There’s been nearly a 30 per cent (28 per cent) decline in premium and fine dining venues since January of 2022, according to data from ResDiary.
Diners are now choosing mid-range venues such as pubs and cafes during these tough economic times, now accounting for nearly half of all bookings (48 per cent) of all bookings in Australia, up nearly 10 per cent from 37 per cent.
In an effort to understand the macro impact of inflation, interest rate increases and the general rising cost of living on the hospitality industry, ResDiary has mined the data on bookings since the beginning of 2022.
Stefan Overzier, APAC head of Customer Service and Support, said the insights showed that people are still enjoying eating out, but are choosing casual over premium options.
“The data shows Australians still have the desire to head out and enjoy a good quality meal, however we can see people choosing mid-range options, and are experiencing ‘bookers remorse’ for higher end venues as they cancel plans a higher percentage of the time,” said Overzier.
“But it’s not all doom and gloom, your local pubs and cafes are the big winners with an increase in bookings overall.”
Publican at Dove & Olive said the quality of food is now more important than ever as people are seeking to make the most of their dollar.
“This years trade is stronger than last year, we sell good quality pub food at reasonable prices. Being a mid-range venue gives us an advantage over some other hospitality venues as customers are seeking lower price meals,” said Overzier.
Here are ResDiary’s top insights into the impact the current economic climate is having on the industry.
1. Mid-range venues win in the cost-of-living war
Mid-range venues such as pubs and cafes are busier than ever even during these tough economic times now accounting for nearly half (48 per cent) of all bookings in Australia, up nearly 10 percent from a 37 per cent share of bookings in January 2022.
2. “Bookers remorse” rise in cancellations for fine-dining venues
The findings reveal that while venues at the top end of town have suffered a rise in cancellations, the more casual style dining venues with a medium price point have not.
Fine-dining venues saw an 88 per cent increase in cancellations between May (the start of interest rate rises) and October 2022 (just prior to the Christmas season) compared to dining venues with a price point of $61-80 which have a significantly lower increase in cancellations of 13 per cent.
Venues with a lower price point; casual dining, pubs and cafés had a decrease in cancellations from May to October 2022.
Additionally, venues with the lowest price point of under $20 have become less necessary with diners cancelling nearly four times more during May and October 2022.
3. Interest rates go up, booking numbers go down
Booking data has shown that there was decline in the number of bookings after a continuous streak on raised interest rates.
Since May, the RBA has increased the cash rate from a low of 0.1 per cent to 3.6 per cent (that’s the highest since 2012) to combat inflation. A month after the first interest rate rise in June, ResDiary’s data revealed there was a 9 per cent decrease in the number of bookings across most venue types.
With inflation reaching an all-time high of 7.8 per cent in 2022, it is unsurprising to see a decrease in bookings from February 2022 to February 2023 across most venues.
The only venue category not affected by interest rates? Pubs and cafes. With their booking numbers remaining steady throughout the second half of 2022 and into 2023 despite the economic crisis. Diners are still heading out but preferring those venues with a lower price point of $21-$40.
4. Gone are the days of spur of the moment bookings
A key stand-out trend over the last year has been an increase in booking lead times with Australians booking an extra 2.2 days in advance in February 2023 compared to February 2022. Diners are planning ahead of time and choosing to dine out more for those special occasions rather than a last-minute booking.
For guidance on inflation from ResDiary, visit their website here