August 10, 2025 • 32 mins
They are some of the biggest industries affected by a slumping economy, so how are they holding up in 2025?
Unemployment and inflation have both risen in the latest updates, foot traffic in the Wellington CBD is still down, and both sectors are about to be stung with increased costs as the government bans contactless payment surcharges.
So, how are retail and hospitality operators feeling, and are they hopeful for something of an economic recovery by year's end?
To answer those questions, Hospitality NZ chief executive Steve Armitage and Reatil NZ chief executive Carolyn Young joined Nick Mills for the Business Panel.
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Speaker 1 (00:07):
You're listening to the Wellington Mornings podcast with Nick Mills
from news Talk.
Speaker 2 (00:11):
Said B.
Speaker 1 (00:13):
Monday's meaning Business. It's the business panel on Wellington Mornings
with Quardovic Property Management a better rental experience for all.
Visit Quardovic dot co dot insad.
Speaker 3 (00:23):
Let's get down, let's get down. Monnight mo night characters.
You've had a million million nights just slack persons, So
let's get down. Let's get down to persons.
Speaker 4 (00:39):
Join us for our business panel this week, and I
really enjoy this. Part of the show is Hospitality New
Zealand CEO Steve Armitage. Steve, welcome to the show. Good morning,
how how are you feeling a bit cold out there?
Speaker 5 (00:52):
It is bracing out there in the elements here, so
I've just found down from Auckland, so it's just as
cold up there. Day to be fair, but a bright
blue sky to compare with the gray's.
Speaker 4 (01:02):
Apparently supposed to lighten up. And we'll we'll. I'm going
to get into lots of conversation with you and Retail
New Zealand CEO Carolyn Younger. Morning Carolyn, what Nick?
Speaker 2 (01:11):
How are you doing?
Speaker 4 (01:12):
I'm doing great now. I walked down Lampton Key on Saturday,
and I thought about you. I thought, by god, you know,
I know personally how tough it is in my industry,
but I don't think i'd like to own a small
I don't think i'd like to be vance Vivian Right
now in Wellington there was just no traffic.
Speaker 2 (01:33):
It's really tough, right and when you've got me. We
had a particularly cold weekend with highs of five and
six degree wintil factors of about one percent, and it
doesn't entice people out, but you know, there are some factors.
Sometimes it's you know, you've got to pay for parking,
you know, being able to access into the city. It's
got to be easy for people to want to come in.
(01:54):
And we're doing that off the base where it used
to be free weekend parking and so people would come
into the city and they could park, and they could shop,
and they could go to lunch and have a great
time in the city. And all of those things feel
too hard. And I've had people telling me they spend
more time going out into the suburbs or going to
the malls because it's easier.
Speaker 4 (02:13):
Do you remember when Saturday mornings used to be an event?
Saturday morning of walking down you know, Queen Street or
Lampton Key with your parents used to be an event.
Go out and buy a new pair of jeans and it.
Speaker 2 (02:26):
Ages us a little bit. But I remember when shops
didn't open on the weekends.
Speaker 4 (02:31):
I want to talk about that. It's good. Yeah, but
I remember that too, But I was like four years old. Steve,
tell me, I mean you're at Auckland based, So is
it the same in Auckland as Wellington got its own
because everyone thinks that Wellington's got trials and tribulations on
their own.
Speaker 3 (02:47):
Yeah.
Speaker 5 (02:48):
I think for the last eighteen months to two years,
Wellington has borne the brunt of the commentary around the
struggles of hospitality very well traversed territory, around government cutbacks,
the reduced number of public servants and just the reduced
football in the city center here. But in recent times
Auckland has also started to find things. They're going pretty tough.
(03:10):
There's a huge amount of reliance on the CRL and
nz ICC convention center opening in Auckland, but ultimately they're
still lacking an incentive to get people into the city.
You need an occasion, you need events to stimulate that
foot traffic because as Carolyn's just touched on accessibility and
the cost to get into venues is increasingly difficult for people.
Speaker 4 (03:31):
Tell us right now, how you're feeling hospitality is what
sort of state is hospitality? It's only feels like yesterday
I was talking to Carry prender Gas on the show
Dame Carey prender Gas, when she was in charge of tourism.
She was telling me tourism hospitality was actually more of
an income earner in New Zealand.
Speaker 5 (03:52):
Dan Derey was well, that was the case. It's clearly
not at the moment, and there is a synergistic relationship
between tourism and hospitality. We are seeing ongoing struggles in
the hospital sect because those visited just haven't rebounded in
the way that we need them to. So the recovery
of the tourism sector does give me hope, because we're
still only a sort of eighty six eighty seven percent
(04:14):
of the capacity of tourists we had prior to COVID,
So as that number starts to incharpe, I think that'll
provide some relief to hospitality operators. But at the moment
we're heavily predisposed to the challenges that most households are
finding and that household income and the pressure that's on
that at the moment is meaning that that spend, that
(04:35):
luxury spend that people have for going out is just
isn't there.
Speaker 4 (04:39):
Carolyn, You'll be feeling exactly the same for retail or
I'm not going to put words in your mouth. I mean,
how is retail right now, right in the middle of winter.
Speaker 2 (04:46):
Yeah, it's dark, you know, it's really difficult. All kind
of Wellington are particularly challenging. There are some small areas
in the provinces governed by that rural factor that are
doing a little bit better, where the money from dareas
flowing back into their local environment. So that's holding some
businesses up in terms of those bass but largely we're
(05:09):
just hearing that sporadic trade where you know, one day
doesn't follow the other, and you know, it's just really
hard to get a sale and to be successful. We're
still seeing lots of businesses close and largely you know,
can't negotiate leases when they come up for annule, so
can't get it at a reasonable price. That with rates increases,
(05:32):
you know, the cost of payments, the cost of insurance.
People are saying we just can't see how we can
make ends meet and survive until things turn around. So,
you know, we had the thing in twenty twenty four
about you know, survived to twenty five, and now it's
all about surviving in twenty five. And I don't see
much light at the end of this year. It's going
(05:53):
to be next year before we start to see any
economic change. That's going to mean that households feel that
they can come into town and go out to lunch
and go into the stores and buy things.
Speaker 4 (06:03):
But we kept on telling it. Get being told that
second half of this year. Are you saying it's not
second half of this year.
Speaker 2 (06:09):
Look, we've got one more rates cut likely probably in
this reserve bank cycle. In this month. They're going to
do another, probably twenty five basis point cut. They have
signaled they're not looking at doing any further cuts for
the rest of the year. So where we're going to
get the stimulus. Consumer confidence is critical to both hospitality
and retail. Consumers are feeling uncomfortable about job security. If
(06:32):
you don't have job security, you're not going to go
out and purchase things. Mortgage rates are still high. The
cut that the Reserve Bank is going to do is
already bought into the priced into the mortgage rates at
the moment, is what we're being told. So just finding
out where is that relief for consumers. If we don't
get consumer confidence, businesses won't be able to turn around
(06:52):
and they won't survive.
Speaker 4 (06:53):
Through Steve Armitage, we were told over the weekend. Well,
I read over the weekend that we've been told. You know,
if Dairi's doing well, New Zealand's doing well, back off,
stop moaning about the price her butter because of dairies
doing well. Who cares? We're all doing well? Is that right?
As far as hospitality in New Zealand's concerned, Look.
Speaker 5 (07:14):
It's hard to it's hard to confirm that in a
general sense. I think if you look at the performance
of hospitality operators in the South Island you could certainly
make that link. Clearly. You know, their economy is heavily
predisposed to the agriculture sector. We're seeing strong performance on
the West Coast, We're seeing strong performance in Canterbury and
the lower South Island, so you'd have to say, you know,
(07:35):
you could draw a link between the two on that basis.
It's really the major centers Wellington and Auckland where the
going is the toughest. And I'm sure we'll get to
a discussion around this, but that that need to invest
in events to try and drive visitation is what's really
missing at the moment.
