Hotel and hospitality bosses are warning thousands of jobs are on the line without an extension of support from the federal government and an easing of restrictions at a state level once JobKeeper ends in two weeks.
Former Liberal workplace minister Craig Laundy, whose family owns a pub and hotel empire, said the government’s tourism and aviation package announced last week will not be enough to stop job losses and reduced hours in the hospitality and accommodation sectors.
Craig Laundy at the Woolwich Pier Hotel in Sydney, one of 30 pubs and hotels in the family empire.Credit: Dominic Lorrimer
Mr Laundy said his Novotel Manly Pacific hotel was operating at half its occupancy rate from two years ago. “It continues being on JobKeeper but come April 1 if our occupancies don’t pick up – and at this stage that is not looking likely – we’ll need to make decisions [about staff],” he said.
“It’ll mean decreased hours, which is underemployment. They won’t be working the hours they were before. That’s the coalface reality of what we will be confronted with on April 1.”
Mr Laundy said the federal government’s extra support for aviation and tourism industries - with its centrepiece of cut-price flights to selected destinations - was a “short-term sugar hit” that wouldn’t help struggling accommodation and hospitality businesses in major cities.
He said the “triple whammy” of no international travel, business travel or conferences would hurt those industries for a long time to come, and called on the government to offer more “surgical” support for affected businesses, akin to the JobKeeper wage subsidy regime.
Merivale boss Justin Hemmes.Credit: Renee Nowytarger
Merivale boss Justin Hemmes, whose Sydney hospitality empire includes more than 70 venues, acknowledged JobKeeper “can’t go on forever” but said if the financial lifeline ends in two weeks then restrictions on venues must ease.
“It has to be one or the other,” he said. “If JobKeeper comes off then we need the restrictions in bars to be removed. A business can’t be viable when its capacity is at 30 to 40 per cent ... there needs to be a shift and relaxation of the restrictions for the business to stay open and employ people.”
The NSW government has foreshadowed people will be allowed to stand up in venues again from Wednesday unless there is a sudden COVID outbreak. But it has not outlined a plan for easing the one person per two square metre rule which limits venue capacity.
Mr Hemmes said his Establishment complex in the CBD had a capacity of 1000 and “we rely on those numbers for it to be prosperous”. It has 180 seats and currently operates at that capacity; that would increase on Wednesday but only to about 300.
Asked if jobs were on the line, the Merivale owner said ”unfortunately yes - we can’t run businesses at a loss”.
Solotel Group’s new chief executive Elliot Solomon said the half-price flights could have an indirect benefit for some of his venues “but we’ll have to wait and see”. The group’s iconic Opera Bar is still operating without 30 per cent of its usual staff on the roster, for example.
Mr Solomon said the NSW government had shown clear commitment to the hospitality industry, particularly in unwinding regulations on al fresco dining.
“We hope that the easing of these regulations will continue moving forward,” he said. “We will be advocating to bring back dancefloors as soon as possible.”
All three hospitality bosses said JobKeeper had been a much-needed lifeline and state and federal governments had done a good job by suppressing the virus and rolling out economic stimulus.
Treasurer Josh Frydenberg said the next stage of his economic recovery plan was designed to boost spending through tax cuts, business incentives and skills investment, unlocking “more than $240 billion of deposits accumulated throughout the pandemic and sitting on private balance sheets”.
Accommodation and food businesses received $6.2 billion in payments in the first phase of the JobKeeper program and a subsequent $2 billion in cash flow boosts. About 44,000 businesses and 226,000 employees in those industries had already graduated off JobKeeper by the end of January.
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