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Staff shortages hit Queenstown’s struggling hospitality sector

A perfect storm, which has been intensifying for two years, is expected to hit one of Queenstown’s hardest hit areas next month. Photo/Getty Images

A perfect storm, which has been intensifying for two years, is expected to hit one of Queenstown’s hardest hit areas next month.

The resort’s hotel sector faces its worst crisis as international visitors finally return.

Already desperately clinging to overworked staff, many operators will have to pay unsustainable hourly rates to migrant labor to keep businesses open.

And, in a double whammy, they risk losing existing staff the minute they qualify for Kiwi residency.

There is evidence that the station is already suffering.

Restaurants are limiting their opening hours and days, and often their menus, while some hotels tell guests they won’t be able to clean their rooms — and offer incentives to discourage daily housekeeping — during stays.

For many operators, having to pay $27.76 an hour for entry-level staff can be the straw that breaks the camel’s back.

Naturally, the government wants employers to hire Kiwis, but despite constant publicity, it’s been proven time and time again that they don’t want to come here, almost regardless of pay rates.

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As Darelle Jenkins, Regional Manager of Hospitality New Zealand Queenstown says, there are currently more vacancies in Queenstown than there are tax payers here.

Novotel hotelier Jim Moore says it’s hard enough to attract Kiwis to his chain’s hotels near major centers, “so getting them here where they’re away from their families and where accommodation is a bit more expensive, it’s a bit of a challenge”.

Without the Kiwis, the industry has been told it can rely on Working Holiday visa holders to fill entry-level jobs like waiters and kitchen helpers.

But that doesn’t work either.

Hospitality NZ chief executive Julie White revealed last week that while 18,000 people had their working holiday visas renewed, only around 73 entered the country.

And of those who have obtained new visas since March 24, only 142 have arrived, she says.

Chris Ehmann, general manager of the Hilton Queenstown.  Photo / Mountain scene
Chris Ehmann, general manager of the Hilton Queenstown. Photo / Mountain scene

The problem, according to Hilton hotelier Chris Ehmann, is that you don’t know if and when they’ll arrive or what job they’ll do next.

And, as the visas are valid for 12 months, there is little chance of perfecting them.

Ultimately, this will lead to staffing shortages at all levels given the drying up of the career progression pipeline.

Transition period required

For entry-level positions, employers from July 4 could be forced to hire non-Kiwis on ‘accredited employer work visas’, which means paying them the New Zealand median salary of 27, $76 per hour.

Ehmann says existing staff paid less should, in fairness, be increased at that rate as well.

“Many small private businesses that have invested their savings to survive Covid will find this new environment financially unsustainable.”

Millbrook hotelier Brian Howie, former regional president of the hospitality industry, said “we cannot reasonably pay $58,000 a year for entry-level positions.”

Brian Howie, Hotelier of Millbrook.  Photo / Mountain scene
Brian Howie, Hotelier of Millbrook. Photo / Mountain scene

“It’s just nonsense for businesses.

“The timing, coming out of a period where companies have been hanging on, is just plain wrong.”

His industry, he says, “is doing its best to pay higher wages, but we need a transition period before that is introduced”.

Having only learned of the existence of this new rate in March, “we had very little time to consult the government, lobby or talk to them”.

White also calls for “a bridging program.”

Hospo has done the hardest part with Covid, she says.

“We’ve been the most closed, had the highest restrictions on health measures, we’ve had no targeted support, and now we’re still not getting any support or help to recover.”

She says the industry is working on developing a Kiwi workforce, “but you literally can’t develop a chef overnight, it’s going to take time”>

Ehmann predicts that hotels this winter will have to continue to restrict occupancy because they won’t have enough staff.

Rather than increasing service levels, as the government hopes, “it just means we end up having fewer staff per customer, because you can’t afford that,” Moore said.

He, like Ehmann, suggests that room rates will have to rise.

As restaurateurs also grapple with this new median rate, The Meat Preachers co-owner Nicolas Karlsson suggests “restaurant prices are going to get ridiculous”.

– Mountain Scene

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