‘Our cities are changing’: Pandemic brings suburban ‘boom’ for hospitality

Cafe and restaurant businesses across New South Wales and Victoria are facing new obstacles and opportunities, as easing restrictions and rising vaccination rates mean diners can once again fill venues, recent research finds.

The pandemic has had lasting effects on the hospitality industry, according to a report by rostering platform Deputy, which found that the new normal will be shaped by changing cities and worker shortages, with the industry forecasted to need 140,000 new jobs filled over the next five years.

Deputy’s Staying Open: Future-Proofing Aussie Hospitality report outlines emerging industry trends, finding that wages for some professions are increasing, while hybrid work is transforming cities, boosting trade in suburban and regional centres but reducing trade in CBDs.

Shashi Karunanethy, labour economist and author of the report, tells SmartCompany the research reveals the resilience that cafe and restaurant operators showed while trading through significant disruptions to business conditions.

“The shape of our cities is changing with the relocation of city office workers to neighbourhoods and the likely permanent transition to flexible working arrangements,” Karunanethy says.

“This relocation of workers supported a boom in expenditure in local neighbourhood hospitality businesses.”

Higher wages for some

The report, which draws on a range of sources including Deputy customer data collected between January 2020 and October 2021, found that nation-wide lockdowns led to an 80% decline in shift work hours across the national hospitality industry.

Women across all age groups were hit the hardest by reduced hours and layoffs, and they were more likely to be casually employed with less than one year tenure, meaning they didn’t qualify for JobKeeper. According to the report, women experienced an additional 1.2% decline in shift work hours compared to men.

“A key transition for the industry will be to skill up young workers to be experienced enough to support their growth and to incentivise experienced sections of the workforce like women back into the workforce,” Karunanethy says.

Despite the tight labour market, Karunanethy says most businesses are not lifting wages to attract staff but are “transitioning to working with younger, inexperienced workers”.

“But when you focus on some specific occupations, for example chefs, what we’re seeing is an increase in wages,” Karunanethy says.

Deputy released the Shift Work Report at an online event on Wednesday where Jackie Middleton, co-owner of EARL Canteen in Melbourne’s CBD, and restaurateur Shaun Christie-David discussed industry trends.

Christie-David, who owns Colombo Social in the Sydney suburb of Enmore, said demand for chefs has skyrocketed, encouraging businesses to offer “soft perks” like more flexible working arrangements.

“The hospitality industry has now recalibrated to [accommodate] that supply and demand … chefs are getting gym memberships and they’re getting a whole heap of soft perks,” Christie-David said.

Middleton affirmed that demand for some professions within the industry is greater than others, particularly kitchen-based roles.

“There is definitely higher wages being paid to certain high-demand skill sets,” she said.

Commenting on the report, Deputy chief executive and co-founder Ashik Ahmed said the hospitality industry has undergone “a huge transformation” since the pandemic began.

“While it has had a devastating impact on a lot of businesses, watching the resilience of many of our customers as they embrace change and innovate is inspiring,” he said.