The hospitality industry is bouncing back to pre-COVID-19 revenue levels but staffing shortages and high costs mean prices will remain high for Kiwis.
The latest Restaurant Association Hospitality report released on Monday found nationwide sales for the industry have bounced back after two years of subdued trading.
In 2022, New Zealand's hospitality sector achieved record sales of over $13.38 billion for the year ending September 2022. This represents a sales increase of 7.7 percent over the previous year.
About $6.6 billion was spent at cafes and restaurants, which have returned to pre-COVID-19 sales levels, which was more than 15 percent higher than 2019, the report said.
Restaurant Association chief executive Marisa Bidois told AM on Monday it's "really great to see" the industry bouncing back.
She added they've seen strong growth in takeaways, which has increased by 4.8 percent over the past year.
"I think it's a combination of habits. During the pandemic, we saw those takeaway sales increase exponentially over that time as well and I think that sort of continued on in this space. But also contributing to that could also be the cost of living," Bidois told AM co-host Melissa Chan-Green.
Bidois said the sales increase is a great sign, but it's still a really tight market.
"Within hospitality, we still have those really tight profit margins that sit around sort of 3 to 7 percent on average for the industry, so it is still a very tight market," she said.
"But the sales increase is still an encouraging sign, especially as we compare that to pre-pandemic trading levels as well. So it's still a positive sign that things are improving in the sector."
One area that was hit hard during the COVID-19 pandemic was tourist hotspot Queenstown, but Bidois said there are positive signs for the region.
"We've seen an exponential jump in sales in the Queenstown area and I think largely that is because there was such a sharp decline in sales in Queenstown in 2021," she told AM.
"But it is also a sign that we've seen more visitors coming back into the area as well, which is good for Queenstown."
Immigration Minister Michael Wood said on Friday more than 20,000 people on working holiday visas had arrived in New Zealand since the border reopened earlier this year, with almost 6000 arriving in November alone.
But the Restaurant Association warned staff shortages are still plaguing the industry and had reached crisis point. In 2022, employee numbers increased by 0.37 percent compared to 2021 - the lowest growth level in more than 10 years.
The industry is predicted to need another 30,000 employees to keep up with the pace of growth over the summer period.
"Those numbers are really great to hear and we're encouraging those numbers but if you actually look at those numbers and compare that to the numbers of holiday visa workers we were getting prior to the pandemic it's still roughly only around just under half," Bidois said.
"So we are still seeing a bit of a gap in that labour force that we have been reliant on in the past. So there is still a very tight squeeze in our labour market and hospitality."
With high costs and staff shortages still putting pressure on businesses, Bidois said it's unlikely prices will come down anytime soon.
"I mean with food costs rising across the board and in fact, we've seen an increase of food costs sitting at around that 10 percent mark," she said.
"With those costs sitting within our businesses currently, I definitely don't see any chance of a price decrease in our industry at the moment."
Watch the full interview with Marisa Bidois above.
