Major Issues Facing the Hospitality Industry


The hospitality industry is booming, but research shows there are a lot of factors limiting the success of Australian hospitality businesses.

In order to see what’s cooking in the Australian hospitality sector we conducted an extensive survey of hospitality businesses.

Owners, managers, head chefs and even staff members had their say, from restaurants, cafes, bars, nightclubs, and pubs around Australia.

From an increase in competition, to the costs of operating, there are many issues impacting the success of hospitality businesses.

These are the top challenges faced by hospitality businesses and reasons for revenue loss in the past year, according to our survey.

1. Growth in the Sector = More Competition


One of the key insights the survey found was the rate of growth in the hospitality sector. This, of course, means that competition has grown. In fact, 73% of hospitality businesses surveyed said their competition has increased in the last year.

Of the respondents, 55% believed that the increase in competition has led to a revenue loss for their hospitality business.

There are many reasons for increased competition in this industry. A majority of hospitality businesses attribute industry growth to the growing foodie culture captivating Australians.

Foodies are more often than not young and engaged in social media. Although they are time-poor, they have a larger disposable income to spend on dining out.

This is perhaps why foodie culture is having such a great impact on the hospitality industry. The most effective way to stand out in a foodie’s market is to embrace social media.

Other factors thought to be promoting a growth in competition are local population growth and higher consumer demand. The allure of owning a hospitality business also convinces people to open up shop.

2. Finding & Keeping Valued Customers

The growth in the industry and increased competition could be a contributing factor to your hospitality business’ ability to attract and retain customers. Nearly half of owners, managers and staff surveyed said they experience this challenge.

This common complaint can be remedied in a number of ways. You can introduce promotions, sign up to online food delivery services, or pivot in some way.

3. Changing Food Attitudes Affect Hospo Businesses


Pivoting might be a necessary move, especially when it comes to a changing landscape. Culinary habits and attitudes ebb and flow.

What was popular and profitable when you started may not be working for you anymore. A third of survey respondents said such changes in culinary habits has contributed to their revenue loss.

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4. Produce Going to Waste

There are a lot of reasons your restaurant or café might be throwing out food. Besides the run-of-the-mill reasons, planning can play a big part in preventing massive food waste. Even the smallest mistake however can throw off the entire system.

A stock management system, like the one integrated into Impos Point of Sale solutions is a great way to stop the waste and become sustainable. It might be just the thing to stop the revenue loss that over half of hospitality owners and managers experience.

5. Hiring the Best Staff


Finding the best staff is a problem for all employers, but it can be particularly challenging for hospitality businesses.

The challenge of hiring and retaining staff is a challenge experienced by 54% of all hospitality business owners and managers.

It is particularly important to find good hospo staff, as it was found that slow or bad service can attribute to revenue loss. There are plenty of new ways to find staff, through apps and social media for instance.

You might not always find the very best staff, but as long as they are hard-working and willing to learn, you can always train them.

6. The Costs of Operating: Penalty Rates, Taxes & Fees

One of the most common factors hindering businesses according to restaurateurs, café and bar owners, is the cost of operating. Whether that be penalty rates and staff costs, or tax and GST obligations.

Penalty rates are still an issue according to hospitality businesses. 71% of hospitality respondents cited penalty rates as one of the top 3 issues hindering their business.

Of regulatory fees and charges, Tax and GST compliance also left 46% of respondents feeling burdened. Credit card and Eftpos fees were also a top issue for 48% hospitality businesses.

This keys into the overall cost of operating. Just over half of all respondents said they have experienced the challenge of balancing increasing operating costs with profit.

Streamlining the business and seeking professional advice may be the best way to combat the rising operating costs.

Looking for more important hospitality industry news and insights? The Impos Blog is your source for everything hospitality-related. Stay up-to-date and get top-notch advice from the experts at Impos to help your business succeed.

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