2024 Australian Hospitality Industry Statistics

View ResDiary's 2023 Hospitality Statistics here. and further hospitality statistics here. 

Despite Australian's increasing their spending across all sectors, 2023/24 saw a changing domestic economic landscape in Australia that has contributed to hospitality industry challenges.

Just as the industry continues to grapple with the post-pandemic world and the economic influence of international conflicts, rising inflation and the "cost of living crisis" has put downward pressure on household incomes, forcing Australians to pull in their belts and penny pinch their way through.

With industry data showing a fluctuation in recreational spending habits, how can the hospitality industry pivot in the years to come to strengthen the resilience of the sector?

2023 into 2024: Looking Back to Move Forward

Looking back at 2023 moving into the start of 2024 the hospitality industry in Australia faced unprecedented challenges amidst a backdrop of global turmoil and domestic economic strain.

The Cost of Living Crisis

The cost of living crisis reached its peak during this period, with inflation soaring and prices of essential goods sky-rocketing. Families struggled to make ends meet, leading to a significant decrease in discretionary spending, including dining out and travel. The Consumer Price Index (CPI) rose 4.1% over the 12 months leading up to December 2023 with significant price rises for some basic services but also touching on holiday travel and accommodation.

Simultaneously, international conflicts and geopolitical tensions escalated, impacting tourism and foreign investment. The uncertainty surrounding global stability further dampened consumer confidence and hindered the recovery of the hospitality sector.

The Housing Crisis

The housing crisis exacerbated the challenges faced by the industry, as housing affordability reached alarming levels. Many Australians were forced to allocate a larger portion of their wages towards housing expenses, leaving less money for leisure activities such as dining and travel.

Amidst these economic hardships, the Australian economy experienced sluggish growth, characterised by high unemployment rates and stagnant wages. The hospitality sector bore the brunt of these economic woes, with businesses struggling to stay afloat amidst rising operating costs and reduced consumer spending.

The Ongoing Pandemic Effect

In 2023 and 2024, the hospitality industry continued to grapple with the lingering effects of the pandemic. Despite efforts to adapt to new health and safety protocols, businesses faced ongoing challenges such as staffing shortages, supply chain disruptions, and fluctuating demand.

1. Consumer Spending Trends

In examining consumer spending trends within the hospitality sector for 2023-24, the trajectory set in 2022 continues its upward momentum. This translates to increased consumer expenditure, notably within the hospitality domain. In 2023, the annual revenue for cafes, restaurants, and takeaway establishments nearly hit $64 billion.

Taking into consideration the current economic climate some people are spending more in 2024 with the Australian Bureau of Statistics (ABS) reporting that household spending habits increased from 2.0% in December 2023 to 3.4% in January 2024 for hospitality, specifically hotels, cafes and restaurants.

Hospitality industry statistics indicate a rise in household spending in the hospitality sector aligns with broader economic indicators. This suggests an overall improvement in consumer confidence and financial stability. As disposable incomes increase and unemployment rates decline, individuals are more inclined to indulge in leisure activities such as dining out and staying in hotels. The shift towards discretionary spending signifies a positive outlook for the hospitality industry, with businesses poised to capitalise on the growing demand for experiences and services.

2. Demographic Trends

For a deeper comprehension of Australia's hospitality sector data, it's essential to delve into demographic trends. As the economy bends and sways with the pressure of international conflict, market instability, and inflation, the Australian hospitality industry needs to remain nimble.

We examine three demographics that are affected by economic conditions and social trends which can have the biggest impact on how restaurants and cafes operate, from their branding to their business bottom line.

Age

While the rising cost of living affects people across all generations, its impact varies among different age groups. Younger individuals who are just starting their careers often feel the brunt of the rising cost of living, as they strive to establish themselves and achieve financial stability. With entry-level salaries and student debt to contend with, they may find it challenging to keep up with increasing expenses for housing, groceries, and other necessities.

On the other hand, older adults who are nearing retirement may also face difficulties as they try to stretch their savings and pensions to cover rising costs.

According to Generation

In 2023 Frollo reports that although costs were rising in some sectors, hospitality spending for GenX increased the most in Australia - spending more than 46% more on hospitality services. Millennials also increased their spending in this area which was up by 38% on the previous study. With other significant increases in household non-discretionary spending in areas of health and fuel, the other generational groups have curbed spending habits.

The Social Economy

With the underlying cost of all basic food products increasing across the board, and with the impact of transport costs, its unsurprising that the cost of dining has also risen sharply in alignment with the cost of living impacts on all Australian's in 2023/24.

90% of Australian's who dine out regularly reported that having a range of budget menu items was important to them in the 12 months to June 2023. Showing that while dining hasn't necessarily stopped for these people, they are looking for more wallet friendly options.

Inflation

Fine dining restaurants have taken a hard hit with inflationary pressure indicating the reason for a 20% decline in bookings since January 2022, specifically between May and October cancellations at fine dining restaurants increased to 88%. In the twelve months from February 2022 to 2023 there has been a reported decrease in customer bookings for all restaurants where consumers are spending an average of more than $40 per customer.

