On the positive side, Aussie businesses stand to benefit from recent and future measures to cut interest rates this year, alongside slower price increases and lower fuel prices amid uncertainties brought about by the spectre of the US’ tariff policies under the Trump administration.

Insolvencies have also plateaued in recent months, albeit at high levels, with the construction and food and beverage services sectors the most affected by these high levels.

Overall, the past year has seen the hospitality sector hit the hardest, not only leading in business closures but also ranking highest across three key indicators of financial distress: insolvency rates, arrears (late payments), and ATO tax debt defaults over $100,000. This has resulted in one in 10 hospitality businesses in Australia shutting down over the past 12 months.

CreditorWatch CEO Patrick Coghlan commented that hospitality businesses are particularly vulnerable in several key areas. “They are exposed to the vagaries of discretionary spending. So, when households feel the pinch from interest rate rises and price increases, they typically spend less at places like cafes, restaurants, bars and pubs. The increase in people working from home has also had an impact, mainly in outlets in CBD areas.”

He added, “On top of that, you have the business cost increases in areas such as wages, electricity, insurance and food and alcohol. You also have to remember that most hospitality outlets are small businesses, so they usually don’t have the cash buffers to get them through hard times that large businesses often do. I really feel for them – it’s tough right now. There are many businesses out there barely hanging on.”

CreditorWatch says it doesn’t expect a major turnaround for the sector until households feel the impacts of at least a couple of further rate cuts in their budgets.

Chief economist Ivan Colhoun commented: “We hear so much about the cost-of-living crisis, but it’s a ‘cost of doing business crisis’ as well, with businesses having seen significant increases in their cost bases. Businesses exposed to discretionary spending experience the worst of both worlds, with their costs pressured and their customers’ demand weakened. Hopefully, the recent interest rate cuts by the RBA can build on the beneficial effects of last year’s income tax cuts and cost-of-living support.”

Colhoun also noted the economy is at a particularly interesting crossroads. “Insolvencies remain elevated but have not deteriorated in recent months, the previous rising trend likely arrested by the income tax cuts of mid-2024 along with Federal and State government cost of living support measures,” he said. “It’s too early for the RBA’s February interest rate cut to be influencing these figures, though that cut and this week’s rate reduction will be welcomed by both businesses and consumers. And should have beneficial effects in the second half of the year.”

“Working against this more favourable setting is likely to be a combination of slower population growth, the effects of continued high costs and the uncertain impacts of President Trump’s tariffs and trade wars globally,” Colhoun added.

“Thankfully, there has been some unwinding of tariffs in recent weeks, though the net effect on global growth is still expected to be contractionary. Taken together, we expect an elevated level of insolvencies to remain over the next six months.”

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Hospitality isn’t short on challenges in 2025 – heightened costs, evolving customer expectations, and changes in consumer spending continue to test even the most experienced operators.

Hospo businesses are having to make some hard decisions to survive. According to Lightspeed’s Dining Dynamics and Hospitality Insights Report, 53 per cent have raised prices, 41 per cent have changed or renegotiated with suppliers, and another 41 per cent have adjusted their menus.

Unfortunately, these shifts can create friction with customers if they aren’t communicated clearly.

Two strategies are emerging as important for small hospitality businesses: flexible pricing and transparent communication.

Flexible pricing models: An alternate to raising prices

Flexible pricing allows venues to offer options that meet different needs, budgets, and occasions.

Take a neighbourhood café that offers smaller portions at lower prices. It’s ideal for lighter appetites, solo diners, or those looking to save – and it helps reduce waste.

A brunch spot might let guests add premium toppings like avocado or feta for a small fee. These upgrades feel custom, letting diners tailor their experience, and can help lift average spend per head.

At a wine bar, tiered tasting platters – small, classic, premium – can anchor value perceptions and drive upsells without pushy sales tactics. Similarly, happy hour deals or weekend surcharges reflect demand-based pricing in a way guests intuitively understand.

