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Hospitality industry revenue losses up to 75%

June 24, 2020
By Alana House

New data from the Australian Bureau of Statistics shows the hospitality industry has been one of the hardest hit by COVID-19, second only to the education and training sector.

Two thirds of businesses reported a decrease compared to last year according to the ABS survey on Business Impacts of COVID-19. Of those businesses, more than three in every 10 estimated that revenue had fallen by more than 50%.

Gohar Yazdabadi, Director of Policy and Government Relations, Alcohol Beverages Australia, said: “Our industry has been hit hard by COVID-19 and the ABS data shows that the pain is far from over with our industry being the second hardest hit with 84% of business reporting a decrease in revenue compared to this time last year.

“Even more concerning, of the businesses reporting a decrease in revenue, 30% reported a decrease of more than 75% compared to last year, 33% reported a decrease of between 50% to less than 75% and 33% reported a decrease between 25% to less than 50%.

ABS Head of Industry Statistics, John Shepherd, said: “This external advice was most likely to be obtained from organisations including banks, lawyers or accountants (81%) and also federal government agencies (64%).”

Businesses were most likely to seek advice about government support measures (86%) and regulation and compliance (75%).

Shepherd said: “The survey found that almost two thirds of all business have introduced new hygiene protocols and practices, and 57% have made changes to meet physical distancing requirements.”

The ABA said the figures reiterate the ongoing financial hardship that the drinks and hospitality industry are facing in the wake of COVID-19. The data shows that compared to this time last year the industry has had significant revenue losses across the board.  

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“The data also shows that 42% of business in the sector believe that their current business operations can be supported for less than three months based on current available cash,” Yazdabadi said. “This sentiment is a dire warning for what lies ahead for the drinks and hospitality industry in coming months.

“96% of trading businesses in the sector are operating under modified conditions. In order to get revenue and jobs back on track it’s important that these businesses get back to trading as normal as soon as possible.

“The hospitality sector lost close to half a million jobs at the height of coronavirus restrictions, with an additional 15% lost from the workforces of beer, wine, and spirit producers.

“$8.5billion has been wiped from hospitality business sales representing close to 10% of annual revenues for beer, wine, and spirits producers.

“It’s important that governments across Australia recognise the ongoing struggles of the drinks and hospitality industry and work with industry to help get Australia’s economy back on track.”

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