Speaker 4 (07:50):
Can I just ask you on the christ Church you know,
because everyone in hospitality is saying they're doing really well.
That is that because they are progressive and rebuilding city
as well as the farming. I mean they are. They've
got you universities doing well. Everything seems to be on
a high. And I'll come to you Carolyn on that too.
Is that something that we could look at and say, well,
christ you's doing okay?
Speaker 3 (08:11):
Yeah?
Speaker 5 (08:11):
I think so. Clearly they've had their challenges to overcome
over the of course the last ten to fifteen years,
but they're now making every post winner. The fact that
you've got a council and the council entity itself seems
to be really well joined up and clear on what
their vision is for the city. Every time I've gone
down there in recent times, I've been surprised with the
footfall and the positivity around the city center itself. And
(08:34):
then you throw on the likes of Takaha stadium coming
online and hopefully a program of events which we'll see
that really showcase the city. There's a lot of optimism
in around Canterbre at the.
Speaker 4 (08:44):
Moment, Carolyn, Are you hearing the same thing in retail?
Speaker 3 (08:47):
Yeah?
Speaker 2 (08:47):
Absolutely. Look and to Steve's point, they've gone through, you know,
ten to fifteen years of really difficult times and the
city is now beautiful right and largely rebuilt, and so
their pipes are all done and all of their infrastructure
work has done, which we can't say the same in
other major cities around the country. And they are still
(09:07):
supported by that dairy which is flowing and through. And
they did have an influx of people post COVID. Lots
of people from Auckland moved down to christ Church and
found opportunities there that they felt were better for them
and their family. After going through COVID, people had a
look at themselves and sort of determine what they wanted
to do next. So certainly it's more positive and buoyant
(09:30):
in christ Church than it is in other parts of
the country. And you know, Auckland is a really critical
part to the country, so dairy we can't say that
dairy is not important, but Auckland likewise, is also really
important because of the sheer size of the city and
the volume of the GDP that the percentage, it's something
like sixty percent of the GDP comes out of Auckland.
So if Auckland's depressed, they've got a higher level of
(09:50):
unemployment than the rest of the country on average, then
you know we're going to struggle as a country too.
And you ask individual people how they're doing, they're not
going to say they're doing great.
Speaker 4 (10:02):
Right now, business Panel today we have Steve Armitage and
Carolyn Great Carolyn right young, Sorry Carolyn changing your name
now State of the Economy. I want to talk a
little bit more about what you said was sir Carolyn
survived to twenty five. I honestly think we're going backwards.
What is your feeling, Well, I think.
Speaker 2 (10:23):
It's the compounding factor, right, It's that we've had a
long period of time where where businesses are really struggling
in New Zealand, and so if people aren't making a
profit and they're making a loss, it is compounding and so
it does feel like you're going backwards. The comparative numbers
retail cyclical, so we look at year on year numbers.
So if you look at July versus July twenty twenty four,
(10:45):
the numbers are there or thereabouts, but we're off a
really low base and it's been really challenging. So if
businesses weren't making money last year or the year before,
they're not making money this year. It does feel like
it's getting compoundingly worse. And sometimes there's additional factors that
come in that you have more of an impact on
businesses or just more on morale as well, around how
(11:07):
you can keep being buoyant in a tough environment.
Speaker 4 (11:10):
Well, you've got to love what you do, Steve, don't you.
Speaker 5 (11:12):
Yeah, Well, I think going backwards is how most households
feel that the narrative that's out there and the government
has been pushing it, is that with the interest rate cuts,
there's some additional spend coming into each household, a little
bit more discretionary expenditure, But of course the cost of
everything is going up at the same time at an
increased rate, So although you might be getting a few
more dollars in your pocket, that's going out again and
(11:33):
increased insurance premiums and other things. So most households, I
don't think buy into that narrative that the government has
been running around some additional headroom and your expenditure, because
it's just simply not the truth.
Speaker 4 (11:45):
But I mean in your industry too, hospitality, if they
look back on last year, they're going to probably I mean,
that's no point looking at those figures, like Carolyn said,
because they were tough. I mean, if you put your
figures from July twenty five to pre COVID July, what
would many of them say.
Speaker 5 (12:02):
Oh, yeah, there's no comparison. You're absolutely right. I mean
I do I have some hope, you know, And I
think it's really important that we don't just perpetuate this negativity,
right because part of why I think we have a
struggle getting young people to come into the sector is
because if you pick up the paper day to day,
all your reading is negative commentary around the current state
(12:22):
of the sector. So if I think forward, if I'm
looking at summer, you know, we know, as Carolyn's just
alluded to, with retail hospitality is very cyclical. Were expecting
to spend over that period from a domestic visitation point
of view, and with increasing connectivity to some of those
major international ports through more flights coming in a reasonable
(12:43):
cruise season and other things that gives me some comfort
that summer should be reasonably stable for most hospitality businesses.
Speaker 4 (12:49):
Can I both ask you both very quickly? I mean,
looking forward? What is the industry? What are your people?
What are your foot soldiers that own small retailers or
you know, what are your foot soldiers telling you? Karen?
Speaker 2 (13:01):
Look, The challenge I think is Steve outlined is some
of the ongoing expendits increases they've seen on things that
they can't control. When you look at insurances, leases, rates, wages, payments,
all of those things that's been really challenging. Businesses are
still inspired by the work they do, and they've still
you know, they have bought stock for summer and paid
(13:23):
for it already. You know, spring stock is arriving in
store already. Summer stock won't be far behind, so they
have to make it work. Businesses are really inspired and
how do they make it work? Because they know they've
paid for the stock and it's coming in, So they've
got to find a way to stay open, hopefully get
through summer and then the economy might have turned a
little bit more by then. We've got a launching pad
into next year. At some point we are going to
(13:45):
see that positivity turn around. And how prepared we're going
to be for that and what initiatives we're going to
have in place to ensure that we can continue to
thrive going forward will be really important.
Speaker 4 (13:56):
Steve, your industry are you seeing because we're not seeing
it in Wellington. We're seeing people buying old cafes and
putting a coat of paint and few tiles and changing
the name. But it's been a while since we've seen
a million dollar bill. I mean, and that you well
know was happening every week all over New Zealand.
Speaker 5 (14:14):
Yes it was, yeah, and there are there are still
instances of that happening in other parts of the country.
It's not the case here, yes, but there are certainly
some confidence in other areas and investment of reasonably significant
nature taking place. But you just come back to the
point around where things are sitting at the moment. I
think the recent announcement around the merchant fees and surcharge
(14:36):
right now that has a huge impact on the bottom
line of a lot of our members. Speaking to one
last week who say, you know, the cost and position
of having to absorb that into his business is around
ninety thousand dollars a year nineteen nine zero. Right, Wow,
the annualized profit for that business is one hundred and
thirty five if you're you know, that's a huge whack
(14:57):
out of the profitability of that business just through one decision,
which seemed to me to be very rushed. There was
a very little consultation about it. Convenient line publicly to
say this is going to help your pocket, but the
reality of that is really tough for business.
Speaker 4 (15:11):
And can I just ask you what the reality of
that transpires to?
Speaker 5 (15:16):
What's going It's going to mean that prices go up?
Speaker 4 (15:19):
Yeah, they can't absorb that, No they can't. How can
any business absorb? And it's retail as.
Speaker 2 (15:24):
Well, absolutely same, you know for a small retailer, and
it is really a play for small businesses because the
bigger guys have been able to negotiate better rates. We
know that forty percent of transactions that go through through
the switch are if posts and so they are free
of charge. But then that means that sixty percent of
the transactions that go through are not free and so
(15:44):
you know, the current legislations enables retail or a hospitality
business to recoup that through a surcharge and just removing
that point blank and saying that businesses have to absorb that.