Almost half (41 per cent) of venues plan to offer tiered pricing or portion sizes in 2025, and 42 per cent plan to provide premium upgrades. When done well, these tactics can give guests more control over their experience, reduce decision fatigue, and encourage repeat visits — all while helping venues lift margins and manage costs.

Why clearly communicating pricing builds loyalty and reduces friction

A well-priced menu can invite curiosity; a well-explained one can build trust. In today’s climate, how you communicate pricing can be just as important as the pricing itself. Clarity removes friction, avoids awkward surprises, and shows respect for your guests.

Here’s how to make pricing communication work harder for you:

• Lead with clarity, not complexity. Avoid vague labels like “market price” or “seasonal surcharge.” Be upfront – for instance, “+$2 for locally sourced free-range eggs.” Customers can be more receptive when they see the value.
• Keep your pricing consistent everywhere. Whether it’s your physical menus, online listings, QR codes, or delivery platforms, mismatched pricing erodes trust. A quick check-in across channels can prevent confusion.
• Use visual cues and price hierarchy to guide choices. Just like bakeries display per item, sets, and platters to highlight value, menus can do the same. Clear formatting and a balance of price points help steer decisions without the hard sell.
• Train your team to explain the ‘why.’ Even the best signage won’t help if staff can’t confidently explain pricing. Empower your team to speak to the quality, sourcing, or portion sizes behind the numbers.
• Be transparent about surcharges and tips. Explain the purpose of surcharges and where tips go. Clarity here builds goodwill and can show your venue values fairness.

Pricing transparency isn’t just good hospitality, it’s a brand strength. It shows guests that your venue is thoughtful, consistent, and committed to the customer experience. When communication feels clear and considered, it builds trust – and trust keeps customers coming back.

The post The new rules of pricing: How to survive rising costs as a hospo biz in 2025 appeared first on Inside Small Business.

“We are at breaking point,” said Wes Lambert, CEO of ARCA. “Costs are up. Tourism is down. Staff are scarce. Profits are vanishing. And yet the Federal Budget offered little more than a beer excise freeze and a power bill rebate. It’s not enough. The government has left the industry on life support – and the time for polite advocacy is over.”

Recent findings indicate that there are over 56,000 restaurants and cafes in Australia, employing more than half a million people. While these businesses are considered the lifeblood of cities and regional towns, soaring costs, red tape, and worker shortages have eroded average profit margins to below four per cent.

“This isn’t just an economic crisis – it’s an Australian cultural one,” Lambert said. “When restaurants close, communities lose jobs, vibrancy, and connection.”

With 9.3 per cent of the hospitality industry already plunged into insolvency and more than one in eleven venues predicted to close this year according to CreditorWatch, ARCA has launched a national campaign aimed to put the hospitality industry front and centre in the 2025 Federal Election through its ‘Positive Hospo’ Campaign.

ARCA’s Positive Hospo Campaign outlined its 10-point policy plan highlighted in their Pre-Budget Submission:

1. Remova of Fringe Benefits Tax (FBT) on Hospitality – instated as a key election policy for the Coalition
2. Freezing of alcohol excise Increases for 24 Months which has been set to take effect between August 2024 to August 2026
3. Freezing of Income Tax on tips (gratuities)
4. Digital tax rebate
5. Fee-free VET
6. Support for apprenticeships in restaurants and cafes
7. No changes to junior rates
8. Cafe and restaurant Managers to be added back to CSOL list
9. Index changes to TSMIT to Fair Work Annual Wage Review outcomes.
10. Increase in international student hours

“We will not let this election pass with hospitality ignored,” said Lambert. “The next government must choose: support the survival of one of Australia’s largest employment sectors, or be remembered for guaranteeing its collapse.”

The post Outrage as Australia’s hospitality businesses are left out of Federal Budget appeared first on Inside Small Business.

