Uber Eats is eating into NZ's hospitality sector, Restaurant Association claims

A new report from the Restaurant Association would have you believe the hospitality sector is experiencing record growth, but the industry says it's Uber Eats that's winning.

Not everything is what it seems in hospitality at the moment, starting with the rise of the 'ghost kitchen'.

"We can basically have five, seven, 10 brands coming out of one kitchen that's basically pretending like they're all individual brands," says business owner Tyler Kerlin.

It's his answer to New Zealand's soaring demand for takeaway food, which has raked in an extra $148 million this year alone.

"It seems the sector is moving forward and making more money, but in actuality it's harder to make a dollar," he told Newshub.

From the look of the statistics, New Zealand's hospitality industry is booming. From March 2015 to March 2016 sales increased by 8.5 percent, and 9.7 percent the following year.

This year, earnings are still up - but by a lesser 3.6 percent, bringing the total earnings for 2018 to $11.2 billion. Half of that comes courtesy of restaurants and cafes.

"It shows on the top line, but on the bottom line you're not seeing it," Mr Kerlin says.

He says Uber Eats now makes up around 30 percent of his sales, but the delivery service claims 35 percent of those sales - which he says is "not worth it".

Restaurant Association chief executive Marisa Bidois agrees that Uber Eats is eating into local profits.

"The profit margins that Uber is taking from the industry are extremely high, and we've made it perfectly clear that we feel it's too high for the industry," she told Newshub.

Rising wages are adding to the problem. Earlier this year, the Government raised the minimum wage to $16.50 per hour, and there are plans to increase it to $20 by 2021.

But Ms Bidois says the extra cost is putting huge pressure on businesses.

"The hospitality business is a game of tight margins, and it can be a balancing act."

Newshub.

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