It's not thinking through some of the repercussions, and there's
some unintended consequences in that we're going to see an
increase of contactless payments occur across the network, so more
(16:07):
funds and fees will go to banks and credit card companies,
and that will mean that less transactions go through the
FPOs switch, so a higher percentage of transactions will incur
a fee, so that that business that's incurring a ninety
percent a ninety thousand dollars fee now will probably rise
by between forty and sixty percent, So they're going to
(16:28):
go up to one hundred and thirty thousand dollars or more.
And what's going to happen is that they're going to
be in a break even space. So the only way
that businesses can small business especially can survive through that
is to change price, because that's the only lever they've got,
So it becomes an inflationary measure. And you know, we're
going to be lobbying really hard through the consultation process
and Select Committee to really make sure that government understands
(16:52):
the impact on small business and New Zealand is made
of smeeths. We've had a whole range of different people
outside of retail contact us. You know, from panel beaters
and mechanics and really small businesses that use payments as well,
but they're not viewed necessarily in hospital or retail, but
they are a merchant and so they understand the cost
(17:13):
that's happening and how it impacts their business.
Speaker 4 (17:16):
So right across in the business panel for our every
Second Monday, and we have Hospitality in New Zealand CEO
Steve Armitage and Retail New Zealand CEO Carolyn Young. Let's
talk about foot traffic. I'm going to come to you
Steve first, Well, n CBD foot traffic is nowhere near
pre COVID levels. How much do you reckon that is
(17:37):
directly hurting hospitality in retail? Now, if I want to
go out and buy a shirt, I'm going to drive
into town and I know where I want to buy it,
so I'm going to do it. If I want to
go out for a meal or a drink, I know
where I want to go. Is am I making it
too simplistic?
Speaker 1 (17:51):
No?
Speaker 5 (17:51):
You're not. No, but foot traffic is absolutely hurting our sector.
You can see it day to day just walking here.
You know that there just aren't people around to sustain
the businesses that their doors open at the moment. So
until we find a way to incentivize people to come
back on a regular basis, those businesses are going to
continue to find it tough. Now, Wellington, New Zealand and
(18:12):
other entities like it up and down the country. Part
of their remit is to incentivize visitors to come into
the region. The city center is a key part of that.
I have some sympathy for the likes of Wellington en
Z because due to cost pressures, councils have had to
put investment into other areas. Literally in Wellington the pipes
underneath our feet. It's meant that there's less funding going
(18:36):
towards the likes of a Wellington n Z to try
incentivize visitors to come into market. So that lack of events,
those lack of activations that you might have been accustomed
to in past times are certainly hurting in week to
week are meaning that we're just not getting the number
of people into the city that we'd like to during
the day.
Speaker 4 (18:53):
Carolyn, is there any more than we can do to
get people in.
Speaker 2 (18:57):
Look, it is really difficult right unless people are coming in.
We know that people's shopping head of its in retail
have changed, so their first porter call is generally looking
online and research online then coming into store. But if
you have more people working in the city, naturally they're
going to go down Empton Key. They'll be down Wallow Street,
they'll be along the terrace, they'll get a coffee, they'll
(19:17):
buy lunch, they'll see something in store and they'll come
back and they'll buy it. So if you're not here
and you're not flowing through, then you're not going to
have those purchases. So I do think it's important that
people get you know, that we get people back working
in the city and then it's about changing habits. People's
habits changed after COVID and they haven't come back out
(19:38):
as much as they have previously. So it is you
know what doll we do? You know, what are the
events that we can bring on. We know that Wellington
Visa Wellington on a Plate is on at the moment.
It's a great event. It's you know, one of the
largest hospitality events and around the Oceania region. It's a
really great thing. But what's next, what's going to bring
people out next month and the month after and the
(19:59):
month after that, because those things we know, WOWE is
really great for retail and it's probably good for hospital
as well. So really having that catalyst and that flow
of events across the city and needs to be replicated
across the country because events are really critical to bringing
people in, whether they're international tourist or domestic terrorists.
Speaker 5 (20:18):
We've advocated alongside other associations for some time now for
a form of accommodation levy to be introduced, so when
international domestic visitors are moving around, there's a small surcharge
on the bill which would raise a significant sum of
money that would be reinvested in the region that it's
generated in and it could go towards destination management destination marketing.
So provides a war chest if you like to be
(20:42):
able to invest in major events which the city is lacking.
Speaker 4 (20:45):
Right. Tell me about you both would have discussions with
both the councils and government. I mean, Steve, have you
mentioned have you had the discussion with government about trying
to get the government workers back working in the offices.
Speaker 5 (20:58):
Yep, Yeah, and when the announcement was made or some
eighteen months ago, now twelve months ago, specific to Wellington,
you know, public servants were going to be spending more
time in the city center. They were being instructed to
come back into work. You know, we welcomed that decision.
We thought it was an important statement by the government.
It hasn't resulted in a significant uplift and spent. I
(21:21):
don't know that the behavior is actually reflected in the
day to day realities of those of the ministries and
departments around Wellington.
Speaker 4 (21:27):
Carolyn for retail, is has it helped or is it hindering?
Speaker 2 (21:31):
Well, we haven't seen it uptick yet. And I think,
you know, the government is one part of that. And
then you know, you think of all the commercial businesses,
the law firms, their accounting firms that you know, every
other business, architect firms, you know everyone. We need all
of them to be coming into the city and to
be getting back to those habits that we had pre COVID.
Speaker 4 (21:48):
So, you know, is it a reality? Sorry to interrupt there,
but is it now just becoming I can hear our
listeners say, is that just now a reality? And that's
not going to be fixed?
Speaker 2 (21:58):
Not necessarily, if businesses see value in having their workers
in their in situe, being able to engage with each
other and work more efficiently and effectively, they'll encourage them
to come in. So I think it, you know, I
think it depends. It doesn't have to be that everybody
works from home. I think, you know, you can be
more efficient and effective if you're working in person.
Speaker 5 (22:20):
Yeah, I think culture suffers when you don't have your
people together on a regular basis. You can't build culture
through a screen, in my view, you have to have
people physically co located and getting to know one another
and understand that they know what purpose they're working towards.
So I think we've suffered as a result, and it's
one of the struggles that we have around our sector.
(22:41):
Holding on to talent is a real bugbear, and I
think you're finding young people in particular don't have that
sense of attachment because they're not used to in general sense,
they're not used to working as part of a team.
They're doing it remotely, and so as a result, they
don't see themselves investing in the long term, and a
lot of businesses that could be benefiting from retaining that talent.
Speaker 4 (23:02):
And could it change people's habits. I mean all three
of us grew up by going on a Friday night
to have a bear with your workmates and meet new
people and get out there and be part of life.
I mean we've all got probably lifetime friends that we
met at a pub that had nothing to do with
work or sport. Is that hurting us the one?
Speaker 3 (23:20):
In my view?
Speaker 5 (23:21):
Yeah, Like I say, I think culture is critically important.
Speaker 4 (23:24):
Now.
Speaker 5 (23:24):
It doesn't mean you always have to be having a
drink in your hand to build culture, but the opportunity
to socialize and get to know one another, understand what
makes each other tick, how you can get the best
out of somebody just through a conversation. I think is
lost when you're doing it arbitrarily through a screen and
you've got to fix time for a meeting.
Speaker 2 (23:41):
And look, things happen organically right in an organization. So
those organic conversations and you know, it's the water cooler conversation,
right that you wouldn't have found out something like oh wow,
I didn't know that you did that. Oh we must
connect up because I'm doing a piece of work and
I think it aligns with what you're doing. I better
make sure that I've covered off what you need to
have at your end as well as what's happening with
other people. So you know, being in the office provides
(24:04):
those opportunities and that just gives sustainability to cities and
we can all thrive rather than the struggles that everybody
seems to be heaving at the moment.
Speaker 4 (24:15):
Business Panel with Steve Armitage and Carolyn Gray. Can I
just ask you Steve, firstly, you probably saw the front
page article in the Post on the weekend about how
difficult Wellington City councils making it for liquor licensing in
this city. Can I give you an example. We have
a little room at a restaurant, a little little area
at the back of our restaurant's a bar, private bar,
(24:36):
and we wanted to change the side door of it
to allow people to go in the door. They have
to come through three and a half thousand dollars to
do an amendment to a license to change an entrance
to a doorway.
