Key Takeaways
- Wellington’s hospitality sector has been facing challenging conditions due to reduced discretionary spend, remote work, and rising operational costs.
- Despite closures, new hospitality businesses are opening, and others are rebranding or reinventing themselves to fit changing trends and consumer preferences.
- The number of accommodation and food service businesses in Wellington has increased by 14% since pre-Covid times.
- The economic outlook for Wellington’s hospitality sector is one of cautious optimism, with anecdotal evidence suggesting a positive summer trade and vibrancy in the city.
Introduction to Wellington’s Hospitality Challenges
The Wellington hospitality sector has been facing significant challenges in recent years, with several high-profile closures making headlines. Scott, a veteran of the industry, closed the doors to Avida Bar in May last year, citing the worst conditions he’d seen in hospitality in Wellington since becoming involved in the area in 1987. This was followed by the closure of brewery, restaurant, and pub Whistling Sisters in January 2024, which was opened in 2018 in memory of his daughter Karen. The Herald has reached out to Scott for comment on the closures, but he has yet to respond.
Factors Contributing to the Challenges
According to Hospitality New Zealand chief executive Kristy Phillips, the challenges facing Wellington’s hospitality sector are due to a combination of factors. These include reduced discretionary spend, the shift to remote work resulting in reduced CBD foot traffic, ongoing roadworks, and rising operational costs. These factors have created a perfect storm that has made it difficult for hospitality businesses to operate profitably. Phillips noted that while trading conditions remain tough, there are signs of cautious optimism, with new businesses opening and others looking to rebrand or reinvent themselves to fit changing trends and consumer preferences.
Closures and Their Impact
The closures of Avida Bar and Whistling Sisters are not isolated incidents. Other popular Wellington establishments, such as Fortune Favours, Plonk, and Caffeinated Dragon Games, have also fallen victim to the economic crunch. Fortune Favours, a popular pub, closed its brew bar after nearly a decade, citing financial unsustainability. The owners, Shannon Thorpe and Dale Cooper, stated that the cost of living crisis had proven too difficult to navigate, with the business down 20% on the previous year, which was already 25% down on the year before. These closures have not only affected the businesses themselves but also the wider community, with many patrons and staff left disappointed and concerned about the future of Wellington’s hospitality sector.
Signs of Optimism
Despite the challenges and closures, there are signs of optimism in Wellington’s hospitality sector. Phillips noted that the number of accommodation and food service businesses in Wellington has increased by 14% since pre-Covid times. This suggests that there is still confidence in the capital’s hospitality sector, and that new businesses are willing to take the risk and invest in the city. Additionally, anecdotal commentary from Hospitality New Zealand members suggests that the summer trade has been positive, with clear evidence of vibrancy in Wellington. This is a positive sign for the sector, indicating that despite the challenges, there is still a strong demand for hospitality services in the city.
Conclusion and Future Outlook
In conclusion, Wellington’s hospitality sector has been facing significant challenges in recent years, with several high-profile closures making headlines. However, despite these challenges, there are signs of cautious optimism, with new businesses opening and others looking to rebrand or reinvent themselves. The economic outlook for the sector is one of cautious optimism, with anecdotal evidence suggesting a positive summer trade and vibrancy in the city. As the sector continues to evolve and adapt to changing trends and consumer preferences, it is likely that we will see a resurgence in Wellington’s hospitality sector, with new and innovative businesses emerging to meet the demands of the city’s residents and visitors.