Gone are the days where local pub or restaurant owners can just serve a great chicken parmy. Consumers now need to be enticed to leave the house for entertainment, seeking the full experience – good quality food, at a reasonable price, in an alluring environment.
Those that have positioned themselves with a leading edge and a high quality product are thriving in this new environment, while others who haven’t adjusted are struggling.
This month’s QBM lunch provided the platform to hear from industry leaders on these thought-provoking challenges affecting the sector. The key issues that resonated most on a personal level have been highlighted below.
The opening of Howard Smith Wharves and the much anticipated Queen's Wharf precinct, which will see another 27 restaurants open in the heart of the CBD, are driving growth in Brisbane’s tourism and hospitality industry. However, this growth has brought with it the challenge of employment, raising questions around how the industry is going to staff these new precincts. The industry needs to adopt a strong employee base, with an emphasis on culture and internal promotions, if they are to retain staff long term. Employment is an area that industry bodies, such as the QHA, will be looking at closely over the coming months.
Lock out laws
Lock out laws and the inconsistencies surrounding these are still causing headaches for the industry. There are ongoing discussions being had about whether or not these laws are actually achieving the desired results and how to ensure there is a level playing field across venues that hold a liquor licence.
‘Netflix’ and ‘Uber eats’ mentality
A surprising takeaway from the lunch was that industry leaders now have to compete with Netflix. Consumers are opting to ‘binge watch’ their favourite Netflix shows while ordering Uber Eats rather than going out for entertainment. This poses challenges for the industry in that the actual amount of money available to spend on entertainment is shrinking, and if half of the weekly budget is being spent on Uber Eats, it becomes very hard to capture dollars and even get people out the door.
This is why creating an enticing environment for consumers is so important.
Easier for smaller operators to ‘come and go’
We are seeing a rise in smaller bars opening up for shorter periods of time (6-12 months), particularly in regional areas but also in Brisbane. A fit out isn’t needed as the facilities are already there, so it’s easy for operators to lease and start serving at reduced prices. This affects larger venues who have invested millions and millions of dollars in their properties as they are now having to compete with smaller operations who are paying a monthly rent.
For more detailed insights on these industry challenges please watch the short video above.
BDO’s Tourism and Hospitality team provide practical advice on issues affecting the industry. For more information, please contact myself or another member of our experienced BDO Advisory team.