Speaker 5 (24:48):
Yeah. Look, this issue routinely comes up, but there's no
question Wellington has been the loudest in terms of the
cost impact for business and a sense that there is
a slightly different view being taken by those involved parties
here the relative to other parts of the country. So
we've provided a to regular examples of businesses that operate
(25:09):
in Auckland and Wellington other parts of the country. They're
putting in the same information. They're getting their license in Auckland,
but there's hurdles that have been put in front of
them in Wellington. And then you've got the cost of
friendship too. You know, it's more expensive annual need to
get a license here in Wellington that it is in Auckland.
Speaker 4 (25:25):
So I'm not sure that you know. But if you're
going to go for a four o'clock license in Willington
now they just put the price up to ten thousand dollars.
Speaker 5 (25:31):
So we've asked the Minister to look into this. We're
hoping that we're going to be put in front of
the Ministry of Regulations for an opportunity for this to
be looked at in detail. That what we would like
to see is just some consistency. It shouldn't have regional variation.
Speaker 4 (25:45):
Are you hearing the same caarent Are you hearing that
your people in retail are having more difficulties with Wellington
City Council than anywhere else in the country.
Speaker 2 (25:52):
And not specifically. No, we know that the RMA is
a really big challenge and it's a really big barrier
to opening news stores, and it just puts lots of hurdles,
cost time, and you know, people consider whether or not
it's valuable. So RMA is a big barrier to entering
(26:13):
the marketplace that we haven't heard that there's a differential
in terms of Wellington City Council.
Speaker 4 (26:17):
Okay, let's talk unemployment. The unimble employment rate came out
last week. It's now five point two percent, with many people,
especially young people, especially young people out of work. Steve,
are you seeing this in hospitality? What's the vibe like
about getting young people to work?
Speaker 5 (26:32):
Well, there are certainly jobs available in hospitality. If I
go up and down the country, Look, there are vacancies there.
What I think is part of the problem is that
there is an expectation amongst young people that they should
be working at a particular level and earning a particular amount.
There's not so much of a responsibility on them to
prove their stripes, to get to know a business and
work your way up. So I think there's this mismatch
(26:55):
between people's expectations and the reality of starting and forging
a career. That's something that we need to overcome. Perception
is also a challenge for us in hospital You know,
we've talked earlier about the fact that if you're opening
up the paper and you're reading negative headlines all the time,
it's a hard ass to try to sell that when
businesses are doing it particularly tough and you don't know
(27:16):
if the business is going to be there in the
long run. But also parents, you know, I think there's
some responsibility there. Hospitality has looked at as a as
a brief stop on the way towards doing something different. Now,
I think hospitality can be a hugely rewarding business career
for people. It can take you all around the world.
It can take you into business management, ownership and so on.
(27:37):
And we don't see it celebrated in the same way
that you do in the Northern Hemisphere, where people work
in hospitality and are still waiting status well into their seventies.
But we just don't treat it the same way. Yeah.
Speaker 4 (27:46):
Same with retail, isn't it, Karen.
Speaker 2 (27:48):
Yeah, Look, perception of working in retail is the same.
It's not great and one of the things that we
know that working in retail can do. Look, everyone has
to start at the beginning, and the beginning is often
the shop floor, so most people don't start higher up,
especially when you're young. Right as you say, you've got
to earn your stripes. But the thing about working in retail,
sure it's similar in hospitality, is that if you're enthusiastic goods,
(28:10):
you're a quick learner. You you know, you turn up,
you do all of those sorts of things. Acceleration through
to leadership happens really quickly in retail, and there's really
a lot of opportunities. And then secondly in retail, you know,
some of the bigger operators, you can do almost anything.
You know, you could be a buyer. You could be
buying things internationally. You could be doing marketing, you could
(28:32):
be doing health and safety, you could be doing technology.
There's a whole range of things, and it's not a
linear start at this point and finish at that point.
You can go, you know, you can transverse a whole
range of different things in retail. And we've got a
really interesting program that we're doing seven jobs and seven
days in TikTok So for young ones. Have a look
at it. It's a really great way in which you
(28:53):
can see what retail could look like if you're young.
Speaker 4 (28:55):
And you know, the other thing for both your industries
or our industries is social media. I mean, you know,
so the growth of social media. I know hospitality has
been quite slow to pick up on it. It's massive now,
same with retail. I mean for young people, they're so
damn good at it.
Speaker 2 (29:12):
Night yeah, I mean there's lots of skills that young
people are really amazing at, but just widening their thought
around what a job and a career in retail could
look like as the key thing. And making sure that
people don't think that your job has to start and
stop on the shop floor. There's so many more things
that you can do.
Speaker 4 (29:29):
Okay, As we wrap the business panel up, we ask
our guests what they would do to I don't know
if Steve, if you had to meet someone and go
out for lunch or dinner or do something in Wellington.
I mean, you are an ex Wellingtonian, but your CEO
of hospitality in New Zealand, you want to really impress someone,
what are you going to do?
Speaker 5 (29:48):
I'm going to avoid that because I can't afford to
pick a membo over another, right, I am an outdoors
kind of guy. I really enjoy Wellington on a good day,
don't we all? But I quite like going around the
fort battlements, up around Merryma pinentually there Scorching Bay. Have
to take my daughter there. We haven't had a chance
to do that yet. It's certainly a high my agenda
(30:10):
to do take around there.
Speaker 4 (30:11):
Do you still enjoy Wellington? When you come to Wellington?
You come here very very often. It's not like you're
a stranger. Do you still enjoy it?
Speaker 5 (30:19):
Wellington is different to the rest of the country. I
particularly enjoy Wellington during the summer months. I love walking
around the waterfront. I like feeling connected to decision making
down here. I would like to see more of that
decision making rather than obfuscation. But no, I do enjoy Wellington.
I enjoyed living here for a period of time, but
Auckland was always calling me back home for family reasons.
Speaker 4 (30:41):
Okay, Carolyn Young, you looked as much as shock as
I did over that. It wasn't a great shining example
of great Walingtonia. But you are a WALIINGTONI what are
you going to do with that special person you pick
up at at the airport tomorrow.
Speaker 2 (30:54):
So what we do is we'd swing by Cava Ice
pick up a coffee. They are really great. They give
you a discount if you've got a takeaway cup, so
view at your own cup. So we'd go in there,
get a coffee. We'd go up, we'd high cup Mount
kalkau to you know, actually see the whole traverse everything.
We love that walk down there. When we come down,
we would stopping at Dunchee's Delly for lunch, so Craig
(31:17):
would look after us, have great food there, and then
we'd go into the Candala CBD. You go and see
Sheila at Hamilton Monnett Murray. You'd go into TP and
you go into Gubs Shoes and then probably pick up
some flowers from the local candalad area on the way out.
Speaker 4 (31:30):
You're a Candala girl. Craig dun Share, that's a name
that from the past. That's the old neo cafe guy,
isn't it. He used to play lock for Wellington Rugby.
You lot more information. I should be a talk back coach,
didn't I.
Speaker 2 (31:43):
Hospitality ask him for the recipe for that? Karen was slice.
Speaker 4 (31:46):
Okay, I'd never been up there. But I will definitely
now that I know that he runs. I've never even
heard of it before. Hospitality in New Zealand CEO Steve
mahmat To take you and thank you for everything you've
done for Hospitality New Zealand and your role there. I
know you're moving on.
Speaker 5 (31:58):
Thank you.
Speaker 4 (31:59):
You spoke too soon about my voice, Carolyn, so I
appreciate and good luck on your new job at Sailing
New Zealand. Thank you always good to catch up. Bols
didn't do that well this year Today, Carol Young's and
x CEO of The Pulse.
Speaker 2 (32:12):
They made the playoffs. Still a good start.
