Hotel SA March 2024

We’re hurting -
but not “doomed”
From the President
DAVID BASHEER
In recent weeks, there has been
a deluge of media speculation
about the viability of the hospitality
industry.
Any industry participant will easily
identify how much harder business
has become in recent months, and I
will focus on that shortly. However,
much of the discussion has become
alarmist, potentially spooking
valuers, lenders and investors.
A recent headline claiming ‘Why
the hospitality industry is doomed’
is frankly unhelpful, alarmist
and inaccurate.
I will leave commentary around
cafés, restaurants and other
industry segments to others, but
the hotel and pub game has proven
to be resilient since Colonel Light
landed in South Australia in 1836
and went searching for his first
schooner of West End.
There is a very simple reason
the hotel and pub game in South
Australia has survived two
pandemics, two World Wars, a
depression, numerous economic
downturns, changes in consumer
tastes and an array of threatening
Government policies.
We have always offered a quality
product keenly sought by South
Australians. Our industry continues
to be filled by energetic business
owners who invest in their product,
their staff and most importantly,
their communities. Being the
heartbeat of any community counts
when the going gets tough. With
so many of our pubs being family
businesses, authenticity counts.
South Australian hotels are
universally regarded as the nation’s
finest. Our members’ investment
has produced outstanding venues
people want to attend.
Mercifully, for these reasons,
economic casualties in the pub
world have been scarce in recent
times as our industry’s resilience
comes through. But not for a
moment does that ignore the fact
we are navigating troubled waters.
We have had the opportunity to
discuss in recent times with the
State Treasurer Stephen Mulligan
why this is such a difficult time for
hospitality.
Members don’t need to be reminded
of the issues we highlighted with
the Treasurer. They live it on a
daily basis.
The two key issues that have
caused the tightening of the
economy have been interest rate
rises and a sharp increase in
cost of living. And whilst they are
largely viewed within the prism of
household spending, they have
bitten business sharply.
Debt in our sector rose 15%
during Covid. Low interest rates
eased that pressure. However, 13
consecutive interest rate rises have
put pressure on any hotel with debt,
but particularly those that came out
of Covid in a vulnerable financial
position.
Business costs have risen across
the board but rises in insurance
and the constant spiralling power
costs have bitten hardest. Power
costs impact our sector more than
most, given our heavily reliance on
refrigeration and air conditioning for
extended trading periods.
We did highlight to the Treasurer
our frustration with the bureaucracy.
They were amongst the 76% of
the population whose income
was not negatively affected by
Covid. Seemingly, the moment
Nicola Spurrier disappeared
from our daily news cycle, that
signalled the green light for the
bureaucratic class to implement
their own pent up demand, and
impose unrealistic impositions on
an industry deserving of a peaceful
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