CreditorWatch currently rates 16.2 per cent of businesses in the food and beverage services sector as ‘high’ or ‘very high’ risk, significantly higher than second-ranked Administrative and Support Services at 7.2 per cent and Arts and Recreation Services at 7.0 per cent.

The report noted that businesses in the food and beverage services are currently struggling with high interest, increased input costs, energy price rises, reduced visitation in CBD locations, and lower consumer demand due to cost of living pressures.

At the other end of the scale, the Wholesale Trade sector recorded the highest proportion of businesses rated at ‘low’ and ‘very low’ risk (58.6 per cent), followed by Manufacturing (57.8 per cent) and Agriculture, Forestry and Fishing (51.3 per cent).

CreditorWatch Chief Economist, Ivan Colhoun shared that there are some common characteristics among sectors rated low risk, such as the hospitality sector.

“On the lower risk ratings side, unsurprisingly, there is a predominance of government or effectively government-funded business categories,” Colhoun said. “It will be interesting to see to what extent there is movement in risk ratings in the Education and Training sector over the next year, given the well-publicised changes to federal government policy in respect of higher education and immigration caps.”

Meanwhile, CreditorWatch CEO Patrick Coghlan commented that businesses in sectors such as hospitality and the arts are unlikely to see an improvement in business conditions until the RBA begins cutting interest rates.

“These industries that are heavily reliant on discretionary spending will, unfortunately, continue to find it tough until consumers feel a reduction in cost-of-living pressures, which won’t happen until we see a couple of rate cuts,” Coghlan said.

“Discretionary spending is one of the few ways that consumers can actively cut costs, whether that’s eating out less, buying fewer coffees at cafes or not seeing so many concerts or theatre shows.”

In relation to these findings, a report by ASIC found that 1,225 companies entered insolvency for the first time in September 2024. In seasonally adjusted terms, the number was slightly higher but not significantly so.

However, it has been noted that the number of registered companies has risen substantially between 2008 and today at 3.4m. This indicated that there were twice as many registered companies in September 2024 as there were at the start of 2009.

While it’s true that insolvencies are rising, the overall proportion is not as high as during either of the previous periods, though this may be due to the ATO bunching or catching up on insolvencies after the significant reduction in enforcement over the COVID period.

Ivan Colhoun commented that overall, restrictive monetary policy and several COVID after-effects (such as ATO enforcement actions, migration and foreign student policy changes) are combining to increase the risk of business failure, with interest-sensitive/consumer discretionary sectors most at risk.

CreditorWatch noted though that the rate of insolvencies is not yet especially high and the enforcement actions of the ATO are currently obscuring the underlying trend. Its modelling is expecting a further lift in insolvency rates, though expected interest rate cuts in the first half of 2025 and the beneficial aspects of recent tax cuts should prove a support.

The post Hospitality businesses at high risk appeared first on Inside Small Business.

Deputy’s second annual Shift Pulse Report, which includes findings from 1,536,000 shift workers globally, including 500,791 in Australia, found that 58 per cent of hospitality workers feel ‘amazing’ at the end of their shifts. Conversely, government, call centre and construction workers make up some of the unhappiest workers with stress and frustration remaining across these industries. 

In particular, 63 per cent of cafe workers feel amazing after their shifts, the highest in the hospitality sector, which the research attributed to the social and dynamic atmosphere of cafes and coffee shops.

“Australia is known for its world-class coffee and love of cafe culture so it’s not surprising that the sector has topped the list of happiest workers in the latest Shift Pulse Report,” Katrina Holt, Chief Customer Officer at Deputy, said. “The sociable nature of cafe work, along with opportunities for creativity and working in a vibrant atmosphere, have contributed to them feeling the most satisfied at the end of their shifts.  

“Fast food and sit-down restaurants also showed high levels of satisfaction among workers, pointing to a larger trend observed in Deputy’s data that indicates hospitality is the happiest sector across all shift work industries in Australia,” Holt added. 