Speaker 4 (32:15):
Right, didn't quite go The Pulse didn't quite want to
go the same. Thank you both so much.
Speaker 1 (32:19):
For more from Wellington Mornings with Nick Mills, listen live
to news talks It'd Be Wellington from nine am weekdays,
or follow the podcast on iHeartRadio
You're listening to the Wellington Mornings podcast with Nick Mills
from news Talk.
Speaker 2 (00:11):
Said B.
Speaker 1 (00:13):
Monday's meaning Business. It's the business panel on Wellington Mornings
with Quardovic Property Management a better rental experience for all.
Visit Quardovic dot co dot insad.
Speaker 3 (00:23):
Let's get down, let's get down. Monnight mo night characters.
You've had a million million nights just slack persons, So
let's get down. Let's get down to persons.
Speaker 4 (00:39):
Join us for our business panel this week, and I
really enjoy this. Part of the show is Hospitality New
Zealand CEO Steve Armitage. Steve, welcome to the show. Good morning,
how how are you feeling a bit cold out there?
Speaker 5 (00:52):
It is bracing out there in the elements here, so
I've just found down from Auckland, so it's just as
cold up there. Day to be fair, but a bright
blue sky to compare with the gray's.
Speaker 4 (01:02):
Apparently supposed to lighten up. And we'll we'll. I'm going
to get into lots of conversation with you and Retail
New Zealand CEO Carolyn Younger. Morning Carolyn, what Nick?
Speaker 2 (01:11):
How are you doing?
Speaker 4 (01:12):
I'm doing great now. I walked down Lampton Key on Saturday,
and I thought about you. I thought, by god, you know,
I know personally how tough it is in my industry,
but I don't think i'd like to own a small
I don't think i'd like to be vance Vivian Right
now in Wellington there was just no traffic.
Speaker 2 (01:33):
It's really tough, right and when you've got me. We
had a particularly cold weekend with highs of five and
six degree wintil factors of about one percent, and it
doesn't entice people out, but you know, there are some factors.
Sometimes it's you know, you've got to pay for parking,
you know, being able to access into the city. It's
got to be easy for people to want to come in.
(01:54):
And we're doing that off the base where it used
to be free weekend parking and so people would come
into the city and they could park, and they could shop,
and they could go to lunch and have a great
time in the city. And all of those things feel
too hard. And I've had people telling me they spend
more time going out into the suburbs or going to
the malls because it's easier.
Speaker 4 (02:13):
Do you remember when Saturday mornings used to be an event?
Saturday morning of walking down you know, Queen Street or
Lampton Key with your parents used to be an event.
Go out and buy a new pair of jeans and it.
Speaker 2 (02:26):
Ages us a little bit. But I remember when shops
didn't open on the weekends.
Speaker 4 (02:31):
I want to talk about that. It's good. Yeah, but
I remember that too, But I was like four years old. Steve,
tell me, I mean you're at Auckland based, So is
it the same in Auckland as Wellington got its own
because everyone thinks that Wellington's got trials and tribulations on
their own.
Speaker 3 (02:47):
Yeah.
Speaker 5 (02:48):
I think for the last eighteen months to two years,
Wellington has borne the brunt of the commentary around the
struggles of hospitality very well traversed territory, around government cutbacks,
the reduced number of public servants and just the reduced
football in the city center here. But in recent times
Auckland has also started to find things. They're going pretty tough.
(03:10):
There's a huge amount of reliance on the CRL and
nz ICC convention center opening in Auckland, but ultimately they're
still lacking an incentive to get people into the city.
You need an occasion, you need events to stimulate that
foot traffic because as Carolyn's just touched on accessibility and
the cost to get into venues is increasingly difficult for people.
Speaker 4 (03:31):
Tell us right now, how you're feeling hospitality is what
sort of state is hospitality? It's only feels like yesterday
I was talking to Carry prender Gas on the show
Dame Carey prender Gas, when she was in charge of tourism.
She was telling me tourism hospitality was actually more of
an income earner in New Zealand.
Speaker 5 (03:52):
Dan Derey was well, that was the case. It's clearly
not at the moment, and there is a synergistic relationship
between tourism and hospitality. We are seeing ongoing struggles in
the hospital sect because those visited just haven't rebounded in
the way that we need them to. So the recovery
of the tourism sector does give me hope, because we're
still only a sort of eighty six eighty seven percent
(04:14):
of the capacity of tourists we had prior to COVID,
So as that number starts to incharpe, I think that'll
provide some relief to hospitality operators. But at the moment
we're heavily predisposed to the challenges that most households are
finding and that household income and the pressure that's on
that at the moment is meaning that that spend, that
(04:35):
luxury spend that people have for going out is just
isn't there.
Speaker 4 (04:39):
Carolyn, You'll be feeling exactly the same for retail or
I'm not going to put words in your mouth. I mean,
how is retail right now, right in the middle of winter.
Speaker 2 (04:46):
Yeah, it's dark, you know, it's really difficult. All kind
of Wellington are particularly challenging. There are some small areas
in the provinces governed by that rural factor that are
doing a little bit better, where the money from dareas
flowing back into their local environment. So that's holding some
businesses up in terms of those bass but largely we're
(05:09):
just hearing that sporadic trade where you know, one day
doesn't follow the other, and you know, it's just really
hard to get a sale and to be successful. We're
still seeing lots of businesses close and largely you know,
can't negotiate leases when they come up for annule, so
can't get it at a reasonable price. That with rates increases,
(05:32):
you know, the cost of payments, the cost of insurance.
People are saying we just can't see how we can
make ends meet and survive until things turn around. So,
you know, we had the thing in twenty twenty four
about you know, survived to twenty five, and now it's
all about surviving in twenty five. And I don't see
much light at the end of this year. It's going
(05:53):
to be next year before we start to see any
economic change. That's going to mean that households feel that
they can come into town and go out to lunch
and go into the stores and buy things.
Speaker 4 (06:03):
But we kept on telling it. Get being told that
second half of this year. Are you saying it's not
second half of this year.
Speaker 2 (06:09):
Look, we've got one more rates cut likely probably in
this reserve bank cycle. In this month. They're going to
do another, probably twenty five basis point cut. They have
signaled they're not looking at doing any further cuts for
the rest of the year. So where we're going to
get the stimulus. Consumer confidence is critical to both hospitality
and retail. Consumers are feeling uncomfortable about job security. If
(06:32):
you don't have job security, you're not going to go
out and purchase things. Mortgage rates are still high. The
cut that the Reserve Bank is going to do is
already bought into the priced into the mortgage rates at
the moment, is what we're being told. So just finding
out where is that relief for consumers. If we don't
get consumer confidence, businesses won't be able to turn around
(06:52):
and they won't survive.
Speaker 4 (06:53):
Through Steve Armitage, we were told over the weekend. Well,
I read over the weekend that we've been told. You know,
if Dairi's doing well, New Zealand's doing well, back off,
stop moaning about the price her butter because of dairies
doing well. Who cares? We're all doing well? Is that right?
As far as hospitality in New Zealand's concerned, Look.
Speaker 5 (07:14):
It's hard to it's hard to confirm that in a
general sense. I think if you look at the performance
of hospitality operators in the South Island you could certainly
make that link. Clearly. You know, their economy is heavily
predisposed to the agriculture sector. We're seeing strong performance on
the West Coast, We're seeing strong performance in Canterbury and
the lower South Island, so you'd have to say, you know,
(07:35):
you could draw a link between the two on that basis.
It's really the major centers Wellington and Auckland where the
going is the toughest. And I'm sure we'll get to
a discussion around this, but that that need to invest
in events to try and drive visitation is what's really
missing at the moment.
Speaker 4 (07:50):
Can I just ask you on the christ Church you know,
because everyone in hospitality is saying they're doing really well.
That is that because they are progressive and rebuilding city
as well as the farming. I mean they are. They've
got you universities doing well. Everything seems to be on
a high. And I'll come to you Carolyn on that too.
