Home Hotel industry Upheaval in the hospitality industry in the Southland

Upheaval in the hospitality industry in the Southland

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Kim Aliu, co-owner of the Otautau Hotel, with his young sons Tariq and Khalid.  Aliu puts the lease on the market and seeks a lifestyle change.

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Kim Aliu, co-owner of the Otautau Hotel, with his young sons Tariq and Khalid. Aliu puts the lease on the market and seeks a lifestyle change.

The Southland hospitality industry is undergoing upheaval with reports of around 20 businesses for sale.

Many of those looking to leave the industry are long-time Southland hotel business owners and some of the reasons relate to staff shortages due to Covid-19 and people wanting to change their lifestyle.

Hospitality New Zealand Southland branch chairman Graham Hawkes said at the moment he could probably name around 20 food and drink tourism operators who were in the market for sale.

“I can also confirm that Covid-19 played a big part in this,” he said.

Staffing shortages and the need to add extra staff to check vaccine passes have been a huge issue for the results, Hawkes said.

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‘The other problem though and it’s a serious problem for hospitality in Southland at the moment is that government requirements through their mandates mean you have to have someone on the doorstep, for you ensure everyone is double vaxxed upon entry. It takes an extra staff member,” he said.

Plus, if table service was required, it would require additional staff, which would make the costs phenomenal, Hawkes said.

“Which has a huge impact on the bottom line. The reality is that hotel and tourism operators generally work with a small margin, between 10 and 20%.

“But, if you have to add two or three more staff – and seriously on some of these shifts where there is only table service – you will have to double your staff. So you can’t get a net result.

Graham Hawkes, president of the Hospitality New Zealand Southland subsidiary, enjoys his retirement at home.  He sold his business, Paddington Arms, two months ago.

Robyn Edie / Stuff

Graham Hawkes, president of the Hospitality New Zealand Southland subsidiary, enjoys his retirement at home. He sold his business, Paddington Arms, two months ago.

While the Covid-19 pandemic is one of the reasons owners are leaving, some are leaving for lifestyle changes.

Hawkes had owned the Paddington Arms since 1992 and sold it two months ago.

“But it wasn’t through Covid-19, it was just because the opportunity came and we’re old,” he said.

Invercargill restaurateur Jerin Nadar recently bought two hospitality businesses, Eat on Windsor and the rebranded Meraki Food Studio, as well as opening the Main Street Café and Restaurant less than a year ago.

Nadar believed that while all companies were feeling the effects of Covid-19, another major reason for the many changes of hands was to reach a saturation point.

“They just want to get out there and retire and relax,” he said.

Hotel Otautau owners Kim and Mutala (David) Aliu have decided to put their lease on the market to spend more time with their young family.

“Basically we just want to take some time off because…we’ve been in the pub all the time they have [sons Tariq and Khalid who are both under 5 years’ of age] been alive,” she said.

The couple bought the business in 2017, when they moved from Hangzhou, China, their sons were born around that time.

“When we started, it wasn’t really going to be a life sentence,” she said.

Covid-19 hadn’t been ideal for the business, but Kim said because the hotel is located in a small farming community, they were lucky compared to other owners when it came to having regular customers.

Currently on realestate.com for the Southland area, hotel businesses such as Lumsden Hotel, Riversdale Hotel, Capri Cafe and Restaurant, Aprarima Restaurant and Bar are a few listings available.