How staff shortages and restrictions are hampering hospitality's recovery

Over half of hospitality venue owners are concerned by the rising cost of staff salaries as they struggle to find employees to fill key roles, according to a new study by Deliveroo.

The Deliveroo HospoVitality Index Report found almost two-thirds of restaurant owners (65 per cent) feel that the introduction of a new wage subsidy to help cover the costs of employees would be the most important initiative the government could introduce to help address rising cost pressures.

With a high reliance on overseas talent to fill critical roles, the hospitality sector has been one of the hardest hit by staff shortages during the pandemic. Unsurprisingly, the majority (92 per cent) of hospitality businesses plan to recruit staff in 2022. With international borders reopening, almost nine in ten (85 per cent) of those surveyed said they would support the introduction of specialist hospitality visas for overseas migrants to help bring their skills into the country.

Mental health impacted by pandemic

While small businesses were particularly hard hit by lockdowns and restrictions during the pandemic, the hospitality sector has really felt the brunt. The HospoVitality Report revealed more than half of Australian hospitality business owners said that COVID-19 has impacted their personal mental health (51 per cent), with rates even higher in both Victoria (53 per cent) and NSW (54 per cent).

As most states continue to lift remaining hospitality and venue capacity limits, and most domestic and international border restrictions progressively ease, just over half of restaurants (52 per cent) say they feel positive about the future of the hospitality sector in Australia, up from 46 per cent in June 2021. A fifth of restaurants feel negative about the sector (20 per cent).

Ed McManus, CEO of Deliveroo Australia said Deliveroo is calling on the government to put the hospitality sector front and centre in its election promises as we move into an election this year.

“We’re heading into what looks like another challenging year for Australian restaurant owners. With the advent of Omicron denting consumer confidence to go out, despite more relaxed government regulations, we are again seeing restaurants being hit.

“This is in addition to the significant cost pressures with the skilled worker shortage leading to record wages. Given the continuing uncertainty and the strong headwinds, it is no wonder restaurant owners are reporting their own mental health concerns,” McManus said.

City hospitality businesses worst hit by the pandemic

McManus said some of the businesses worst impacted by the pandemic are in the nation’s largest cities. As Central Business Districts became ghost towns, restaurants, cafes and bars were impacted. With foot traffic yet to return to many of these areas, thousands of hospitality businesses are still doing it tough.

Business confidence amongst this cohort is split. 50 per cent of restaurant owners feel positive about their prospects, up slightly from 46 per cent in July 2021. However, more restaurant owners are neutral about their business prospects than previous reports (38 per cent vs 34 per cent in July 2021), suggesting they are waiting to see what 2022 has in store for their business activities.

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