Is that something that we could look at and say, well,
christ you's doing okay?
Speaker 3 (08:11):
Yeah?
Speaker 5 (08:11):
I think so. Clearly they've had their challenges to overcome
over the of course the last ten to fifteen years,
but they're now making every post winner. The fact that
you've got a council and the council entity itself seems
to be really well joined up and clear on what
their vision is for the city. Every time I've gone
down there in recent times, I've been surprised with the
footfall and the positivity around the city center itself. And
(08:34):
then you throw on the likes of Takaha stadium coming
online and hopefully a program of events which we'll see
that really showcase the city. There's a lot of optimism
in around Canterbre at the.
Speaker 4 (08:44):
Moment, Carolyn, Are you hearing the same thing in retail?
Speaker 3 (08:47):
Yeah?
Speaker 2 (08:47):
Absolutely. Look and to Steve's point, they've gone through, you know,
ten to fifteen years of really difficult times and the
city is now beautiful right and largely rebuilt, and so
their pipes are all done and all of their infrastructure
work has done, which we can't say the same in
other major cities around the country. And they are still
(09:07):
supported by that dairy which is flowing and through. And
they did have an influx of people post COVID. Lots
of people from Auckland moved down to christ Church and
found opportunities there that they felt were better for them
and their family. After going through COVID, people had a
look at themselves and sort of determine what they wanted
to do next. So certainly it's more positive and buoyant
(09:30):
in christ Church than it is in other parts of
the country. And you know, Auckland is a really critical
part to the country, so dairy we can't say that
dairy is not important, but Auckland likewise, is also really
important because of the sheer size of the city and
the volume of the GDP that the percentage, it's something
like sixty percent of the GDP comes out of Auckland.
So if Auckland's depressed, they've got a higher level of
(09:50):
unemployment than the rest of the country on average, then
you know we're going to struggle as a country too.
And you ask individual people how they're doing, they're not
going to say they're doing great.
Speaker 4 (10:02):
Right now, business Panel today we have Steve Armitage and
Carolyn Great Carolyn right young, Sorry Carolyn changing your name
now State of the Economy. I want to talk a
little bit more about what you said was sir Carolyn
survived to twenty five. I honestly think we're going backwards.
What is your feeling, Well, I think.
Speaker 2 (10:23):
It's the compounding factor, right, It's that we've had a
long period of time where where businesses are really struggling
in New Zealand, and so if people aren't making a
profit and they're making a loss, it is compounding and so
it does feel like you're going backwards. The comparative numbers
retail cyclical, so we look at year on year numbers.
So if you look at July versus July twenty twenty four,
(10:45):
the numbers are there or thereabouts, but we're off a
really low base and it's been really challenging. So if
businesses weren't making money last year or the year before,
they're not making money this year. It does feel like
it's getting compoundingly worse. And sometimes there's additional factors that
come in that you have more of an impact on
businesses or just more on morale as well, around how
(11:07):
you can keep being buoyant in a tough environment.
Speaker 4 (11:10):
Well, you've got to love what you do, Steve, don't you.
Speaker 5 (11:12):
Yeah, Well, I think going backwards is how most households
feel that the narrative that's out there and the government
has been pushing it, is that with the interest rate cuts,
there's some additional spend coming into each household, a little
bit more discretionary expenditure, But of course the cost of
everything is going up at the same time at an
increased rate, So although you might be getting a few
more dollars in your pocket, that's going out again and
(11:33):
increased insurance premiums and other things. So most households, I
don't think buy into that narrative that the government has
been running around some additional headroom and your expenditure, because
it's just simply not the truth.
Speaker 4 (11:45):
But I mean in your industry too, hospitality, if they
look back on last year, they're going to probably I mean,
that's no point looking at those figures, like Carolyn said,
because they were tough. I mean, if you put your
figures from July twenty five to pre COVID July, what
would many of them say.
Speaker 5 (12:02):
Oh, yeah, there's no comparison. You're absolutely right. I mean
I do I have some hope, you know, And I
think it's really important that we don't just perpetuate this negativity,
right because part of why I think we have a
struggle getting young people to come into the sector is
because if you pick up the paper day to day,
all your reading is negative commentary around the current state
(12:22):
of the sector. So if I think forward, if I'm
looking at summer, you know, we know, as Carolyn's just
alluded to, with retail hospitality is very cyclical. Were expecting
to spend over that period from a domestic visitation point
of view, and with increasing connectivity to some of those
major international ports through more flights coming in a reasonable
(12:43):
cruise season and other things that gives me some comfort
that summer should be reasonably stable for most hospitality businesses.
Speaker 4 (12:49):
Can I both ask you both very quickly? I mean,
looking forward? What is the industry? What are your people?
What are your foot soldiers that own small retailers or
you know, what are your foot soldiers telling you? Karen?
Speaker 2 (13:01):
Look, The challenge I think is Steve outlined is some
of the ongoing expendits increases they've seen on things that
they can't control. When you look at insurances, leases, rates, wages, payments,
all of those things that's been really challenging. Businesses are
still inspired by the work they do, and they've still
you know, they have bought stock for summer and paid
(13:23):
for it already. You know, spring stock is arriving in
store already. Summer stock won't be far behind, so they
have to make it work. Businesses are really inspired and
how do they make it work? Because they know they've
paid for the stock and it's coming in, So they've
got to find a way to stay open, hopefully get
through summer and then the economy might have turned a
little bit more by then. We've got a launching pad
into next year. At some point we are going to
(13:45):
see that positivity turn around. And how prepared we're going
to be for that and what initiatives we're going to
have in place to ensure that we can continue to
thrive going forward will be really important.
Speaker 4 (13:56):
Steve, your industry are you seeing because we're not seeing
it in Wellington. We're seeing people buying old cafes and
putting a coat of paint and few tiles and changing
the name. But it's been a while since we've seen
a million dollar bill. I mean, and that you well
know was happening every week all over New Zealand.
Speaker 5 (14:14):
Yes it was, yeah, and there are there are still
instances of that happening in other parts of the country.
It's not the case here, yes, but there are certainly
some confidence in other areas and investment of reasonably significant
nature taking place. But you just come back to the
point around where things are sitting at the moment. I
think the recent announcement around the merchant fees and surcharge
(14:36):
right now that has a huge impact on the bottom
line of a lot of our members. Speaking to one
last week who say, you know, the cost and position
of having to absorb that into his business is around
ninety thousand dollars a year nineteen nine zero. Right, Wow,
the annualized profit for that business is one hundred and
thirty five if you're you know, that's a huge whack
(14:57):
out of the profitability of that business just through one decision,
which seemed to me to be very rushed. There was
a very little consultation about it. Convenient line publicly to
say this is going to help your pocket, but the
reality of that is really tough for business.
Speaker 4 (15:11):
And can I just ask you what the reality of
that transpires to?
Speaker 5 (15:16):
What's going It's going to mean that prices go up?
Speaker 4 (15:19):
Yeah, they can't absorb that, No they can't. How can
any business absorb? And it's retail as.
Speaker 2 (15:24):
Well, absolutely same, you know for a small retailer, and
it is really a play for small businesses because the
bigger guys have been able to negotiate better rates. We
know that forty percent of transactions that go through through
the switch are if posts and so they are free
of charge. But then that means that sixty percent of
the transactions that go through are not free and so
(15:44):
you know, the current legislations enables retail or a hospitality
business to recoup that through a surcharge and just removing
that point blank and saying that businesses have to absorb that.
It's not thinking through some of the repercussions, and there's
some unintended consequences in that we're going to see an
increase of contactless payments occur across the network, so more
(16:07):
funds and fees will go to banks and credit card companies,
and that will mean that less transactions go through the
FPOs switch, so a higher percentage of transactions will incur
a fee, so that that business that's incurring a ninety
percent a ninety thousand dollars fee now will probably rise
by between forty and sixty percent, So they're going to
(16:28):
go up to one hundred and thirty thousand dollars or more.