Discretionary Spending Habits

Australians are thinking more closely about where they are directing their dollars and data indicates that they are making deliberate alterations to their discretionary spending habits in their budget. A recent survey revealed that around 4 out of 10 consumers were actively making adjustments to:

• reduce the number of lunches and coffees away from home.
• cutting back on entertainment, such as going to the cinema.

It was also found that around 1/3 have changed or scaled back holiday plans and cut back on ordering food through delivery apps.

Dietary Preferences

The shifting pallet of Australian diners can move fast in our global and unashamedly hedonistic society. This can affect hospitality operations from menu to atmosphere, and can direct your marketing spend to find new and emerging audiences.

Flexitarians, Vegetarians, Vegans, Pescetarians and Meat Eaters

People can get passionate about what they ingest into their bodies and this can be a make or break for restaurants to find the niche that suits their skills, interests, and desired consumers. A recent study by YouGov Surveys shows that 66% of Australian's consider themselves meat eaters, 19% flexitarians (primarily eat plant-based foods, but still eat meat and fish) and only 6% of consumers are vegetarian (exclude meant and fish from their diet) and vegan (excluding all animal products), 5% identified as pescetarians (don't eat meat from land animals, but eat seafood).

If we break these hospitality industry statistics (Australia) down across age demographics, while meat eater's are dominant in all generational descriptors there are less Baby Boomer's who identify otherwise. There is a sense that the sentiment for meat declines with the generational shift.

Cuisine Popularity by Dietary Preference

The survey also ranks the cuisine that these demographics opt for when choosing their dining destination:

• Australian's love their own cuisine at the top of the list, followed by Italian, Thai, Chinese and Indian.
• Australian cuisine ranks highest with pescetarians and flexitarians, and is in the top five for meat eaters and vegetarians/vegans.
• Pescetarians and flexitarians rank Italian cuisine as their favourite, and it's in the top five for both meat eaters and vegetarians/vegans.
• Thai food is third ranking for the pescetarians, flexitarians, vegetarians/vegans, but fourth for meat eaters.
• Meat eaters love Chinese cuisine, however pescetarians put it at number five. Flexitarians and vegetarians/vegans put it even further down their top ten list.
• Unsurprisingly, Indian cuisine is ranked as number one for vegetarians/vegans, but it didn't hit the top five for meat eaters and flexitarians and wasn't ranked in the top ten for pescetarians.

3. Booking Trends

Accommodation and food services industry forecasts depend on past industry data to plan their future, and their expected ability to apply their seasonally adjusted analysis for the next few years.

Whether a food service decides to incorporate additional takeaway food services to their restaurant product range may have the potential to significantly impact their next five years in business, for positive or negative.

So when consumer trends forecasts are moving with sky-rocketing inflation, the market size of the consumer segment that venues are looking to access will impact on their bookings directly.

Nimble Solutions for Booking Retention

To exceed the industry's success of pre pandemic levels, when travel restrictions created a depression in hospitality businesses' revenue, and drove industry employment levels to an all-time low, all sectors of the industry should leverage trends and data to increase bookings.

However, from pubs to the resorts market, to the niche cafes in the regions, being nimble in the accommodation and food services industries has never been more challenging.

The "Influencer Diner"

As of March 2023,  food and drink services industry data collected by diner type highlights a segment which, if wooed can make a vendor's year in publicity, but can conversely break a good reputation for minor indiscretions or misunderstandings. At 10% of the consumer pie, the "Influencer Diner" is a force in the market.

Public Holidays

Traditionally gazetted public holidays are a booking bonus for the restaurant scene and hotels alike, and five years ago our pre-pandemic sensibilities were to get out and indulge ourselves - but the world has caught up with our habits and public holidays recently haven't had the silver lining they once promised.

Data by ResDiary shows that spend per head has dropped for all public holidays in 2023 except for on Easter Sunday, which is slightly up from 2022 and is not traditionally one of the big spend days. Yet, curiously public holidays record the most popular venues on all the days combined are Casual Dining establishments ($40-$60) and Sophisticated Dining venues ($60-$80) in 2022.

4. Technological Trends

Technology including online bookings, contactless payments, social media, and digital point of sale systems are increasingly becoming adopted by hospitality businesses and the resorts industry. These tools help provide convenience to the consumer user experience but also ease booking stress experienced from lean employment levels in the industry, still in recovery from past international tourism restrictions.

Industry Wide Digital Skills Gap

Torrens University writes that the main barrier to the uptake of technology in venues is an inability to overcome the digital skills gap. While many venues have incorporated contactless payments to their business, digital literacy is not usually a core skill for hospitality employees with only one in three staff having technology experience.

A Technology Niche

Despite the potential for technology to increase revenue for venues such as pubs, hotels and food service outlets - further analysis shows that industry operators have difficulty in finding niche digital transformation professionals. Finding expertise with the inherent understanding of the complete user experience that customers and employees should expect from venues offering industry first solutions is challenging.

