Pub owners say labour shortages are hitting the booming sector
Justin Hemmes’ behemoth hospitality empire has revealed trading has collapsed 20 per cent given his pubs are short 1000 staff, while another billionaire publican, Arthur Laundy, who has operated in the industry for more than 60 years, says staff shortages have never been this bad.
Yet both Hemmes, owner of the Merivale Group of 140 pubs, restaurants and hotels, and Laundy, who owns 80 hotels, pubs and restaurants on the eastern seaboard, are yet to resort to the actions of their American hospitality colleagues who were last week so desperate for staff they were offering $US1000 sign-on bonuses for workers willing to sell sushi, suntan cream and sarongs.
The Hawaiian-owned and operated ABC chain store franchises just across from Waikiki beach are also offering sales staff a hefty $US19 an hour which is at least $US3 an hour above the usual American pay rate for similar sales jobs.
Further out, on the Hawaiian island of Kauai, hotel managers report younger islanders do not want to work making it tough to staff the so-called Garden Island’s bigger resorts particularly its large-scale Marriott hotels which have hundreds of rooms.
At home, the situation is possibly worse for pub titan Justin Hemmes and his Merivale operation’s up-market restaurants, pubs and bars as well as two stadiums which are short almost 1000 staff, forcing multiple venues to open restaurants, pubs and bars on reduced hours.
“We are completely undercooked across the entire industry,” said Frank Robert’s Merivale’s group operations manager, who added that some of their venues were opening for five days a week instead of seven days because of the chronic shortage of staff.
Roberts estimated staff across the group were at least 25 per cent down on the usual 4500 Merivale employed with trading off 20 per cent as a result.
“It’s affecting us enormously in catering for the Sydney Cricket Ground for instance,” he said. “We have a chronic shortage of chefs, line level cooks, chef de parties, and a severe lack of hospitality staff, as well as sommeliers and professional waiters. We also have a lack of bartenders and a shortage of people entering the industry. We are stretched everywhere. As a consequence our trading is 20 per cent off … and at such a fantastic time. We have never had such a fantastic time of people wanting to come to our venues.”
Mr Roberts said he hoped the federal Labor government understood the golden egg which is hospitality should not be taken for granted. “If you want to succeed you need customers and people to serve them,” he said. “We need varying degrees of skilled migrants to help us get there or we will linger in a post pandemic state for years.”
Merivale was recruiting in many countries and interviewing and trialling 55 chefs from all parts of the world. Mr Roberts said full time waiters and bar staff were paid $60,000 a year plus tips and chefs earn above award rates.
Pub competitor and veteran publican Arthur Laundy said the lack of hospitality staff was the worst he had seen in more than 60 years in an industry where he had built up a portfolio of pubs, resorts and hotels on the eastern seaboard with a focus on NSW.
“I have never seen anything like this in my life,” he said.
“Recruiting agencies are ringing hotels offering staff 10 per cent pay increases, they are poaching staff, it’s a fiasco, I have never seen anything like this.’’
Mr Laundy just forked out $43,000 to an agency to bring in nine chefs from Nepal and the Pacific Islands to help staff his growing empire.
At his The Log Cabin Hotel in Penrith in Sydney’s outer west, which he said had gone off like a “rocket” since its recent opening, he had to teach 50-60 new staff how to pull a beer.
“You can’t do that in an hour,” he said. “We have 200 staff out there, and we could do with another 100 staff,” he told The Australian, adding that it was only recently that he was able to open the hotel’s fine dining second floor restaurant because he now had sufficient staff.
Mr Laundy will start opening his newly revamped Woolloomooloo Bay Hotel on the edge of the city this week, but this hotel has also been beset by a lack of staff. But it is not just finding waiters, bar staff and baristas that had caused headaches for the Laundy Hotel Group.
Mr Laundy said he was looking for managers for at least five of his prime Sydney city hotels including the Woolwich Pier Hotel in Sydney’s Woolwich, the Oxford Hotel in Drummoyne, the Crossways Hotel at Enfield and the Marsden Brewhouse at Marsden Park in Sydney’s outer west. He said some Sydney publicans had resorted to paying large sign-on bonuses to hospitality staff but that was something he would not do.
Both pub tycoons are likely to find a way through the staff shortages and have not paused on the growth of their property portfolios.
Hemmes this month made a dramatic play for a new site in the Sydney CBD, which could one day be transformed into a super complex to rival his landmark Ivy party palace.
The billionaire quietly picked up the Kings Green development site for about $200m, where plans for a $1.8bn office skyscraper have been scrapped and plans are afoot for one of his trademark high-end bar and restaurant precincts.
Merivale will push ahead with those plans and the Laundy family, whose acquisitions have included the Bayview Hotel on the NSW Central Coast and the Mercure at Port Macquarie, would also keep buying.
But publicans without their heft and capacity to offer careers and advancement across multiple venues could find themselves on the outer.
LISA ALLEN ASSOCIATE EDITOR & EDITOR, MANSION AUSTRALIA