‘Hold on to your hats’: Hospitality heavyweights brace for election amid record closures
Sydney restaurateurs including Golden Century’s Wong family, Neil Perry, Judy McMahon and Leon Fink discuss immigration, penalty rates and secrets to success.
Legendary chefs and restaurateurs including Neil Perry are “hunkering down and holding on to their hats” ahead of the federal election on Saturday as political promises on penalty rates and immigration threaten Sydney’s struggling hospitality sector.
“Elections always f–k things up,” said Perry at the Vittoria Legends Lunch, a gathering of hospitality veterans recognised by The Sydney Morning Herald Good Food Guide for their outstanding contribution to the industry over the years.
Perry was keen to talk politics with former Vittoria Coffee Legend Award recipients Leon Fink (Quay, Bennelong), Judy McMahon (Catalina), Lyndey Milan, Jane Strode, Guillaume Brahimi (Bistro Guillaume) and Eric, Linda and Billy Wong (Golden Century) at the event, hosted by Vittoria chief executive officer and long-time patron of the Good Food Guide Les Schirato.
The election comes at a critical time for the hospitality industry, in which rising costs and low profit margins contributed to a record 9.3 per cent of businesses (or one in 11) shutting down over the past 12 months, according to CreditorWatch.
“It worries me how many restaurants and cafes are closing,” Schirato said. “It’s not the cost of coffee [which rose to a 50-year high on the commodity markets this year] … it’s all the other costs: the rent, the labour … it’s insane.”
“Most of the people around this table have got longevity, and they’ve lasted, but they still have to work bloody hard to make it work.”
Penalty rates are front of mind for the group. Prime Minister Anthony Albanese attracted criticism from cafe and restaurant owners on Monday after he claimed businesses could afford to pay staff extra for nights, weekends and holidays without passing on costs to customers.
Judy McMahon, who co-founded Rose Bay restaurant Catalina with late husband Michael McMahon in 1994, said even surcharges couldn’t cover increased costs.
“[Opening on a public holiday] is a public service,” she said.
“My Easter is really soft, except for Easter Sunday, and I think it’s because we put a 15 per cent surcharge on. We have to, but even that doesn’t cover it, and people are not really prepared to pay an extra 15 per cent on top of what we already charge.”
In April, Labor promised to pass laws to prevent the Fair Work Commission from removing penalty rates for about 3 million workers on the basic wages, or awards, for their industries. The Coalition has opposed Labor’s proposed policy, but Opposition Leader Peter Dutton said he did not intend to make changes.
Dutton does, however, seek to limit immigration. Under the Coalition, intake of permanent migrants would be reduced by 100,000 people over the next four years. Labour also intends to decrease the number of immigrants from an intake of 190,000 to 185,000.
The hospitality industry, which relies on overseas migrants to fill skills shortages, faced a critical staffing shortage during the COVID pandemic, when border closures caused national population growth to slow to a near stand-still. While job vacancies have gradually declined in the years since, they have never returned to pre-pandemic levels, according to Jobs and Skills Australia.
“Sydney is a multicultural city, and we have an incredible industry that’s fuelled by immigration,” Perry says.
“If we stop immigration, we’re really stopping the essence of what Australia is all about.”
Hospitality groups, including Perry’s collection of restaurants in Double Bay, joined forces to found industry lobby group Australian Restaurant and Cafe Association (ARCA) in 2024. The group has also called on political parties to remove fringe benefits tax, freeze alcohol excise increases for two years and freeze income tax on tips.
Five tips to survival in Sydney's hospitality scene
Industry leaders shared their secrets to longevity in the cutthroat industry, in which one in 11 businesses have closed over the past year.
- Pursue consistency over passing trends
“A lot of the restaurants that are on trend are also the first ones that end up going out of business,” said Schitaro. Restaurants such as Catalina and Golden Century focus on delivering consistent quality of food and service, building a customer base of regulars which have returned with their children and grandchildren. - Don’t put off the pursuit of excellence
“You can’t just react and say, ‘shoot, it’s getting really hard now, I better be good’,” said Perry. “You have to be the best you possibly can be every day, so when the hardships come, people will come and spend their money with you because they know they’re going to get great value and create a memory and have an experience... You can’t manufacture that good will during hard times - you have to manufacture that during the good times.” - A dry venue is a safer venue
The group reflect on a time when the most expensive steak in Australia cost $40, and they worked hard and played harder. “That’s just not acceptable in restaurants anymore because bad things happen, and you can’t afford to have bad things happening,” said Perry, who does not permit staff to drink at his restaurants. “[As business owners], we are totally responsible for our staff now.” - Take advantage of tourism
Forty thousand tourists are expected to visit Australia when the British & Irish Lions rugby team tours in June, said Brahimi, who has already started to see a boost in reservations. “For six weeks, the whole hospitality industry will be booming.” The comparatively low Australian dollar makes it an attractive international destination: “I was talking to them about our prices, and they couldn’t believe it. It’s almost half price.” - Love it or leave it
“The work is really, really hard,” said Eric Wong, who co-founded Golden Century with wife Linda Wong 36 years ago. Day after day, the pair woke up and put in long hours to make their restaurant a success — Wong recalls the shifts when he’d break in the afternoon to sleep in his car before returning to work until 3am. “You have to love it, or you wouldn’t do it,” he said. More than three decades on, Linda said she still loves her work. “I get to be a part of so many special moments,” she said. - Passion is critical, but partnerships help
“What’s the special sauce - that little thing that makes you just want to go back to a place?” said Strode. “It isn’t necessarily that the food is good, or that the service is good, but it’s this feeling you know you’ll get every single time you go. That’s the special sauce, and we’ll lose that if there aren’t halfwits out there, with that deep need to create a place with feeling.” But get a backer, she advises, because they’ll help in making sound financial decisions.
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Bianca Hrovat – Bianca is Good Food’s Sydney eating out and restaurant editor.