Seventy per cent of businesses operating restaurants and food services, hotels and accommodation, and adjacent businesses report difficulties in identifying skilled technology services catering to hospitality businesses. 

5. Food Services Monthly Revenue 2023

While revenue taken by cafes, restaurants and food services retail outlets has performed strongly month on month since December 2022 ($5,203.8 million), rising to a high in August 2023 of $5,411.1 million, the lead in to Christmas saw spending habits in hospitality sharply decline. This is largely thought to be coinciding with increases in the cost of living and soaring housing affordability.

However, January brought a modest bounce back with the Australian Bureau of Statistics reporting housing spending for hotels, cafes and restaurants rising to 3.4% (up from 2.0% in December).

6. Sales by States & Territories

In addition, the break down of calendar adjusted discretionary spending also showed an up-tick of spending trends in the Australian hospitality industry, in every state but NSW which showed only a slight decrease.

• NSW: Spending decreased by 0.5%

• VIC: Spending rose by 5.6%

• QLD: Spending rose by 4.9%

• SA: Spending rose by 5.3%

• WA: Spending rose by 5.4%

• Tas: Spending rose by 3.7%

• NT: Spending rose by 7.5%

• ACT: Spending rose by 6.0%

7. Diner Interaction

While Australian's have been struggling to maintain their dining out lifestyles, they have also asserted themselves to demand and search for the best services and experiences to spend their hard-earned cash. Any wrong steps to hinder their expected experience will be met with boycott and revenue will not flow to businesses that are publicly be seen as "under performers".

Statistics collected of leading issues experienced by customers at restaurants and cafes over the 12 months to June 2023 illustrate the diner behaviour that will leave venues with reputation damage.

Good Staff and Training the Key to Success

The data at the top of this list could be indicative of the issues in the employment of skilled workers given 40% of customers complained of a lack of, or poorly trained, staff.

If you are looking for ways to improve your customer experience and reduce the burden on staff, book a personalised demo of ResDiary today.

Frequently Asked Questions (FAQ's)

How Big Is the Hospitality Industry in Australia?

In 2023 aggregating the size of the hospitality business sector requires some detailed analysis across a couple of different industries that overlap the food services industry (which may or may not include the resorts industry and hotels). While customers may enjoy a range of services to access accommodation and food services in Australia, we can look at venues such as restaurants for analysis of their booking and employment data to get a feel for how the different industries pull together across all types of venues to rise as a prominent employment provider to many citizens in Australia.

Takeaway Food Services

In operation
26,170 venues

Turnover between $20,000 up to $2m
14,436 venues

Cafes and Restaurants

In operation
54,285 venues

In operation by state
NSW: 19,206
Vic: 16,869
Qld: 8,909
WA: 4,173
SA: 2,748
TAS: 1,064
ACT: 1060
NT: 248

Turnover between $20,000 up to $2m
33,317 venues

Employment size range
Non-employment businesses: 10,746
1-4 employees: 20,569
5-19 employees: 18,279
20-199 employees: 4,528
200+ employees: 164

Pubs, Taverns and Bars

In operation
7,009

In operation by state
NSW: 2,024
Vic: 1,503
Qld: 1,019
WA: 616
SA: 614
TAS: 175
NT: 71
ACT: 46

Clubs

In operation - 3,495

Is the Hospitality Industry Growing in Australia?

The hospitality industry in Australia has shown resilience and adaptability despite challenges such as economic fluctuations and the impact of global events like the COVID-19 pandemic. While there may be periods of growth, contraction, or stability depending on various factors including economic conditions, consumer preferences, and regulatory changes, it's essential to consult the most recent industry reports or analyses for the current status of the hospitality sector's growth in Australia. Find more hospitality industries data at the Australian Bureau of Statistics (ABS search).

How Does the Hospitality Industry Contribute to the Australian Economy?

In 2023, the hospitality sector continued to play a pivotal role in driving the Australian economy and providing extensive employment opportunities.

With a diverse range of establishments including restaurants, cafes, hotels, and bars, the sector contributed significantly to economic growth through tourism and local patronage. This vibrant industry not only generated substantial revenue through dining, accommodation, and entertainment services but also fostered employment for a wide spectrum of professionals, from chefs and wait-staff to hotel managers and event planners.

Through its dynamic nature and ability to adapt to changing consumer preferences, the hospitality sector remained a cornerstone of the Australian economy, fostering both economic prosperity and social vitality.

The Tourism Link

In 2024, the accommodation and food services and tourism industries in Australia remained tightly intertwined. Tourism drove demand for hospitality services, while the quality of hospitality offerings enhanced visitor experiences. This symbiotic industry relationship fostered innovation and collaboration, contributing significantly to the country's economic growth and prosperity.

If you're seeking avenues for your business to make a greater impact, not just on the Australian economy but also on your own success, arrange a personalised demonstration of how ResDiary can benefit your business today.