30 percent decline in revenue over seven days as a result of being at alert level 2 or higher.
The Resurgence Payment includes a core per business rate of $1500, plus $400 per employee, up to a total of 50 full-time equivalents (FTEs) which is a maximum payment of $21,500. Businesses with more than 50 FTEs can still apply but cannot receive more than the maximum payment.
Following the announcement, the ACT Party slammed the response as not "nearly enough", arguing the Resurgence Payment should be made weekly under alert levels 4 and 3 - and level 2 for the hospitality sector.
"The Government's resurgence payment announcement will barely touch the sides for most businesses and more needs to be done," said ACT's Small Business spokesperson Chris Baillie. "[It] is a start - but it won’t be nearly enough for most businesses who still have outgoing costs like rent, rates and insurance."
Both Botica and Bidois agree the second Resurgence Support Payment is not enough to help struggling hospitality businesses, and more targeted assistance is needed to support the sector - which is disproportionately affected due to the customer-facing nature of the industry.
"I don't know how they can give us certainty with the Delta variant... but what we do need is more targeted support, the Resurgence [Support Payments] are not enough to cover our ongoing bills," Botica said.
Bidois says business owners appreciate the wage subsidy and the second Resurgence Support Payment, but they are simply bandaids for a much bigger problem.
"Targeted assistance is needed for the hospitality sector, that's what we'd like to see - more support for business owners who are heavily restricted with their trading or are unable to trade at all," she told Newshub.
She believes commercial lease assistance of some kind would also be beneficial, as even at alert level 2, it's challenging for owners to afford their overhead costs.
"Members are still having to pay the full price of their overheads to do business, but with reduced revenue, or no revenue at level 4."
And business owners aren't the only ones breaking under the increasing pressure. Bread and Butter Bakery director Isabel Pasch says employees are also struggling to meet everyday costs, even with the support of the wage subsidy scheme.
"After four, five, six weeks, their savings are getting diminished too - a lot of them already churned through their savings last year. And hospitality staff aren't the best paid, it's the nature of this business," Pasch told Newshub on Monday.
"For a lot of staff it's very hard as well because they don't have enough money to pay for everything they need… staff can't just live off the wage subsidy."
Pasch says without an income, she is unable to prop them up for long, with business reserves "completely eroded" by the inability to trade.
"It's taking a financial toll. The loss of turnover and business opportunities... there's no savings left. It's down to the bare bones."
She said the sector needs greater certainty about how it will be able to operate in the future as a people-facing industry in a period of time where socialising is limited.
"The whole industry is very disheartened I feel, it's very hard to keep staff motivated," she said.
"You need confidence to run a business... with so many uncertainties, I'm not surprised people are giving up, it's just too hard."
