New figures reveal how working from home sees Sydney CBD suffer
Sydney’s CBD cafes, restuarants and bars are being starved of patrons. Business owners say the life of the city is at stake - and one day of the week is killing it more than any other.
NSW
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Two years after work from home rules were lifted, more than 100,000 office employees are still missing from the Sydney CBD on Fridays, starving city cafes and restaurants of the trade they need to survive.
New data reveals that on the critically important last day of the working week, barely half the number of employees are in the city compared to levels before Covid.
On Tuesdays, worker numbers in the CBD are now at 84 per cent of pre-pandemic levels, which is an increase from 73 per cent a year ago.
On Wednesdays there’s been a 14 percentage point improvement over the past 12 months, to 83 per cent from 69 per cent.
But on Fridays, offices are only 60 per cent as busy as they used to be, up just six percentage points on the same time in 2023, according to the figures from CBRE.
About 370,000 people were travelling to the city each day before Covid, based on Opal card train statistics. So the loss of 40 per cent equates to nearly 150,000 people. It’s believed that at least 100,000 would be white-collar workers.
“Sydney has improved a fair amount over the past 12 months – except on Fridays,” said CBRE’s Australian head of office research Tom Broderick.
Fridays are especially important to the hospitality sector, Mr Broderick noted.
“People are still dining out during the week but you spend more on a Friday if you are having a long lunch in the city” or going out for a drink after work, he said.
New data from Creditorwatch shows businesses in Sydney’s CBD are doing it tougher than those in any other state or territory capital – because rents and property prices are higher.
And the hardest hit industry is food and beverage, with one in every 11 expected to fail in the year ahead, according to Creditorwatch.
Australian Restaurant & Cafe Association CEO Wes Lambert said rents had risen 20 per cent in three years, wages were up 15 per cent over the same time and other costs of doing business, such as insurance, had also skyrocketed.
“Yet diners haven’t been willing to pay more for the food on the plate,” Mr Lambert said.
“That’s led to massive closures. We aren’t going to the wall. We are at the wall,” Mr Lambert said.
The life of the city was at stake.
“Sydney’s dining scene is the beating heart of the CBD,” he said. “We are in desperate trouble.”
Mr Lambert called for temporary payroll tax relief and the reinstatement of dining vouchers, echoing recommendations from Business Sydney in Saturday’s Daily Telegraph.
But a Minns government source said the state doesn’t have the cash to reinstate dining vouchers or offer a break on payroll tax.
Last month’s NSW budget forecast years of deficits.
Bean There cafe owners Georges Bechara and Severine Haykal are now pleased with the number of customers visiting their store early in the week, though not later.
“Friday is quiet because people work from home,” Mr Bechara said.
“The orders and revenue is less on Fridays. The rest of the week is okay.”
CBD voodoo-inspired bar Papa Gedes’ owner Michael Dhinse said since Covid, trade was unpredictable because of the sheer number of people working from home.
Mr Dhinse estimates he has lost 25 per cent of his profit because of it.
“There are genuinely fewer people in the city during the week.... if you go out tonight at 9pm there will be no one out,” he said.
“One night you could be busy on a Monday and dead on the Friday and the next it’s different, meaning it’s hard to roster staff.”
“Right now, the city has no vibrancy. People from the UK and US come into the bar and ask me what happened? The culture of the city has fizzled out,” he said.
“Ten years ago, the attitude towards me as a small business owner was congratulations but now people feel sorry for me. It’s like I have leprosy.”
Jim & Co Cafe barista Yudha Putra said business has gotten particularly quiet on Mondays and Fridays with many office workers no longer venturing into the CBD.
“Most people tend to work from home so they can have that long weekend,” Mr Putra said.
“It’s understandable but that makes the business a bit slower.
“Mostly Tuesday, Wednesday and Thursday is when we see more traffic.”
Mr Putra said workers choosing to stay home two days a week had made running the small business “difficult.
“It would be nice if people can go back to the office, to bring more people in and more conversations as well, especially with people drinking coffee.
“It would just be better. Hopefully in the future.”
The barista said fewer staff are being employed in the cafe on Mondays and Fridays. It is not only hospitality businesses that are suffering.
IPOH barber owner Sean Leong said it was “sad” that fewer people were travelling into the CBD.
“If more people go into the office, of course business will be better,” he said. “Friday is usually quieter.”
In North Sydney, Greenwood Hotel is trying to turn the trend around, shipping 50 tonnes of snow into the middle of the pub’s courtyard.
General manager David Monaghan said the venue put on its week-long Snow Festival each July as a fun way to entice workers back to the office during the winter months.
“With working from home still very popular among North Sydney corporates, it’s very important for us to showcase how much fun can be had when they make the trip into work during winter,” Mr Monaghan said.
“From wintry pub feeds for lunch through to friendly competitions and a DJ event to ring in the weekend, we feel we’ve got the perfect case for coaxing a trip to the office.”
NSW marketing executive Georgia Bounds suggested other small businesses try their hand at enticing foot traffic back by creating a “stand out from the crowd” event.
“Start by thinking about what periods in the year you experience a down turn in trade and build your event from there. Do something brand new,” Ms Bounds said.
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