And what's going to happen is that they're going to
be in a break even space. So the only way
that businesses can small business especially can survive through that
is to change price, because that's the only lever they've got,
So it becomes an inflationary measure. And you know, we're
going to be lobbying really hard through the consultation process
and Select Committee to really make sure that government understands
(16:52):
the impact on small business and New Zealand is made
of smeeths. We've had a whole range of different people
outside of retail contact us. You know, from panel beaters
and mechanics and really small businesses that use payments as well,
but they're not viewed necessarily in hospital or retail, but
they are a merchant and so they understand the cost
(17:13):
that's happening and how it impacts their business.
Speaker 4 (17:16):
So right across in the business panel for our every
Second Monday, and we have Hospitality in New Zealand CEO
Steve Armitage and Retail New Zealand CEO Carolyn Young. Let's
talk about foot traffic. I'm going to come to you
Steve first, Well, n CBD foot traffic is nowhere near
pre COVID levels. How much do you reckon that is
(17:37):
directly hurting hospitality in retail? Now, if I want to
go out and buy a shirt, I'm going to drive
into town and I know where I want to buy it,
so I'm going to do it. If I want to
go out for a meal or a drink, I know
where I want to go. Is am I making it
too simplistic?
Speaker 1 (17:51):
No?
Speaker 5 (17:51):
You're not. No, but foot traffic is absolutely hurting our sector.
You can see it day to day just walking here.
You know that there just aren't people around to sustain
the businesses that their doors open at the moment. So
until we find a way to incentivize people to come
back on a regular basis, those businesses are going to
continue to find it tough. Now, Wellington, New Zealand and
(18:12):
other entities like it up and down the country. Part
of their remit is to incentivize visitors to come into
the region. The city center is a key part of that.
I have some sympathy for the likes of Wellington en
Z because due to cost pressures, councils have had to
put investment into other areas. Literally in Wellington the pipes
underneath our feet. It's meant that there's less funding going
(18:36):
towards the likes of a Wellington n Z to try
incentivize visitors to come into market. So that lack of events,
those lack of activations that you might have been accustomed
to in past times are certainly hurting in week to
week are meaning that we're just not getting the number
of people into the city that we'd like to during
the day.
Speaker 4 (18:53):
Carolyn, is there any more than we can do to
get people in.
Speaker 2 (18:57):
Look, it is really difficult right unless people are coming in.
We know that people's shopping head of its in retail
have changed, so their first porter call is generally looking
online and research online then coming into store. But if
you have more people working in the city, naturally they're
going to go down Empton Key. They'll be down Wallow Street,
they'll be along the terrace, they'll get a coffee, they'll
(19:17):
buy lunch, they'll see something in store and they'll come
back and they'll buy it. So if you're not here
and you're not flowing through, then you're not going to
have those purchases. So I do think it's important that
people get you know, that we get people back working
in the city and then it's about changing habits. People's
habits changed after COVID and they haven't come back out
(19:38):
as much as they have previously. So it is you
know what doll we do? You know, what are the
events that we can bring on. We know that Wellington
Visa Wellington on a Plate is on at the moment.
It's a great event. It's you know, one of the
largest hospitality events and around the Oceania region. It's a
really great thing. But what's next, what's going to bring
people out next month and the month after and the
(19:59):
month after that, because those things we know, WOWE is
really great for retail and it's probably good for hospital
as well. So really having that catalyst and that flow
of events across the city and needs to be replicated
across the country because events are really critical to bringing
people in, whether they're international tourist or domestic terrorists.
Speaker 5 (20:18):
We've advocated alongside other associations for some time now for
a form of accommodation levy to be introduced, so when
international domestic visitors are moving around, there's a small surcharge
on the bill which would raise a significant sum of
money that would be reinvested in the region that it's
generated in and it could go towards destination management destination marketing.
So provides a war chest if you like to be
(20:42):
able to invest in major events which the city is lacking.
Speaker 4 (20:45):
Right. Tell me about you both would have discussions with
both the councils and government. I mean, Steve, have you
mentioned have you had the discussion with government about trying
to get the government workers back working in the offices.
Speaker 5 (20:58):
Yep, Yeah, and when the announcement was made or some
eighteen months ago, now twelve months ago, specific to Wellington,
you know, public servants were going to be spending more
time in the city center. They were being instructed to
come back into work. You know, we welcomed that decision.
We thought it was an important statement by the government.
It hasn't resulted in a significant uplift and spent. I
(21:21):
don't know that the behavior is actually reflected in the
day to day realities of those of the ministries and
departments around Wellington.
Speaker 4 (21:27):
Carolyn for retail, is has it helped or is it hindering?
Speaker 2 (21:31):
Well, we haven't seen it uptick yet. And I think,
you know, the government is one part of that. And
then you know, you think of all the commercial businesses,
the law firms, their accounting firms that you know, every
other business, architect firms, you know everyone. We need all
of them to be coming into the city and to
be getting back to those habits that we had pre COVID.
Speaker 4 (21:48):
So, you know, is it a reality? Sorry to interrupt there,
but is it now just becoming I can hear our
listeners say, is that just now a reality? And that's
not going to be fixed?
Speaker 2 (21:58):
Not necessarily, if businesses see value in having their workers
in their in situe, being able to engage with each
other and work more efficiently and effectively, they'll encourage them
to come in. So I think it, you know, I
think it depends. It doesn't have to be that everybody
works from home. I think, you know, you can be
more efficient and effective if you're working in person.
Speaker 5 (22:20):
Yeah, I think culture suffers when you don't have your
people together on a regular basis. You can't build culture
through a screen, in my view, you have to have
people physically co located and getting to know one another
and understand that they know what purpose they're working towards.
So I think we've suffered as a result, and it's
one of the struggles that we have around our sector.
(22:41):
Holding on to talent is a real bugbear, and I
think you're finding young people in particular don't have that
sense of attachment because they're not used to in general sense,
they're not used to working as part of a team.
They're doing it remotely, and so as a result, they
don't see themselves investing in the long term, and a
lot of businesses that could be benefiting from retaining that talent.
Speaker 4 (23:02):
And could it change people's habits. I mean all three
of us grew up by going on a Friday night
to have a bear with your workmates and meet new
people and get out there and be part of life.
I mean we've all got probably lifetime friends that we
met at a pub that had nothing to do with
work or sport. Is that hurting us the one?
Speaker 3 (23:20):
In my view?
Speaker 5 (23:21):
Yeah, Like I say, I think culture is critically important.
Speaker 4 (23:24):
Now.
Speaker 5 (23:24):
It doesn't mean you always have to be having a
drink in your hand to build culture, but the opportunity
to socialize and get to know one another, understand what
makes each other tick, how you can get the best
out of somebody just through a conversation. I think is
lost when you're doing it arbitrarily through a screen and
you've got to fix time for a meeting.
Speaker 2 (23:41):
And look, things happen organically right in an organization. So
those organic conversations and you know, it's the water cooler conversation,
right that you wouldn't have found out something like oh wow,
I didn't know that you did that. Oh we must
connect up because I'm doing a piece of work and
I think it aligns with what you're doing. I better
make sure that I've covered off what you need to
have at your end as well as what's happening with
other people. So you know, being in the office provides
(24:04):
those opportunities and that just gives sustainability to cities and
we can all thrive rather than the struggles that everybody
seems to be heaving at the moment.
Speaker 4 (24:15):
Business Panel with Steve Armitage and Carolyn Gray. Can I
just ask you Steve, firstly, you probably saw the front
page article in the Post on the weekend about how
difficult Wellington City councils making it for liquor licensing in
this city. Can I give you an example. We have
a little room at a restaurant, a little little area
at the back of our restaurant's a bar, private bar,
(24:36):
and we wanted to change the side door of it
to allow people to go in the door. They have
to come through three and a half thousand dollars to
do an amendment to a license to change an entrance
to a doorway.