Closely behind cafes are gym and fast food restaurant workers (at 58 per cent and 57 per cent respectively). According to the report, the high satisfaction among gym workers reflect the personal fulfilment that often comes from health and wellness-oriented roles; especially if these align with a person’s values and goals.

Despite the fast-paced and demanding environment of fast food restaurants, worker happiness could be influenced by team dynamics, support systems and effective management practices, according to the report.

On the other hand, positive sentiment in the services industry, including government, call centres and construction, has plummeted 10 per cent from 2023 to 2024, indicating a potential increase in workplace stress. Government workers have the highest level of unhappiness in the sector with 16 per cent of workers stressed and frustrated. 

The research also noted that call centres are known for their challenging working conditions, and the demands of handling frequent customer grievances can be particularly taxing, which in turn reflected in their growing dissatisfaction which now sits at 11 per cent.

Construction workers also make the list of most stressed workers in the Services industry with seven per cent feeling ‘stressed’ and ‘frustrated’, which is attributed to the physical demands and deadline pressures they face, as well as long working hours, may contribute to their lower job satisfaction.

Notable was improvement in sentiment across the healthcare sector, with 83 per cent of workers feeling ‘good’ or ‘amazing’ in 2024. This is attributed to the easing pressures off the back of the COVID-19 pandemic, as well as increased funding for healthcare sector that was introduced as part of the 2024 Federal Budget. The government has announced $8.5 billion in funding to be allocated to the sector, which includes $2.8 billion to strengthen Medicare, $4.3 billion to deliver cheaper medicines and $1.3 billion for a ‘fit and healthy Australia’, as well as funding support for student nurses.

The post Hospo workers found to be Australia’s happiest frontline employees appeared first on Inside Small Business.

Quite simply, it’s an industry built upon a foundation of small businesses. As consumers, we’re spoilt for choice. For venue operators, however, standing out in such a competitive, high-quality industry is incredibly hard. To do so, venues must think about more than simply the quality of their menu. To truly stand out, they must create an online reputation that works just as hard for their business as they do.

Elevate guest experiences

Venues cannot expect to build an influential online reputation unless they earn it through the experiences they provide. Today’s diners want more than a meal, they want a comprehensive, memorable guest experience. In fact, according to SevenRooms research, Australians are increasingly prioritising quality over quantity when it comes to dining out, while the pandemic has increased their expectations from venues, too.

According to our research, the biggest factors that encourage Australians to visit a venue are personalised offers based on past visits, perks and offers to reward and incentivise loyalty, and a business that uses technology to make it easier, more convenient and customer-centric. These experiences drive retention and reputation.

So, before you start thinking about your online reputation, ask yourself: Are we providing more than a meal? Do our guests receive a personalised, not one-size-fits-all, experience? And how are we using technology to enrich and improve the experience?

Reputation into revenue

For a small hospitality business, it can be daunting to know where to start when creating and cultivating an online reputation, especially in today’s ‘omnichannel’ era. Ultimately, if you provide an exceptional experience, it’s easy to build customer reviews. When businesses can improve the quantity and quality of their reviews, they’re easier to find online. Reviews are incredibly influential in today’s digital-first world. According to ReviewTrackers, one in three diners wouldn’t consider a venue with an average three-star rating, so focus on providing a five-star experience that encourages your guests to brag about your venue online.

Reputation management tools can help small venues automatically monitor and respond to reviews, promptly, across multiple platforms. Responding to reviews is just as important as generating them. By responding to reviews – good and bad – venues can improve guest relationships, encourage guest retention, and enhance their overall perception. When guests feel heard and valued, their loyalty grows.

Crucially, reviews can drive acquisition and retention, because of the data and insights they contain. Through guest experience and reputation management software, venues can pull their reviews into a Customer Relationship Management (CRM) system. This data provides insights into guest sentiment, allowing venues to address concerns and capitalise on feedback.

