Chippendale fine diner Jung Sung served its last buckwheat guksu this week. The innovative Korean restaurant has joined the bump in restaurant closures fuelled by a perfect economic storm of soaring interest rates, increased produce prices and rising staff wages.

“Every time there was an interest rate rise we’d see a 5 per cent drop off,” Jung Sung co-owner Dan Freene says.

“It’s trickier to run a restaurant now than post-COVID lockdowns, at least back then people had money in their wallets.”

While the rise in the national minimum wage from July 1 has placed more pressure on the business equation, Freene says recruiting staff can be equally taxing: “We’ve had a couple of nights where we couldn’t open due to staff [shortages].”

While the reasons behind closures vary between restaurants, high-end eateries such as Jung Sung, where the degustation menu with add-ons can hit $180-per-head, is among several casualties. The adventurous Ele by Federico & Karl served its last $225 degustation last month.

Experienced operators at some higher end restaurants to join Sydney’s hospitality opening bonanza over the past 12 months quietly concede the honeymoon period – the time when it’s difficult to snare a table at a hot new eatery – has dramatically shrunk.

When restaurateur Paul Shulte closed Kissuu restaurant in late May, one of the factors he cited was the sheer number of venues now eyeing a slice of the hospitality pie.

“There’s a lot of competition in Sydney. The balance of what we have in this city with the number of people here, compared to the rest of the world, is crazy,” he said at the time.

Freene plans to resurrect the Jung Sung format in a new form, squeezing an eight-seat omakase into a purpose-built area in sister restaurant Woo Wol, also in Chippendale.

“It’s an economic move, the fact we can run two restaurants in one is a major cost saving,” Freene says.

Tonci Farac, a 45-year veteran of the hospitality industry with a number of international and local successes including Wildfire at Circular Quay, argues the last time trading conditions were this difficult was after the 1987 stockmarket crash.

“I remember people changing the name of their venues from restaurant to bistro to cafe, then closing their doors,” Farac says.

In March, Farac also became a victim of the economic climate when his upmarket Seta restaurant in the CBD closed. The $6 million Italian restaurant had all the trappings of Sydney dining, with a historic building, top designer and Michelin star chef. It also had the misfortune of opening during the pandemic.

“COVID is responsible for so much of what we’re going through now. There’s been a snowball effect, with inflation, interest rates, the impact of [the] Ukraine war. Electricity prices are out of control,” Farac says.

“One of the ways government and the banks could help is to be more flexible with people paying interest only during this period. Hospitality is one of the quickest to be affected in these times, but also one of the quickest to revive.”