The timing of a rise in the minimum wage could not be worse for the hospitality sector, industry leaders say.

A minimum wage increase of $1.20, bringing it to $21.20 per hour, has been confirmed by the Government and will come into effect on April 1.

The Gate Cromwell general manager Glen Christiansen said his sector was conscious of wages and was keen to work on them for staff, but timing of the increase "could not be worse for the regions".

Due to Covid-19 lockdowns and restrictions, the hospitality industry has been running at a loss for the past two years.

Glen said The Gate Cromwell was in a similar situation to other businesses.

"We've got staff who live with other staff and then businesses that share a kitchen.

"Isolating and splitting into teams is very hard for us.

"It's a balancing act that is not easy."

Another challenge he faced was the fact he had no clarity on the difference between a close and casual contact of a Covid-19 case.

"We're looking forward to that coming out, hopefully before it is too late."

Glen said people were learning to keep to themselves and be 'not social', which is a terrible thing for hospitality businesses.

Hospitality NZ CEO Julie White said the sector wants to lift wages of its workers, along with skills and career development, but the timing of the increase would force the early closure of struggling businesses.

“Half the sector’s businesses are no more than three months from closure – and this cost increase will happen in the deepest part of their financial hole.

“Most hospitality businesses are running at a loss because the public is not going out.

"There’s fewer customers now than even in the fearful weeks of 2020, just before lockdown.

“It’s not just the red settings – some customers are fearful of Covid, and most won’t risk the life-affecting impact of being ensnared as a close contact."

Julie said the industry was prepared to commit to a pathway of improved wages once the public felt safe to go out.

But, the only way of getting the sector through the next few months of Omicron, the latest variant of Covid-19, is a financial rescue package from the Government.

For more on the Government wage increase click here.

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