Supporting our customers during the Coronavirus read more

How Hospo Can Thrive During COVID-19 Level 2

COVID-19 has hit the New Zealand hospitality industry hard. Weeks of lockdown and restrictions have forced restaurants, cafes and bars into hibernation, with a whopping 95 per cent drop in electronic spending over April for food and beverage services. Even the big players have struggled to stay afloat, let alone the independent eateries and cafes that make Kiwi food culture so unique.

But despite this, Kiwi ingenuity, pure grit and the loyalty of the NZ population has meant that not only have some hospitality businesses come back during level 3 – some have come back stronger than ever. Entrepreneurs have embraced delivery and remote dining, developing websites and investing in new ways to get hungry Kiwis what they crave.

Now that we’re heading into Level 2, there will be new challenges. Doors can be thrown open and kitchens can be fired up for physical dining, but with the new level comes new restrictions that means that things aren’t quite back to normal yet. But this ‘new normal’ could spell opportunity for hospitality business owners willing to invest. Here’s what you need to know:

 

What are the new restrictions?

Restaurants, cafes and eateries will be able to open, with bars and other venues that primarily serve alcohol coming later. But there will be some rules to follow:

  • You must have good contact registers or contact tracing records to record everyone who you interact with on your premises.
  • You must maintain physical distancing of 1 metre between groups of customers or 2 metres if not possible to keep contact tracing records.
  • There must not be groups larger than 10 people.
  • You must maintain a 2 hour time limit for customers to be on your premises.
  • You should keep groups seated, separated, and use a single server if possible. This means each group has one server, though servers can each serve more than one table.

Find out more on the dedicated Government website.

 

What are the challenges?

  • Lowered capacity. The physical distancing and seating requirements could reduce the capacity of cafes and restaurants, possibly losing revenue.
  • No big groups. Hospitality businesses that rely on events, conferences and other large groups of people will not be able to have more than 10 in each group.
  • Single server requirements. Each group having a single server could also increase the requirements on staffing, further increasing costs.

 

What are the solutions?

Some of the challenges can be solved through careful planning of premises: adjusting layouts, investigating outside seating, and so on. Once you’ve exhausted the options for staffing and floor plans, you may still struggle to reach the same capacity of service as you had prior to lockdown.

That’s where the previous efforts during Level 3 comes in. Guests and customers will be just as restricted as the businesses in where they are able to eat, and many will instead turn to delivery as alternatives to eating out.

If you haven’t already invested in these options, now is the time to do so. If you have invested and are comfortable, it’s worthwhile to expand your reach in this arena.

Some options to consider:

  • Getting more delivery drivers to reach new areas.
  • Increasing your advertising and marketing spend, particularly on Facebook, Instagram and other digital platforms: people are spending a lot of time online!
  • Expanding your delivery menu so that customers have more options and are more likely to stay in and take the pressure off your physical premises.
  • Try being creative: digital dining experiences that bring the restaurant to the comfort of the home through livestreaming or similar could be enough to peak the interest of those looking for a new way to dine in this ‘new normal’.

 

Summary

Level 2 lifts the lockdown further, but introduces new restrictions that could stifle the celebrations of hospitality businesses. But the lessons learned about the cravings of Kiwis and their willingness to turn to delivery and similar options to feed them should inform savvy business owners as to their next step.

Invest in new layouts and new staffing and throw open your doors, but also be ready to invest further in delivery options that give the people what they want, when they want it. Adapt to the new normal.

If you find yourself in need of extra cash to invest in these new measures, GetCapital may be able to help you with equipment finance or a working capital loan.