The hospitality industry is still grappling with the repercussions of the COVID-19 pandemic, sector leaders say. A choppy recovery is particularly noticeable in areas such as restaurants, bars, hotels, and tourism.
While reforms to the Accredited Employer Work Visa scheme are set to be rolled out in phases starting at the end of this month and potential adjustments to visitor visa regulations have been suggested by the new Minister for Economic Growth, Nicola Willis, there remains a critical need for reforms that will attract highly skilled hospitality workers to meet the demands of New Zealand’s premium tourism market.
The cruise industry is currently facing significant challenges due to persistent gaps in the employment market, which have affected its ability to maintain consistent service levels. This situation has led to a 20% decrease in visitor numbers this year, with expectations of a further 30% decline in the upcoming season.
Meanwhile, the hotel industry is said to have not yet fully bounced back from the COVID lockdowns; Hotel Council director James Doolan said having a more flexible immigration policy could enhance labour productivity.
“Ever since we closed borders as part of Covid, we’ve had shortages in the hospitality sector,” he said.
“Those shortages have arisen in both skilled positions but also at times in unskilled positions in certain parts of New Zealand, like Queenstown.”
According to Doolan, some of the challenges could be resolved by allowing national hotel chains the flexibility to relocate staff to areas with high demand. Currently, such relocations are limited by existing immigration regulations, which restrict the movement of personnel where they are most needed.
Aside from labour shortages, the hospitality industry is also experiencing pressure on revenue and earnings. Data released by payments company Worldline indicates that spending in the hospitality sector has declined by 2.7% in 2024 compared to the previous year. This downturn is said to be deeply pronounced in cafes, restaurants, and bars throughout New Zealand, reflecting broader trends of reduced consumer spending and economic pressures affecting the industry.
“Being able to reinstate industry-specific advisors within the immigration department would assist in helping to process visas more quickly; that’s sort of one of our main issues,” Restaurant Association chief executive Marisa Bidois said.
“Despite all that, there’s a lot of optimism that remains, and many businesses are very hopeful that things will start to pick up. That was the mantra for last year—’Survive ’til 25,'” she added.