Queensland’s hospitality industry could be decimated as Covid lockdowns take their toll

Queensland’s hospitality scene could be decimated with a host of restaurants and cafes teetering on the edge of collapse.

A host of restaurants and cafes across Queensland are teetering on the edge of collapse, claiming continual snap lockdowns and a lack of government financial support is destroying businesses.

Restaurateurs estimate the stay-at-home orders cost them tens of thousands of dollars in lost revenue each time, plus thousands in food wastage costs. With most eateries only earning two to five per cent profit, they say the costs are too big to wear and many will be forced to close permanently.

On Monday, Brisbane husband and wife James Alcock and Stephanie Fausz made the heartbreaking decision to shut the doors on their hugely popular, family-run eatery Wine & Larder Bistro in Ashgrove. Their cash reserves and bank accounts had been reduced to zero after being chewed up by lost revenue from constant Covid closures.

“Last year we had JobKeeper and cash reserves in the bank. This year most of those were depleted from last year and there’s been no JobKeeper and no support from the Government, so we’ve just run out,” Mr Alcock said. “There’s nothing left in the kitty to reopen this week.”

James Alcock and wife Stephanie Fausz have been forced to shut their Ashgrove restaurant Wine and Larder Bistro due to the latest Cover lockdown and don’t know if they'll ever be able to reopen. Picture: Lachie Millard

Despite the restaurant having a good business model, a strong local following and being regularly booked out on Friday and Saturday nights, Mr Alcock said it wasn’t enough with last week’s snap eight-day lockdown costing the business $30,000 in lost revenue.

“It’s tough in hospitality anyway because the margins are so thin and your overheads are so big,” he said referring to high staff wages, rents, electricity, insurance and soaring food and drink costs.

“We might have just made the smarter decision to close because if there’s another lockdown coming in two weeks time we may just be digging ourselves deeper and deeper into debt.”

An increase in staffing costs thanks to July’s increase of Australia’s minimum and award wages was also hurting restaurants’ bank accounts. This was compounded by the fact that venues were having to pay well above award rates to keep good employees as a desperate lack of skilled workers caused by international border closures threatened to further cripple the hospitality industry.

Rossano Tantulli behind Tantulli’s Italian restaurants in Stafford, Carseldine and Samford said he was paying an extra $1000 a week per staff member in wages, but was loathed to pass that on to customers.

“If I up prices I will lose my customers,” Mr Tantulli said, revealing it was also why he hadn't passed on the 15 per cent increase in beef prices and other ingredient costs.

“My customer comes two times a week and if I increase prices I will lose that,” he said, instead deciding to reduce their operational hours to make up for some of the extra charges.

He said last week’s snap lockdown had cost him about $60,000 in lost revenue across his three eateries in the first weekend alone, with their timely switch to takeaway only bringing in a tenth of the revenue of a fully functioning restaurant.

Michael Lorrigan is behind Café Two 14, which provides safe locations, financial support and mental health advocacy for veterans. There are six stores across Queensland, many in shopping centres, and Mr Lorrigan said constant Covid lockdowns and confusing messaging as to whether people were allowed into shops had made operating “near impossible”.

“We’re down about $2 million in revenue since the start of Covid and this year it’s hundreds of thousands of dollars,” Mr Lorrigan said.

He revealed revenue dropped a whopping 87 per cent almost overnight when Covid first hit last year and despite the assistance of JobKeeper, they had increased their debt by ten times and didn’t know how they would claw it back.

“How do you recover a $2 million loss in revenue over 18 months as a small business?” he asked.

“I got asked if we will survive another lockdown and my answer is ‘What is survival?’ Is survival operating but owing $300,000 to your landlord?”

Mr Alcock, who also owns neighbouring bottle shop Arcade Wine in Ashgrove and takeaway eatery Happy Days Food Co in the Gap, said he had been contacted by many local businesses in the same boat and believed serious financial aid was necessary if businesses were to survive.

But he said the $5000 business grants being offered by the Queensland Government were “an insult”, while the refund on liquor licensing fees was insignificant and the deferral of payroll taxes was just postponing the problem.

“We lost $30,000 of revenue, we will get $1500 back for liquor license and maybe the $5000 payment, but what’s that going to do?” he said

The Queensland hospitality industry is calling for more government support due to the financial toll of snap lockdowns. Picture: Jono Searle

Instead he wanted tax relief from the ATO and to see businesses paid by the state government to reopen after lockdowns.

“What the government should do is look at everyone who has been forced to close, look at a proven amount of loss revenue and pay like 50 per cent of it, otherwise no one is going to make it if these lockdowns keep happening,” Mr Alcock said.

While Mr Tantulli called for GST to be dropped for restaurants, and for Fringe Benefits Taxes to be scrapped so more businesses would use local eateries for meetings and functions.

While Mr Lorrigan said the government needed to introduce a set of standard operating procedures to deal with Covid outbreaks and support small businesses.

“It’s mind boggling to me that there’s not a Covid team in play that have policies and procedures in place to protect small businesses,” he said.

“I know personally of six business that are going under or have gone under from lockdowns.”

And Mr Alcock said unless the issue was addressed fast, Queensland’s burgeoning food scene may be roasted.

“There’s going to be tragedy out there in hospitality. There’s going to be for lease signs everywhere,” he said.