Omicron worse than lockdown for Sydney, Melbourne restaurants

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He thought the end of lockdowns would be a good thing – instead, it’s left him and thousands of others struggling to survive.

Aussie restaurant owners have been hit so hard by issues created by the surge in Covid cases that going into lockdown would have actually been better for business.

With Australia’s two biggest states, NSW and Victoria, recording more than 40,000 new coronavirus cases each on their worst days so far, the hospitality and events sector are struggling to stay afloat.

Restaurant bosses say that the combination of supply chain issues, staff shortages, hesitant customers and non-existent government support has left them in worse financial straits than ever before.

It also comes as ANZ research found that Australians have been spending money at record lows in the past week, down to levels last seen during the Delta-prompted lockdowns in 2021.

Sydney restaurateur David Bitton said despite enduring two years of the pandemic, he has never seen a worse time.

His three restaurants called Bitton based in the Sydney suburbs of Alexandria, Rose Bay and Oatley have been racking up huge losses with the French bistros losing $100,000 a week since December.

Despite “bleeding money” for the past two years, Mr Bitton said it had been manageable as everyone was in the same position and government support had been provided.

But with Omicron causing chaos he isn’t sure what is going to happen.

“For the first time in 22 years I don’t know where we are going and what the future is going to look like,” he told news.com.au.

“They are saying Omicron is going to wear off in two or three weeks but we have already been through three weeks of it. We are not Microsoft or Tesla, we are a small business so we don’t have the support of big corporations, so I’m not too sure what the future looks like.”

December was meant to be one of the busiest times for the hospitality industry and Mr Bitton was gearing up for people to spend up big but the reality was “scary”, he said.

“There were cash flow rich people as they have been stuck at home and instead of spending $50 or $60 on a bottle of wine they are willing to spend $90 and instead of a two course meal they would get a three course meal and lots of people were spoiling themselves,” he said.

“I was excited and thought we were going to kill it and we had plenty of bookings and then Omicron started. Everyone was cancelling and we had dinner cancellations for 18 people and it’s $150 a head – it’s big money — and everyone was cancelling functions, all the big banks and corporations were cancelling their Christmas party and we had nobody eating with us.

“Then we opened in 2022 and no one is coming out and we are still paying full rent, full wages, full super and the money is still coming out.”

The 53-year-old said he has been forced to shut down his restaurants in the evenings – no longer offering a dinner service as staff shortages bite, with around a dozen employees infected with Covid or isolating as close contacts, while customers are also too afraid to come out.

“We are usually open for dinner four nights a week from Wednesday to Saturday in Rose Bay and Alexandria, but at night time I don’t have enough staff to operate and I have to cut my losses and minimise the damage until people are confident to spend money,” he revealed.

Mr Bitton wonders how Australia went from just 2000 cases over two years to hundreds of infections in the space of few weeks, despite people making huge sacrifices with lockdowns and closed borders.

He’s also frustrated by all the attention around the Novak Djokovic saga when small businesses are suffering.

“It’s just crazy and it’s just very frustrating and you go home and you’re exhausted as you don’t know what’s going to happen tomorrow,” he said. “If there are 40,000 or 50,000 cases how can we expect to inspire confidence?”

Facing bankruptcy

Melbourne restaurateur Paul Kasteel is all too aware of the dire impacts the Omicron wave has had on his business of 16 years, Miss Kuku, located along the city’s iconic Chapel St.

“It’s terrible,” he told news.com.au over the phone in his spare room where he is isolating with Covid-19.

“It’s like a Clayton’s lockdown. The impact has been worse [than a real lockdown].

“The problem with this virus is you get a couple of hours notice, then you’ve got no staff.”

In fact, the restaurant hasn’t been able to open for the entire year as Covid-19 tore through Mr Kasteel’s workforce sending them all into isolation, himself included.

His head chef went on a camping trip and returned unable to taste toothpaste or strawberries. She soon learned she was positive with Covid-19.

The disease then ripped through staff.

“By the next day I had so many staff that were symptomatic, we made the decision to cancel our reopening for the weekend,” the restaurateur said.

The situation is made even more dire because since there is no official lockdown, there is also no government help for struggling businesses.

“They give us money when they’re locking down but they don’t define restrictions as a lockdown,” Mr Kasteel said. “Because it’s not a lockdown they haven’t announced any support.”

During Victoria’s 112-day lockdown in 2020 as well as the state’s 2.5 months of lockdown last year, Mr Kasteel received $10,000 a week as part of the Victorian government’s Licensed Hospitality Venue Fund.

This time around, he isn’t entitled to a cent, since there is no official lockdown.

Staff forced to isolate qualify for the Covid-19 disaster payments — but they can only receive that if they’ve used up all their sick leave, which Mr Kasteel has to pay.

“Most businesses would have a contingency plan if a few people are sick at the same time, but what happens when everyone is sick and you have no revenue?” he asked.

This Friday, the Victorian government’s rent relief package comes to an end, meaning Mr Kasteel will have to pay the full rent even though his revenue is literally zero.

The venue costs $1500 a week and up until now his landlord has been kind enough to only make him pay 20 per cent upfront due to the rental protections in place.

He doesn’t know how he’ll afford the full price now.

“If we end up bankrupt, we end up bankrupt,” he said.