For instance, if multiple reviews talk about your oysters, your venue can segment those customers and send an automated email offering a discount on oysters during their next visit. For those who comment on the quality of your wine cellar, you can promote a special event with a sommelier. And if disgruntled reviews contain common threads, you can identify and overcome that too. This level of attention and personalisation increases the experience, and therefore loyalty, revenue and reputation.

A venue could have the greatest menu in the city, but it counts for little if it can’t be found online and if its guest experience doesn’t incentivise retention. By focusing on the guest experience holistically, from reservation to review and retention, hospitality venues, irrespective of their size, can build an online reputation that works just as hard for their business as they do.

The post How to build a big reputation for your small hospitality business appeared first on Inside Small Business.

Going from a one- to multi-location operation is no mean feat. It requires careful decision-making, listening intently to customer demands, digitising effectively, and keeping your ears close to the ground to ensure you’re capitalising on the current trends shaping our industry.

Understanding what keeps your community and guests coming back

Before expanding, it’s important to know what makes your first location successful. It’s in that first location that you can optimise processes, iron out kinks, and ensure you have a robust formula for attracting customers. Hone in on things like optimising sales, responding to trends, efficient reporting, and ensuring you’re focusing on profitability and understanding your customers. Reporting linked to your point-of-sale system and contact management tools like customer directories which enable you to store customer information and view how they interact with your business, can be powerful tools here.

Building and retaining a loyal customer base

Having a loyal customer base in your first location – almost like a cult following – will be the best endorsement you could get when expanding into new ones. Double down on marketing and ensure you’re engaging with existing customers and attracting prospective ones through carefully thought out social media strategy and loyalty programs that reward customers and provide personalised experiences for each customer. Ensure that you’re encouraging customer reviews and engage with them appropriately. Use technologies like automated discounts to keep price points fresh and provide further reasons for customers to keep coming back

Remote management and replicable systems

Creating a feeling of presence and consistency as you scale is critical, as you can’t be in all locations at once. Having a solid system in place when expanding will help you replicate the secret sauce that made your first location so successful. For example, look for technologies like point-of-sale systems which offer easy onboarding and training of staff, and give you the ability to create different permission levels at any location, execute staff performance management, and allow you to publish, manage and approve content, such as your menu catalogue, from a central dashboard. Technologies should also allow you to make real-time updates at a location level.

Being resourceful

Doubling your operations doesn’t mean you need to double the level of complexity, work and resources. It’s key that you find efficiencies during the scaling process that enable your business to remain profitable as you grow by streamlining your rostering and implementing self-serve technologies like payment kiosks, automation, freeing up time to focus on high-value ones, and automated inventory management and purchase orders.

Learning from the best

One business that successfully went from one to many stores is the Australian healthy fast-food chain Fishbowl. Fishbowl was founded in Bondi Beach in 2016 by school friends Nathan Dalah, Nic Pestalozzi, and Casper Ettelson, and now has 46 stores across Victoria, NSW and Queensland – and is expanding to New York this year. Nathan, Nic and Casper are innovators and have been early adopters of technology that’s allowed them to manage all of their 40+ stores from their phones. They’ve also put processes and operations at the heart of what they do to ensure quality and consistency. As they aptly put it: “Our design-driven spaces, vibe-making music, bold personalities and cultural diversity are all essential ingredients in bringing to life our healthy and delicious dream”.

Staying ahead of the pack

Going from one location to many isn’t easy, but there are a few fundamentals that can drive success. Getting the right processes in place from the outset, ensuring that you focus on making your first store a blockbuster before you even think about expanding, and providing immaculate consistency when you do choose to scale, will help you stand out to customers and keep you ahead of the pack.

The post One-to-many: sustainably scale your hospo business into a thriving multi-location operation appeared first on Inside Small Business.

About 20 businesses have been targeted for inspection, including those located in the suburbs of Wanneroo and Joondalup and Fair Work Inspectors have spoken with business owners, managers and employees on the ground, and requesting records.

