Victoria’s venues hit hard by second lockdown

08 July, 2020 by The Shout Team

By Andy Young and Vanessa Cavasinni

The sharp rise in positive cases of COVID-19 in Melbourne over recent days has seen Victoria’s Premier Daniel Andrews re-instate Stage Three lockdown for Melbourne’s metropolitan area and the Shire of Mitchell.

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The news is a devastating blow for the city’s pubs and bars still reeling from the lockdown in March and delayed easing of restrictions. This second lockdown will last six weeks, with people in the lockdown zones only allowed to leave if shopping for food or other essential items, care giving, seeking medical treatment, exercising or for work or study if it’s not possible to do those at home.

Pubs, bars, clubs and nightclubs are once again closed although they are able to offer take away food and alcohol.

Speaking yesterday, Andrews said: “I know a lot of people aren’t scared because this feels like something happening to other people in other parts of the world.  But you should be scared of this. I’m scared of this. We all should be.

“Yesterday, we reached a grim new milestone, the most cases in a single day. Today, we surpassed it.

“It’s clear we are on the cusp of our second wave – and we cannot let this virus cut through our communities.

“It’s why based on the advice of the Chief Health Officer, Stage Three ‘Stay at Home’ restrictions will be reinstated across metropolitan Melbourne and Mitchell Shire from 11:59pm on Wednesday 8 July.”

He added: “Businesses in metropolitan Melbourne and Mitchell Shire will also return to Stage Three restrictions.

“Restaurants and cafes will return to takeaway and delivery services only. Beauty and personal services will need to close. Entertainment and cultural venues will need to close. Community sport will need to stop.

“I know just how tough this will be for these businesses and for their workers. I promise, we’ll have more to say shortly about support to help get you through.

“I also understand six weeks might feel like an eternity. But it’s the time our health experts tell us they need to really get on top of this thing.”

The news is a huge blow to venues across the city who were just starting to have confidence in being able to open further and welcome more guests.

Brooke Hayman, Director at Whisky & Alement Bar, told The Shout the news meant the team is “going back to the drawing board.”

She added: “Survival will depend on the extension of JobKeeper and government support to cover outgoings. Lockdown is the right thing to do, however it’ll leave us with only five weeks to get business up, running and paying the bills before government support ends.

“It’s a rollercoaster and we’re taking it one week at a time.”

And while Hayman said the bar will go back to what it learned and experienced during the first lockdown, she is concerned about how that will work this time.

“We’ll pivot back and focus on online bottle shop sales and virtual events,” she told The Shout. “Customer support was so great during the first lockdown that we were able to minimise losses, however Melburnians are tired and we anticipate the second lockdown being a lot harder than the first time around.”

Adam Betts, co-owner of Bonny Bar, laid out the cold hard financial reality of what this lockdown will mean, and said he expects the industry will be very different on the other side of this one.

“The second round of lockdown will put on a huge amount of pressure for the industry,” Betts told The Shout.

“Once we are able to reopen, it will no doubt be under restrictions again for some time. For example the one person per 4sqm limits us to 16 customers, where we would normally have up to 80 in the bar.

“Needless to say revenue will be right down when we reopen for many months and the economy will be in a recession. With reduced revenue, we will also have an increase in costs as a double blow.

“Unless there is further changes, the portion of rent we were able to negotiate as deferred for six months ends, so rent actually becomes higher than it was pre-COVID as it returns to the full amount plus repayments on the amount that got deferred.”

He added: “Bank loans businesses received to assist cashflow in the first wave of outbreaks, had a six month interest only repayments period, likewise they will revert to the full payment amount of principle and interest.

“Jobkeeper, which has been the lifeline for a lot of hospitality operators and their staff is also due to finish at this time. For businesses that do survive, it will take many years to pay off the effects of COVID restrictions, lockdowns and outbreaks.

“We expect to see a very different hospitality landscape in the short and medium term.”

Earlier this week, Iain Ling, operator of Carlton pub The Lincoln, and 2019 ALIA Publican of the Year, told Australian Hotelier that the pub was preparing for a second lockdown.

“We are a lot leaner and are running more on a week-to-week basis. The product we are offering is a lot simpler at the moment – it has to be. We can’t carry as much fresh produce with the infection numbers on the rise again and we can’t have 8-10 bottles of wine open at any time. It just doesn’t make business sense,” he said.

The Australian Hotels Association Victoria, told The Shout it recognised the hardships members would be facing heading into a second lockdown so soon after reopening, but encouraged pivoting their businesses again.

“Obviously we are very concerned about the health pandemic the Melbourne region is experiencing and we are really feeling for our members who once again have to shut their doors to their customers, this is incredibly challenging. Stock has been purchased, staff have been rostered on, the bills continue to come in,” Kimberley Malcolm, Senior Manager Membership and Industry Engagement said.

“I encourage our members who are returning to take away and delivery to trust they have done the work, their structures are in place to return to that mode of business for now.

“Unfortunately these circumstances are out of our control, we now have to focus on what we can control.”

The issue of extending JobKeeper is now a fundamental one for many operators in Victoria, and beyond, and while Hayman called for Government help, she also reminded everyone, what makes this industry so strong.

“The key message for government is that the industry requires assurance now that their support of JobKeeper will continue beyond September.

“For trade, don’t think that you’re alone and don’t be afraid to reach out to peers for support, pick up the phone.”

The Shout is also keen to help venues and operators, so please contact either The Shout Editor Andy Young or Australian Hotelier Editor Vanessa Cavasinni to get your message heard.