Why Australia’s Hospitality Industry Is Booming

Located in the middle of the Pacific and Indian oceans, it boasts of beaches that tourists love to visit. The hospitality industry in Australia has never been better. This isn’t just mere saying as research data are available to back up the claims. This boom has given rise to hotel and restaurant constructions –and this has been the order of the day for the past two years. With all the structures in place, tourism spending is estimated to hit $167 billion come 2025.
At the forefront of this growth are the cities of Melbourne and Sydney. Tourists from different parts of the world troop into these cities on a regular basis to have a taste of their many hospitality offers. Hoteliers in these cities are working tirelessly to create more rooms to accommodate the increasing number of international visitors. Plans are in the works to create 9000 new rooms in cities across the country. The closest boom the country experienced to this was during the Sydney Olympics. As a result of the games, 7500 rooms were created from 1998-2000.
This boost isn’t unrelated to the comfort and reception tourists receive during their stay in the cities. There’s a variety of side attractions to ensure that tourists have a memorable experience. In 2016, the amount in hotel transactions rose up to $1.7 billion in the first nine months. Such an increase has attracted a lot of investors especially from China and Asia.
Traffic of passengers to and from Australia rose to 34.9 million in 2015 from the 33.1 million which was recorded in 2014. In ensuring that this growth is sustained over the years, the Central Sydney Planning Strategy has outlined 10 key ideas for the city to adapt to the growth in the next 20 years.
Dining plays a significant role in the hospitality boom. Australians love good international cuisine– and this rubs off on their hospitality. Being able to grab good food at popular restaurants easily helps tourists to feel comfortable and save some money from the often over-priced hotel foods. Trying out new meals is also part of the travel experience. Tourists get to taste new delicacies that aren’t available in their countries. Barbecue tops the list for food lovers in the city. Tourists are sure to find tasty steaks prepared with professional catering equipment in Australia’s metropolitan areas. Locals in the city are seen making barbecue in many areas at affordable prices.
Hotel accommodation is also a vital factor. There are different hotel accommodation packages in Australia to accommodate different classes of people. The city has since passed the 100,000 room mark in 2016. An additional 4000 rooms was added in 2017, with more 5000 rooms to be added this year. These rooms are designed to appeal to millennials who make the bulk of international travellers.
Hotel developers are making good use of landmass and saving cost by constructing existing buildings to hotels. An example of this is the elegant QT hotel in Melbourne which was constructed from a cinema. The past year has seen the construction of world class hotel buildings like the Doubletree by Hilton, the InterContinental and the very first Aloft hotel.
Airports in Australia are a central point for hotel development as one night precincts are being transformed into aerocity accommodations for visiting international tourists.

How Much Does It Take To Open A Restaurant In Australia?

When compared to other kinds of businesses, the opening cost of a restaurant is pretty considerable. But, you cannot start a restaurant below $100,000 as you need to bear a lot of start-up costs and expenses. Careful budgeting is necessary to make the most out of the start-up fund. Besides the start-up cost, you need to have the capital for six months or about a year down the track. Without proper funding and resources, your restaurant is sure to fail. In fact, the revenue growth of most businesses is slower than what is expected before opening the restaurant. This is why more capital is needed to bear the expenses.

Anyone looking to open a restaurant must set out the budgeting schedule to buy the items that are needed. It’s helpful to purchase used accessories and items if you are too concerned about how much are restaurant start-up costs. Finding a good building for your restaurant and ensuring that it meets the needs as far as location, zoning, space, and kitchen setup is not a step to take lightly. The cost of setting up can again vary as per the location and whether you are willing to rent a property, buy a property or to build the restaurant from scratch.

How to determine the cost of starting a restaurant?

The ones who have no idea about the cost of starting a restaurant can use a financial projection automated tool to find out the capital needed at every stage of a start up. The software, designed only for restaurant purpose, will give answers to all your questions relating to the cost.

Cost considerations to be made

When starting a new restaurant, the following cost considerations have to be made:
Lease: If you’re leasing a property, be sure to take into consideration the monthly payment to be made, the advance deposit which is required. This can be a few hundred dollars or cost equivalent to the rent for 6-12 months.

