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Hospitality calls for help over post-lockdown customer limit

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Several cafes and restaurants are opting to stay closed this week, saying it’s not viable to reopen under strict density restrictions – as the hospitality industry clamours for targeted government support.

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Chris Reid runs Salted Café in West Lakes, which will not reopen its doors until early next month, citing ongoing restrictions post-lockdown limiting venues to one person per four square metres – effectively 25 per cent of capacity.

“For me, it’s really hard,” she told InDaily.

“We’re in a really small space, and to operate at one per four square metres would mean 13 people inside and four outside… and with the weather, the four people don’t want to be outside.

“So the cost of operating far exceeds the financial return we’d get.”

She said costs such as wages, super, gas, electricity, taxes and the cost of goods “wouldn’t cover us doing 13 people inside”.

“I gave my staff the opportunity to help me make my decision, as we always do… the head chef and front of house manager both agreed that financially it wouldn’t be viable for us to operate.”

Reid says she’s lucky that Salted’s “really fantastic customer base totally get” the reasons for the ongoing closure, but said “it really does have a huge impact” on the business and its staff.

“They’re all casual so they’re not going to get paid for the time they’re not here,” she said.

“It’s really hard when we have to keep doing this all the time.”

She said the café, located on West Lakes shore, was “off the beaten track a little bit so, for us, to do takeaway was not an option” during lockdown.

Reid is one of many in the industry calling for targeted support – with the sector feeling the pinch well after the lockdown ends tonight, and the current State Government assistance package only covering the seven-day lockdown period.

Premier Steven Marshall said today some 2500 businesses had already received cash grants for the current period.

But Reid said “there should be some sort of broader assistance somewhere for hospitality industry”.

“I know everyone’s affected but for us it does have a broader impact for those that can’t open – and even for those that do, they’re still only a quarter full.”

Reid says she received a $3200 electricity bill the day after lockdown began.

“Short-term, people in my industry are suffering… they still need to pay wages – we need that short-term influx of some sort of help.”

She said if capacity limits were quickly increased to 50 per cent “that’s perfect for us”.

“I can survive quite comfortably in that scenario – we’re only a small space so one per two square metres, we’re used to operating like that… but 13 people inside just doesn’t cut it.”

Restaurant industry veteran and consultant Martin O’Connor told InDaily much would depend on how long the 25 per cent cap remained in place.

“We don’t want to come across whingeing and whining, but if that’s the scenario we have to reopen with, what we’re asking for in hospitality is some financial assistance,” he said.

“Some people are going to open up with limited capacity and skeleton staff, but some places are closing for a full week so that’s another week of no income for them – and that includes permanent part timers and the majority of casuals.”

He said most that do open “are going to run at a loss” but would “hopefully try and give staff some hours and keep morale and motivation going”.

“People were just starting to get back on their feet – it’s going to send a lot of people to breaking point, I think, he said.

Georges on Waymouth proprietor George Kasimatis said his city eatery had continued to serve takeaway food during lockdown and would reopen fully from tomorrow – but that it wouldn’t be easy.

“Being in the CBD means you’re heavily impacted, more than the suburbs, when it comes to these situations,” he said.

“It impacts the CBD more when anything is even mentioned… when the Government says ‘stay at home and work, don’t go into the office’ there’s less people coming into the city.”

Kasimatis says “when people move, the economy moves… when they don’t, the economy doesn’t go anywhere”.

“I’ve stayed open purely for our customers and to have momentum for when this is over again,” he said.

While he’ll be operating for lunch and dinner, he’ll be doing things differently – with two 90 minutes booking sessions a night.

He’s also considering “going back to set pricing, which I see a lot of restaurants doing”.

He’s already having to recoup the cost of “mass cancellations”, not just from the last week but from ongoing lockdowns in Melbourne and Sydney affecting corporate functions.

“When no interstate customers come across we’re highly impacted,” he said.

He’s thankful “our venue a little bit bigger, with a bit more density to work with”.

He expect to be able to seat 38 patrons at a time.

“Is it viable at 25 per cent capacity? It doesn’t really give you a chance to pay your bills. One in two gives you a chance to pay your bills,” he said.

Australian Hotels Association SA boss Ian Horne, however, insists the 25 per cent cap is “simply not viable”, even for “the cost of recommissioning a large premises”.

The longer we’re left at 25 per cent, it’s effectively a continuation of the lockdown as far as hospitality’s concerned

“How do you reset for 25 per cent? Do you start your kitchens up?” he said.

“I’ve no doubt some will open, as it’s a good way of keeping staff engaged and reminding customers you’re still there – but it comes at a price.”

Horne says “our hope is this 25 per cent is only for seven days”.

“It’s about balancing health and the economy, and at this point in time, the health understandably is dominating people’s perceptions – at great cost to the economy and industry,” he said.

“We can’t see why we can’t go back in steps to 50 per cent and 75 per cent.”

He notes that Perth was in lockdown just weeks ago “and today there’s no restrictions anywhere in the state”.

While Horne welcomes the $3000 business payments offered by the State Government, it’s a drop in the ocean for many impacted.

“With the greatest respect to that, $3000 may sound like a lot of money to an individual or small operator, but to a larger business it’s a welcome but generally token offer that won’t come anywhere near to covering genuine costs that would be incurred with a seven-day lockdown,” he said.

An industry-sponsored survey carried out by the SA Centre for Economic Studies estimated the impact of the previous three-day lockdown last year at $100 million, so the current shutdown is “going to be at least double that amount”, Horne says.

He says the industry is “grateful” to be emerging from lockdown, “but the longer we’re left at 25 per cent it’s effectively a continuation of the lockdown, as far as hospitality’s concerned”.

He’s pushing for an industry-specific subsidy, modelled on the federal government’s JobKeeper program, for cafes, restaurants and pubs.

“Hotels alone employ 26,000 South Australians, so the industry employs significant numbers of South Australians – the vast majority of whom are now stood down,” he said.

“They won’t be coming back to work till we get something closer to 50 per cent – or more likely 75 per cent – capacity.”

Treasurer Rob Lucas said the Government was “aware of the submissions” and “we’ll continue to monitor it”.

He said sectors such as live entertainment and events were in a similar situation.

“Hopefully we can get back to trading conditions which will allow them to stay open and viable,” he told InDaily.

“Some of them are saying their conditions don’t allow them to do that – we’ll continue to monitor the situation, but at this stage we’re not offering any additional assistance post-lockdown.”

However, he did note that position could change depending on the length of time of the 25 per cent capacity restriction.

“One of the conditions is how long do we stay at 25 per cent – and how quickly do we get possibly get to 50 per cent,” he said.

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