Businesses were selected based on FWO intelligence including prior history of alleged non-compliance issues, employee tip-offs, or employment of vulnerable workers such as visa holders or young people. Most of the eateries are ‘cheap eats’ venues.

Inspectors are on alert for unlawfully low flat rates of pay; “off the books” employment arrangements; inadequate or missed breaks; non-payment of penalty rates and overtime rates; inadequate or false record-keeping and pay slips; and cashback schemes, in which employees are made to unlawfully pay back some of their wages, among other concerns.

Fair Work Ombudsman Anna Booth attended some of the inspections and said protecting vulnerable workers and improving compliance in the fast food, restaurant and café sector are the agency’s utmost priorities..

“Inspectors are on the ground in Perth this week speaking with employees and holding employers to account if they are not following workplace laws,” Booth said “We won’t hesitate to take enforcement action if needed, and employers should be aware that some penalties have recently increased. These inspections are part of a national food precincts program where we’ve often found that low-cost dining comes at the expense of workers’ lawful wages.

“This sector engages many young workers and visa holders who can be vulnerable, as they are often unaware of their workplace rights or unwilling to speak up,” Booth added. “We urge workers with concerns about wages and entitlements to reach out to us, including anonymously, if preferred.”

The inspections are part of a national program that has recently recovered more than $680,000 in unpaid wages for workers in Melbourne’s inner south and inner west food precinct. It has previously targeted hospitality outlets in other parts of Melbourne as well those in Brisbane, Sydney, Adelaide, Hobart, Gold Coast, Perth, Newcastle and Canberra.

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What is their raison d’etre? To provide a world of immersive experiences for visitors in a haven designed to alleviate stress and anxiety.

Brittany McCowan started her business journey by building a vibrant online community through her YouTube channel, inspiring creative expression via tutorials and interactive workshops. Simultaneously, she pursued a degree in art therapy, honing her skills for specialised art classes for adults with disabilities. “Following my degree, a new dream emerged – a vision for a community art centre,” Brittany reveals. “This aspiration eventually bloomed into the thriving reality of the art café I proudly manage today, Koko Kawaii. 

The venture began when Brittany’s online community affectionately named her koala character Koko. This character swiftly found its place within her stationery collection and sparked the initial idea for a themed café. “While managing my online stationery business, my close collaborations with fellow small-business owners sparked a greater ambition within me,” Brittany explains. 

“Our mission is to inspire creativity in an all-welcoming space, reaching beyond art and cuisine to provide a comforting sanctuary.”

Embedded in the Kawaii culture, Brittany has curated a soothing environment adorned with soft pastel colours and charming characters, creating a haven designed to alleviate stress and anxiety. “This fusion of Kawaii culture and sensory care at Koko Kawaii forms a unique and accommodating space, embracing diverse needs and celebrating individual differences,” Brittany enthuses. “Our mission is to inspire creativity in an all-welcoming space, reaching beyond art and cuisine to provide a comforting sanctuary for those seeking solace and creativity.”

More than just an art café, Brittany describes Koko Kawaii as a world of immersive experiences for her visitors. We take pride in offering a diverse range of engaging activities,” she says. “From our vibrant Splash Room, to painting adorable animal characters on cookies, our guests revel in hands-on artistry. The Art Wall awaits with an array of mixed goodies, offering a canvas for self-expression, and our DIY station allows the crafting of keychains –a personalised touch to take home from your visit.

“Visitors frequently find themselves squealing with excitement when they step into the café,” Brittany adds. “It’s a haven of positivity and creativity, offering a one-of-a-kind and joyous experience. My staff often find themselves spending time with our guests, explaining all the aspects of our cafe, as there is a lot to take in when you first arrive. We’ve had guests come from all corners of the globe, including families from Paris, New York, London and Tokyo – all of whom discovered us on social media platforms such as TikTok.”