Restaurant equipment: You may either buy the restaurant equipment or rent them. Some of the restaurant items include: Commercial fridges Sydney, benchtop equipment, Pizza ovens for italian restaurants, kebab machines, etc.

Beginning inventory: Food, beverage and liquor costs need to be established. It is good to establish rates and payment options as soon as possible with vendors to assure you’ll have your shipments on time and with the correct products.

Renovation cost: When you acquire property for the restaurant business, you may need to change interiors, and the lighting fixtures, carry out painting and rewiring, undertake re-plumbing preferably with an affordable plumber Sydney and shelving.

Permits and licenses: Be sure to keep aside some money to cover the costs relating to health permit, license, and taxes to be paid.

Make your restaurant business successful

If you can serve delicious food items for all seasons whether it is summer, spring, fall or winter, your business will be successful. While menus don’t necessarily need to change per season, it may not be a bad idea to start experimenting with a few items and measure their appeal and customer feedback.

When it comes to winter menu ideas, including warm drinks and beverages can help to add a seasonal flair to your menu appeal. Coffee cocktails, apple cider, and hot cocoa can keep the guests happy and warm.

An In-depth Analysis on the Effects of the Sunday Penalty Rates Cut in Australia 2017

Sunday penalty rate is the minimum pay rat paid to employees working on a Sunday.

Background Information
On Monday, 5 June 2017 at 2pm, The Fair Work Commission Australia’s national work place relationship tribunal decided to slash Sunday penalty rates for Hospitality, Pharmacy, Fast food and Retail employees.

Various employer organisations and industry lobbies led by The Australian Industry Group had lodged a complaint with the Fair Work Commission pleading that the commission should reduce the Sunday penalty rate to match the Saturday rate claiming that the rates were unfair and irrelevant. After hearing from all the parties, the Full Bench determined that there should be a phased reduction over the next four years starting on 1 July 2017 until the year 2020.


The phased reduction by industry takes effect as summarized below:


Retail industry full-time and part-time employees will have their Sunday rates reduced by a whopping 50 per cent over a four-year period from the highs of 200 per cent to the lows of 150 per cent.
On the other hand, casual employees will have to make good with a 25 per cent reduction from the current 200 per cent to 175 per cent stretched over a three-year period.

Fast Food

Over a two-year period, fast food level one full-time and part-time employees will have their Sunday penalty rates reduced by 25 per cent from 150 per cent to 125 per cent and 175 per cent to 150 per cent for casual employees.
No cuts for level two and level three fast food employees.


Full-time and part-time hospitality employees will have their earnings slashed from 175 per cent to 150 per cent over a two-year period.
Casual hospitality workers Sunday rates remained at 175 per cent.


Full-time and part-time Pharmaceutical workers working between 7am and 9pm will have their penalty rates reduced by 5 per cent in the first year and 45 per cent over the subsequent three-years and 225 per cent to 175 per cent for casual employees over the same period.

Interested Parties Submissions

Labor union bosses believe that the Sunday penalty rate reduction will negatively affect a significant percentage of the Hospitality, Fast food, Retail and Pharmacy employees.
However, the Council of Small Businesses argued that big businesses employees 80 per cent of workers with enterprise agreements and they will not be affected by the ruling.
The Full Bench was persuaded by the claims that the current Sunday penalty rates had made doing business unsustainable stating that by cutting the Sunday penalty rates they will spark employment in the affected industries.

Going Forward

With the Sunday penalty rates effected, small business owners are rejoicing. It means that the cost of doing business will significantly reduce while the margin of profit expands. Nevertheless, there might be a spike in employment levels in the short-term but it is uncertain whether it will be sustained. However, it will be more affordable to buy expensive commercial combi oven Sydney, which restaurants require to operate.
As highlighted with the changes above the big losers in this debate are the workers, as they will have to do with less than they used to. It might take a toll in some households but the sooner you get across the changes the better.