Speaker 5 (24:48):
Yeah. Look, this issue routinely comes up, but there's no
question Wellington has been the loudest in terms of the
cost impact for business and a sense that there is
a slightly different view being taken by those involved parties
here the relative to other parts of the country. So
we've provided a to regular examples of businesses that operate
(25:09):
in Auckland and Wellington other parts of the country. They're
putting in the same information. They're getting their license in Auckland,
but there's hurdles that have been put in front of
them in Wellington. And then you've got the cost of
friendship too. You know, it's more expensive annual need to
get a license here in Wellington that it is in Auckland.
Speaker 4 (25:25):
So I'm not sure that you know. But if you're
going to go for a four o'clock license in Willington
now they just put the price up to ten thousand dollars.
Speaker 5 (25:31):
So we've asked the Minister to look into this. We're
hoping that we're going to be put in front of
the Ministry of Regulations for an opportunity for this to
be looked at in detail. That what we would like
to see is just some consistency. It shouldn't have regional variation.
Speaker 4 (25:45):
Are you hearing the same caarent Are you hearing that
your people in retail are having more difficulties with Wellington
City Council than anywhere else in the country.
Speaker 2 (25:52):
And not specifically. No, we know that the RMA is
a really big challenge and it's a really big barrier
to opening news stores, and it just puts lots of hurdles,
cost time, and you know, people consider whether or not
it's valuable. So RMA is a big barrier to entering
(26:13):
the marketplace that we haven't heard that there's a differential
in terms of Wellington City Council.
Speaker 4 (26:17):
Okay, let's talk unemployment. The unimble employment rate came out
last week. It's now five point two percent, with many people,
especially young people, especially young people out of work. Steve,
are you seeing this in hospitality? What's the vibe like
about getting young people to work?
Speaker 5 (26:32):
Well, there are certainly jobs available in hospitality. If I
go up and down the country, Look, there are vacancies there.
What I think is part of the problem is that
there is an expectation amongst young people that they should
be working at a particular level and earning a particular amount.
There's not so much of a responsibility on them to
prove their stripes, to get to know a business and
work your way up. So I think there's this mismatch
(26:55):
between people's expectations and the reality of starting and forging
a career. That's something that we need to overcome. Perception
is also a challenge for us in hospital You know,
we've talked earlier about the fact that if you're opening
up the paper and you're reading negative headlines all the time,
it's a hard ass to try to sell that when
businesses are doing it particularly tough and you don't know
(27:16):
if the business is going to be there in the
long run. But also parents, you know, I think there's
some responsibility there. Hospitality has looked at as a as
a brief stop on the way towards doing something different. Now,
I think hospitality can be a hugely rewarding business career
for people. It can take you all around the world.
It can take you into business management, ownership and so on.
(27:37):
And we don't see it celebrated in the same way
that you do in the Northern Hemisphere, where people work
in hospitality and are still waiting status well into their seventies.
But we just don't treat it the same way. Yeah.
Speaker 4 (27:46):
Same with retail, isn't it, Karen.
Speaker 2 (27:48):
Yeah, Look, perception of working in retail is the same.
It's not great and one of the things that we
know that working in retail can do. Look, everyone has
to start at the beginning, and the beginning is often
the shop floor, so most people don't start higher up,
especially when you're young. Right as you say, you've got
to earn your stripes. But the thing about working in retail,
sure it's similar in hospitality, is that if you're enthusiastic goods,
(28:10):
you're a quick learner. You you know, you turn up,
you do all of those sorts of things. Acceleration through
to leadership happens really quickly in retail, and there's really
a lot of opportunities. And then secondly in retail, you know,
some of the bigger operators, you can do almost anything.
You know, you could be a buyer. You could be
buying things internationally. You could be doing marketing, you could
(28:32):
be doing health and safety, you could be doing technology.
There's a whole range of things, and it's not a
linear start at this point and finish at that point.
You can go, you know, you can transverse a whole
range of different things in retail. And we've got a
really interesting program that we're doing seven jobs and seven
days in TikTok So for young ones. Have a look
at it. It's a really great way in which you
(28:53):
can see what retail could look like if you're young.
Speaker 4 (28:55):
And you know, the other thing for both your industries
or our industries is social media. I mean, you know,
so the growth of social media. I know hospitality has
been quite slow to pick up on it. It's massive now,
same with retail. I mean for young people, they're so
damn good at it.
Speaker 2 (29:12):
Night yeah, I mean there's lots of skills that young
people are really amazing at, but just widening their thought
around what a job and a career in retail could
look like as the key thing. And making sure that
people don't think that your job has to start and
stop on the shop floor. There's so many more things
that you can do.
Speaker 4 (29:29):
Okay, As we wrap the business panel up, we ask
our guests what they would do to I don't know
if Steve, if you had to meet someone and go
out for lunch or dinner or do something in Wellington.
I mean, you are an ex Wellingtonian, but your CEO
of hospitality in New Zealand, you want to really impress someone,
what are you going to do?
Speaker 5 (29:48):
I'm going to avoid that because I can't afford to
pick a membo over another, right, I am an outdoors
kind of guy. I really enjoy Wellington on a good day,
don't we all? But I quite like going around the
fort battlements, up around Merryma pinentually there Scorching Bay. Have
to take my daughter there. We haven't had a chance
to do that yet. It's certainly a high my agenda
(30:10):
to do take around there.
Speaker 4 (30:11):
Do you still enjoy Wellington? When you come to Wellington?
You come here very very often. It's not like you're
a stranger. Do you still enjoy it?
Speaker 5 (30:19):
Wellington is different to the rest of the country. I
particularly enjoy Wellington during the summer months. I love walking
around the waterfront. I like feeling connected to decision making
down here. I would like to see more of that
decision making rather than obfuscation. But no, I do enjoy Wellington.
I enjoyed living here for a period of time, but
Auckland was always calling me back home for family reasons.
Speaker 4 (30:41):
Okay, Carolyn Young, you looked as much as shock as
I did over that. It wasn't a great shining example
of great Walingtonia. But you are a WALIINGTONI what are
you going to do with that special person you pick
up at at the airport tomorrow.
Speaker 2 (30:54):
So what we do is we'd swing by Cava Ice
pick up a coffee. They are really great. They give
you a discount if you've got a takeaway cup, so
view at your own cup. So we'd go in there,
get a coffee. We'd go up, we'd high cup Mount
kalkau to you know, actually see the whole traverse everything.
We love that walk down there. When we come down,
we would stopping at Dunchee's Delly for lunch, so Craig
(31:17):
would look after us, have great food there, and then
we'd go into the Candala CBD. You go and see
Sheila at Hamilton Monnett Murray. You'd go into TP and
you go into Gubs Shoes and then probably pick up
some flowers from the local candalad area on the way out.
Speaker 4 (31:30):
You're a Candala girl. Craig dun Share, that's a name
that from the past. That's the old neo cafe guy,
isn't it. He used to play lock for Wellington Rugby.
You lot more information. I should be a talk back coach,
didn't I.
Speaker 2 (31:43):
Hospitality ask him for the recipe for that? Karen was slice.
Speaker 4 (31:46):
Okay, I'd never been up there. But I will definitely
now that I know that he runs. I've never even
heard of it before. Hospitality in New Zealand CEO Steve
mahmat To take you and thank you for everything you've
done for Hospitality New Zealand and your role there. I
know you're moving on.
Speaker 5 (31:58):
Thank you.
Speaker 4 (31:59):
You spoke too soon about my voice, Carolyn, so I
appreciate and good luck on your new job at Sailing
New Zealand. Thank you always good to catch up. Bols
didn't do that well this year Today, Carol Young's and
x CEO of The Pulse.
Speaker 2 (32:12):
They made the playoffs. Still a good start.
Speaker 4 (32:15):
Right, didn't quite go The Pulse didn't quite want to
go the same. Thank you both so much.
Speaker 1 (32:19):
For more from Wellington Mornings with Nick Mills, listen live
to news talks It'd Be Wellington from nine am weekdays,
or follow the podcast on iHeartRadio
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