‘Better off financially if we went back into lockdown’

Mr Kasteel is one of many Chapel Street operators hurting, where approximately 35 per cent of staff employed by the precinct’s 2200 businesses have had or currently have Covid.

Chrissie Maus, general manager of the iconic precinct who is currently isolating with Covid, said it has created “harrowing” consequences for businesses, with some not even opening their doors since Christmas.

She has called on the government to focus urgent attention on business support packages rather than being distracted by its “poor handling” of the Novak Djokovic situation.

“Novax Djokovic has created the perfect distraction for Dan Andrews and Scott Morrison. It means nowhere near enough attention is being focused on the absolute decimation of small businesses,” she said.

“One of our largest traders advised us that on Greville Street in Prahran alone – 100 per cent of all businesses have been adversely affected.”

Chapel Street precinct executive chairperson, Justin O’Donnell, added business owners are working seven days a week as well as double shifts just to cover staff who are not allowed to work.

“Practically every single one of our businesses would be better off financially if we went back into lockdown and given the minimal lockdown government cash support – that’s how slaughtered our poor businesses owners are feeling,” he said.

‘Start a fight with a tennis player’ as a distraction

Over in Queensland, where cases have surged to over 20,000 a day, restaurant owner Cale Drouin, said mixed messages between the state and federal governments means people aren’t going out, while he has also struggled to find staff on as they go down with Covid infections.

Its forced his plant-based Brisbane restaurant Yavanna to go back into an “almost self-imposed lockdown” as he shut down the dine in option this week because it’s currently not “viable” to run. Instead he has reverted to takeaway and home delivery only.

He said the restaurant has lost $10,000 in the last week alone and described Sunday as one of the “worst days they have ever had” with only four customers at lunch and a few more for dinner when they are usually serving 100 people a night.

Wages were also double the cost of what he made on the night, he added.

“We either have not enough staff or not enough customers and the reality is as Omicron grows and more and more people are in isolation than less people will be going out to dinner and the rest are nervous about going out at the best of times,” he said.

“It really feels like the start of pandemic again … but without any support to try and weather the storm and keep staff employed.”

Mr Drouin said he is furious that the “federal government has just decided to check out and wait and see what happens”, rather than helping business owners through the crisis.

“They have start a fight with a famous tennis player to do a bit of misdirection and it’s a waste of time when there are far more important things to talks about than whether someone should have a visa to play tennis,” he said.

“The reality is government will give support only after the noise gets so loud they have to, but there is nothing about forward planning and the resume of this current federal government is to react after it happens.”

The 41-year-old is predicting a “brain drain” from hospitality as exhausted workers flee the industry and said the restaurant options available are going to be dire if businesses don’t get help.

He added the current situation is “demoralising”.

“When we first went into Covid and had government support, it felt like we were all in this together and we could keep on staff and we weren’t making any money but we were surviving,” he said.

“Right now it feels like we are left on our own and the situation will be to see who’s left standing at the end of this and it’s a shame as what it is going to mean is the restaurant industry will be a lot different.

“A lot of businesses will go under and lot of people will leave the industry and hospitality is a thriving world and it’s is an important part of our culture.”

Losing $200,000 every week

Events have also taken a hit in Sydney. Doltone House executive chairman Paul Signorelli, who runs six function centres across Sydney, estimated that his business is losing $200,000 every week due to staff shortages and booking cancellations.

“And that’s a very conservative estimate,” he told news.com.au.

“I call this a handbrake lockdown. While you’re driving the handbrake is pulled, you’re basically coming to a stop.”

Of Mr Signorelli’s 350 staff members, more than half of them have caught Covid-19 or have had to isolate for being close contacts in the first 12 days of January.

Omicron also ruined their busiest time of year — the Christmas and New Year period — where the event company was hoping to recoup most of its losses sustained during Sydney’s 106-day lockdown.

Instead, Doltone House’s cash flow is the lowest it’s ever been.

“Our revenue is probably 80 per cent down from pre-Covid,” Mr Signorelli said.

It’s worth noting that businesses who experienced a 70 per cent reduction in turnover during lockdown were eligible for thousands of dollars in government support.

“Those are big numbers, that’s a big drop,” the hospitality boss continued. “If I look at January 2019 figures vs January 2022, it’s like a bombshell … This is like World War II at crisis.”

Last minute restrictions further bite

Meanwhile, Mr Kasteel was also dealt a double whammy when Victorian Premier Daniel Andrews announced dance floors had to close down and that the one customer for every two square metres had to be abided by in hospitality settings.

“I saw a dramatic drop in email inquiries and online bookings. When they [the government] announced the one in two square metre restrictions, bookings were trickling through but then they just stopped. Dance floor closure was pretty immediate,” he explained.

“Normally I’d have 100-200 covers [people] booked in, I now have about 15, I had about 70 people cancel.”

In some instances, this was the fifth time the customer had to cancel on him because of Covid-19.

Ms Maus was also critical of the dance floor closures.

“When you consider so many vaccinated people aged 18-35 caught Covid over Christmas and have now fully recovered, why can’t dance floors open to people who can prove their Covid (Post-Positive) status,” she argued.

“Thousands, if not tens of thousands, would be allowed to party and help these venues stay afloat.”

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