After a tough few years for New Zealand as a whole, we asked executives in the Kiwi alcoholic beverage industry share their insights and predictions for the year ahead. This series will include several columns in the coming weeks.
Matt Wilson – Managing Director, DB Breweries
The chains are officially off. The borders are open. The patrons are back in the pubs. Big events are humming, and the sun is shining (well, as much as La Niña will allow). Hospitality is core to how we build brands in the liquor industry, and after several years of suffering thanks to COVID-19, I’m predicting that hospitality is due for some brighter times in 2023.
Despite the roadblocks COVID-19 presented, and ongoing challenges with staffing, the hospitality industry has bounced back stronger than expected and has now returned to pre-COVID levels.
A Restaurant Association Hospitality Report released recently showed that New Zealand’s hospitality sector achieved record sales of over $13.38 billion for the year ending September 2022. This represents a significant net 10.75% increase on pre-pandemic revenue. This is set to be doubly boosted as more visitors return to our shores.
Since our borders fully opened in August 2022, overseas tourists have been happily swarming back. Stats NZ figures show an encouraging recovery with 161,631 visitors in October 2022 (57% of the pre-COVID-19 number). This is a huge improvement on the near-zero numbers when the borders were bolted shut. Tourist hospitality spend is also higher when the Kiwi dollar is trading lower and there is a close correlation between the strength of our dollar and the average spend by visitors.
I’m also encouraged by the impressive events New Zealand has been hosting, with a list of big-name international musicians and world-class sports games pulling sizeable crowds over the last few months. I predict that this will continue into 2023. Specifically, the ASB Classic tennis tournament kicked off the year in style, and the inaugural New Zealand Sail Grand Prix lined up for March sold out in just 24 hours. We’ve also got the FIFA Women’s World Cup 2023 that we are jointly hosting (with Australia) to look forward to, which is forecast to attract 25,000 international visitors and deliver nearly $200 million into the New Zealand economy.
Despite an uncertain economic outlook for 2023 and talk of a recession, I’m confident that while Kiwis are likely to curb retail spending, they will use more of their discretionary spending in hospitality as they look to connect with friends and family. We know that social interaction and connection is even more important in tough times. Businesses like ours are at the centre of good times, and hospitality related businesses have a really important role to play in bringing people together.
So, gloomy economic (and weather) forecasts aside, I’m predicting clear skies for hospo in 2023.
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