Christchurch Hospitality Sector Sees 7% Spending Increase

Spending on food services and commercial accommodation in Christchurch surged by 7% in August compared to the same month last year, indicating a potential easing of financial pressures on the hospitality sector. According to Hospitality New Zealand, this increase reflects a growing confidence among consumers who appear more willing to spend on local dining and accommodation options.

Positive Trends and Local Confidence

Interim Chief Executive Nick Keene noted that Christchurch’s rise in hospitality spending is one of the highest nationwide. He expressed optimism, stating, “It’s great to see the passion for the industry remains.” The number of hospitality businesses in the region, encompassing both accommodation and food services, increased by 1.5% compared to last year, further supporting the notion that local households are regaining confidence in their financial situations.

While closures of hospitality venues have been more visible, Keene pointed out that new establishments continue to open, suggesting a dynamic environment. “The pressures on tourism and hospitality of the past few years have seen a number of owners exit the industry, and some consolidation of business groups,” he explained. Despite ongoing economic challenges, he noted that the situation is stabilizing, although owners are still cautious about future investments and growth.

Future Prospects and Challenges

Looking ahead, leaders in the industry, such as Jeremy Stevens, President of the Canterbury branch of Hospitality NZ, anticipate increased spending in the coming year. The opening of the new metro sports centre and the upcoming 30,000-seat indoor stadium, known as Te Kaha, are expected to attract more visitors to the city, boosting accommodation and central city traffic. Additionally, a significant redevelopment project is underway, with a $150 million investment transforming the former Rydges Hotel into a five-star Sheraton Hotel, which has remained vacant since the earthquakes.

Despite these positive indicators, Keene cautioned that cost pressures continue to challenge hospitality businesses. Rising rents, electricity, and gas costs, along with increasing prices for goods, place additional burdens on owners striving to maintain affordability for customers. “Outlets are still in a balancing act between covering costs and preventing pushing prices up too high,” he noted.

While farmers may be benefiting from rising agricultural prices, this does not necessarily translate to a willingness among consumers to pay more for their meals. Keene emphasized that although there is more cash in circulation, it does not guarantee that the broader customer base will accept higher prices for their preferred dishes.

Overall, the state of the hospitality sector remains mixed, with some areas thriving while others continue to struggle. Keene remains cautiously optimistic about the outlook for the industry, hoping to see an uptick in tourism numbers as the year progresses. In addition, motel owners report a decrease in available motels on the market, suggesting a tightening of accommodation options as demand begins to recover.