The journey hasn’t been straightforward, with Brittany’s limited experience in hospitality creating challenges. “Balancing roles as a barista, manager and accountant demanded rapid skill development,” she admits. “Managing cashflow, finding reliable suppliers, and handling staffing complexities were hurdles. Expanding the team to address understaffing strained our finances, often leaving me in a bind when it came to meeting supplier payments by week’s end. To resolve this, I resorted to innovative solutions, revamping staff scheduling and hours allocation. The ongoing challenge of managing staffing during slow business periods remains, but I’m learning to handle it better over time, mindful of the impact on the staff’s financial stability and wellbeing.”

Navigating these challenges in the early days demanded creative problem-solving to balance financial stability and staff welfare, mitigating the impact of Brittany’s limited experience in the hospitality sector. Her team’s happiness remains a priority, and Brittany continues to strive to improve both the financial stability of the business and the wellbeing of her team. 

Brittany eagerly anticipates the prospect of expanding into a larger space in the next few years, broadening her horizon to host larger events and introducing fresh characters and menu items, enhancing the overall experience for all who step through the door.

This article first appeared in issue 43 of the Inside Small Business quarterly magazine

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As a result of this belief, hospitality businesses have already implemented a number of green initiatives which include going paperless (37 per cent), using recyclable cutlery and packaging (36 per cent), serving organic or farm-fresh produce and offering customer incentives for using reusable products (35 per cent).

However, 40 per cent of hospitality businesses admit they are struggling to implement these initiatives because of the expense involved. And while sustainability matches with what operators think customers want and what consumers say they expect, it doesn’t when it comes to vegan or plant-based items. The report in particular notes that while vegan or plant-based options is being incorporated by 31 per cent of hospitality businesses in 2024, only 13 per cent of consumers indicated that they’d like to more of such options in 2024.

The report also reveals that technology adoption is at an all-time high, with 91 per cent of businesses already using AI. Businesses surveyed stated that technology is helping them save money on overheads (39 per cent), improve customer service (33 per cent) and overall operational efficiency (33 per cent). However, staff training and adoption (29 per cent) is believed to be the biggest barrier for businesses to further optimise their tech stack. 

“It’s clear to see businesses are building their foundations around two things: sustainability and AI,” Andrew Fraser, Managing Director, APAC at Lightspeed, commented. “As they look to navigate through another challenging year, the use of AI and other technologies such as POS will help vendors save time and resources. A shift to further tech adoption will help reduce costs and free up hospitality leaders to implement what customers are expecting from them.”

The report also highlights that the cost of living crisis is still impacting both hospitality businesses and consumers alike, with 37 per cent of restaurants, bars and cafes having had to change menu items, 35 per cent having had to change or re-negotiate with suppliers, and 32 per cent stating that they have had to let staff go. Prices have also had to rise with 29 per cent of venues revealing they have raised prices by 27-39 per cent compared to the previous year. 

For consumers, tipping culture remains low with the cost of living crisis still in full swing, 68 per cent of consumers stated they have not tipped anything on their hospitality bill this year.  Surcharges remain a contentious issue with  17 per cent of Aussies saying they feel very annoyed when they see a surcharge on their hospitality bill, especially the higher earners (those earning between $90,000 and $130,000) at 21 per cent. 

Despite tough economic conditions, 37 per cent of consumers are still eating out at least once a week with men (45 per cent) more likely to eat out once a week than women (35 per cent). Men are also twice as likely to drink out once a week or more than women (30 per cent vs 16 per cent).

“Our findings highlight the consumer expectations that hospitality businesses in Australia need to be aware of,” Fraser said. “Crucially, these expectations are not just centred around a product or service standpoint, but factors such as sustainability initiatives, which will play a key role in attracting and retaining customers. Serving excellent food and drink is important but businesses must not underestimate the wider ethical practices that today’s customer judges a venue on.”

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