Different ways to finance your restaurant

With over 945,000 restaurant locations in the United States (70 percent of which are independent restaurants) the restaurant industry is a booming part of the private sector. Restaurants in the United States employ over 13 million people, and annual restaurant sales total $558 billion. This is a significant amount of money, but restaurant owners are aware that it takes lots of funds and financing to produce a profit.

Finance & Lease example:

For $10,000 worth of restaurant equipment you only pay $89 per week – that’s only $62 per week (after your Tax benefits!) That’s not much to pay to get what you want to run your business, especially when there’s nothing to pay upfront. In fact you only start paying one week after (not before) your items are dispatched.

With RentLite-Fast and Easy Finance you can apply in store (or over-the-phone) in just a few minutes. Let’s keep it simple…have your ABN, Driver’s License, and Medicare card handy-that’s all you need to apply. Please note that you may be required to provide additional information as part of your application’s assessment.

RentLite example

• Fast and Easy Finance for all businesses including start-ups, new businesses, as well as businesses without company financials.
• Apply in store (or over-the-phone) in just a few minutes.
• $0 Upfront – No Security Bond, No Deposit, and No Documentation Fees.
• Finance from $500 up to $250,000
• Own your equipment over a one, two, three, or four-year term.
• Affordable weekly repayments that are 100% tax deductible*.
• Include the cost of extended warranties and preventative maintenance.
• RentLite the cost of freight (with the equipment) to anywhere in Australia.
• Additional equipment can be included at any time as your business grows.
• Rent-Then-Own your equipment for $1.00 at the end of term.

Merchant Loan

Just like all other types of merchants, restaurant owners want the best for their businesses, and sometimes this can require money that the restaurant owner does not have on hand.  One of the attributes that make restaurants so unique is their offering of goods, services and sometimes entertainment all under one roof. A restaurant that provides an enticing atmosphere, friendly service, and quality meals is almost guaranteed to bring in customers and make sales. Unfortunately, funding such an affair can be a difficult task.  A merchant loan can supply restaurant owners with the funds they desperately need, but struggle to attain. One type of merchant loan that is especially practical for restaurant owners is a merchant cash advance. A merchant cash advance can be used in many ways, from helping a struggling restaurant to maintain during a period of slow business, to financing the grand opening of a new location for an already existing restaurant.
Restaurants have daily costs that are typically higher than other types of merchant businesses. And often, a restaurant’s gas water and electricity bills will reflect the inevitable usage of items such as dishwashers, refrigerators, freezers, ovens, and stoves. A merchant cash advance can be used to maintain these payments during times of decreasing sales, helping to keep the restaurant afloat until sales increase.

Also unlike other merchant businesses, restaurants purchase perishable goods. This means, if all of the products that are purchased are not used within a period, they can go bad, causing the restaurant to lose money. A restaurant owner can recover that lost money through a merchant cash advance. There are many other ways to put a merchant cash advance to use as a restaurant owner. It can be used for expansion, to finance promotions, or to purchase inventory such as utensils, dishes, cookware, or even food and drinks. You may want to try offering a new meal; a merchant cash advance can fund the purchase of the additional goods. Are you looking to open a new coffee shop and start the cafe fitout process?

How does it work?

Merchant cash advances are formulated to work based on a business’ credit card sales. Therefore, if your restaurant accepts credit cards, you are one step closer to being eligible to receive a merchant cash advance. When the merchant cash advance is given, a small percentage of the restaurant’s sales is taken as repayment for the loan. Therefore, the more customers use credit cards, the faster the merchant cash advance is repaid. This is particularly advantageous for restaurant owners as based on a survey conducted by the National Restaurant Association in 1999, restaurants with average per-person dinner checks of $25 or more report[ed] credit-card use representing a median of 80 percent of sales, and by 2002 this number had increased. Also as the percentage of people who own credit cards increases so does the usage of credit cards in restaurants.
A merchant cash advance is easily available, and if you meet a few simple requirements, many lenders are willing to provide a merchant cash advance to finance your restaurant.