Sydney's hospitality scene.


9th August, 2019

The reasons why Sydney’s hospitality scene is still open for business

There’s been plenty of commentary suggesting that Sydney’s hospitality scene is in dire straits, but as Renae Smith discovers, there’s still plenty for restaurateurs to be bullish about.

If you follow Australia’s food scene or have been considering opening up a venue of your own in Sydney, you may have heard the dire warnings around owning a Sydney-based restaurant.

With blunt advice like, ‘Don’t do it’ from industry leaders like Mitch Orr, the co-owner of the recently closed ACME restaurant. Or the grim opinion of Mark Best, owner of the defunct Surry Hills restaurant Marque: ‘Restaurateurs are between a rock and a f—ing hard place’. It’s no surprise that Sydney’s hospitality industry is gaining a slightly worrisome reputation.

But contrary to popular opinion and the continued groanings of restaurant owners and chefs, it’s not all doom and gloom.

In reality, the Sydney restaurant culture continues to impress, with new restaurants and exciting pop-ups from internationally acclaimed chefs (like Jock Zonfrillo of Orana) bursting onto the food landscape every week.

READ: Are home delivery options hurting your restaurant’s profitability?

While we cannot deny that some Sydney restaurants are closing and that it appears the past year or two has been a particularly hard time for certain hatted or long-standing venues (like Newtown’s Oscillate Wildly and the afore-mentioned ACME restaurant), is it true that Sydney’s hospitality industry is actually dying?

It’s true that there has been a larger number of restaurant closures in Sydney during the last quarter than is ‘typical’. But as with any statistic, looking at a single three-month period gives a very limited view of the industry as a whole. Looking at the bigger picture gives you a better idea.

In fact, in New South Wales, the café and restaurant industry grew by 7.9 percent between November 2017 and November 2018. And this trend is expected to continue with the food and beverage sector of the NSW economy expected to grow by 35.9 percent over the next decade.

Why the claims that Sydney’s hospitality scene is doomed?

It could be that when venues are forced to close their doors, they quickly look for someone or something to blame – be that lockout laws, the stagnant economy, the disruption of food delivery services, labour costs and the fickleness of Sydney diners.

It’s true that some of these issues may add to the difficult job of running a successful restaurant, but it’s hard to place the full blame on these issues when at the same time, and in the same food landscape, there are restaurants that are thriving.

Take Saint Peter, for example, which The New York Times described as ‘proof that when it comes to the modern dedicated seafood restaurant, Australia does it best’. Or nel., the Sydney restaurant that has turned a typical dining experience into something theatrical and glorious. Or the other new in-town players that are making ‘Sydney’s dining scene… stronger than ever’, according to Gourmet Traveller.

Nelly Robinson, the chef behind nel., believes that it’s a fantastic time to be getting into Sydney’s hospitality scene.

“There are some unhappy restaurateurs here at the moment,” Robinsaid said, “because the Sydney restaurant scene is changing.

“But that’s not a bad thing. It means there are fantastic opportunities for up-and-coming chefs and new food ideas.”

Robinson’s not wrong. With Australia’s runaway ‘foodie’ culture, diners are looking for so much more from their restaurants.

And Sydney is answering the call.

READ: Rebranding for hospitality businesses

In fact, in the last few years, Sydney has leapt ahead of Melbourne, the formerly premier foodie destination, by redeveloping iconic buildings, laneways, byways and factories into incredible foodie experiences.

Described by News as ‘the place to eat right now in Australia’, Sydney is certainly showing no sign of slowing down.

Lockout laws have been another common complaint from struggling venues. Again, this seems to be more a case of finger pointing and ‘blame game’. After all, since late 2018, Sydney’s after-hours economy had already bounced back with the number of venues growing by 1.8 percent in 2017 and overall sales rising by 6.3 percent.

Rather than sinking, the city’s night-life economy was worth $4.05 billion at the end of last year.

‘This growth comes off the back of decline between 2014 and 2015 following the introduction of the lockouts in February 2014,’ according to a report commissioned by the Council of Capital City Lord Mayors.

“Rather than blame the economy, or the lockout laws, or some third-party delivery services, restaurants should look to how they can adapt in the new changing market,” advised Robinson.

“Yes, Sydney diners are looking for new experiences. Yes, they are changing their expectations about dining out.

“But at the same time, more Sydneysiders are eating out now than ever before.”

For Robinson, the blame game isn’t helping diners or business owners.

“I think, as an industry, we need to stop looking for excuses and start thinking about the customer’s experience. Those are the restaurants that will succeed.”

And Sydney is still the place to do that.


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