The 17-year-old Crabbe Hole cafe at Bondi Icebergs has abruptly shut, its closure largely attributed to some customers using a loophole to gain free access to the adjacent oceanside pool.

For years, Crabbe Hole customers not intending to swim were allowed through the turnstiles without paying the $10 pool entry fee. But that policy changed last year, when word spread on social media about a loophole for free entry to the “most photographed pool in the world”.

“We had mothers turning up with their kids in floaties saying they were just there for a coffee,” says Bob Tate, general manager at Bondi Icebergs Winter Swimming Club, which controls the site. “It became common knowledge you could get in for free.”

After 16 years of Crabbe Hole customers being waved in for free at the largesse of the club, Tate says the thousands flocking for a selfie or to create an Instagram post created workplace issues at a site.

Tate concedes the change in admission policy didn’t help trade at Crabbe Hole, which feasts on views over the pool and the ocean. The cafe’s owner, Andrew Crabbe, says the change had a profound effect on business: “I believe that the introduction of a cover charge for my customers to enter the premises has directly reduced my customer count and my turnover.”

A post on the cafe’s Instagram account earlier this week said: “End of an era folks. Thanks for coming for the last 17 years. It’s been a pleasure serving you all.”

Crabbe believed he had an understanding with management that Crabbe Hole customers could gain free entry to the cafe “in exchange for me paying for all fitouts on a management services agreement”.

Tate says Crabbe was given the opportunity to submit a list of names of regular customers who would continue to be able to gain free entry to the cafe, an offer he says Crabbe declined.

“Andrew’s been a great servant of the cafe,” Tate says. Indeed, Crabbe, a local actor who opened the venue in 2007, offered detour-worthy coffee, artisan-bread sandwiches and juices with postcard-perfect views. His departure has left a hole in the Bondi market the club will now step in to fill.

The club opens The 9th Lane Cafe on Friday, August 30. “We’ve offered the [Crabbe Hole] staff jobs,” Tate says.

There are no plans to allow free entry again, but Tate says the venue is exploring affordable options such as poolside-only memberships for people who might like to drink a coffee without a swim.

“We’ve always said that somewhere in all this is common ground,” he says.