Mum-and-dad hospitality owners struggling to manage time, fill vacancies

Hospitality creates the nation’s happiest small business owners, according to new research by American Express.

But there’s not much competition – with a third of all Australian small business owners fearing insolvency over the next three to five years.

The Economy of Shopping Small: Back Your Backyard report found the frequency of consumer spending with small businesses is declining.

The researchers say the finding highlights a need “for more support from the nation to save the future of small businesses, including the food and beverage industry”.

Despite being the most satisfied business owners out of every industry surveyed, with 62 per cent reporting to be extremely satisfied, small businesses owners within hospitality identified a number of pain points impacting their business.

The research found:

  • 42 percent of small businesses within the hospitality industry currently have job vacancies, with 33 percent stating that they are finding it harder than ever to find staff
  • Hospitality businesses are most likely to rely on family members to work full or part time within the business, 73 percent compared to 56 percent in general retail
  • 34 percent of business owners work longer hours than intended week to week
  • Just 18 percent have accessed government support in the last 12 months

While tourism may be booming across a number of sectors nationally, Australian household finances are under pressure from slow income growth – one possible factor in the decline in consumer spending.

Slow household income growth is driven by slow wage growth. The wage price index grew by two percent over the past year, which means it is barely keeping up with consumer prices. Growth in household net wealth has also weakened due to a slowdown in house prices.

Lisa Belcher, vice president of small merchants for American Express, said: “Small business owners in the hospitality sector are feeling the pressure, with many also concerned about staff shortages and working outside of their expected hours.

“It is more important than ever for Australians to support small businesses if they want to see them thrive.

Tequila Mockingbird, a Latin American Restaurant in Sydney, is supported by a mix of local and tourist trade.

Asked if he feels he is working harder and spending more to attract customers who are spending less, owner Michael Fegent said: “As more restaurants and bars open, competition is getting stronger so the key focus for us is to work hard to ensure we attract customers into the venue.

“ This does involve increased spending but doing our homework to ensure we get a profitable return.

“It also involves thinking of the long-term outcome instead of just the short term, cutting costs might save you money in the short term but in the long term it is not as possible.”

While Fegent says the business is tracking well with sales up by two percent year on year, attracting staff is an ongoing concern. 

“I would like to see the laws on immigration change to support more migrants entering the hospitality industry to find work,” he said.

“As time goes by there are less Australian and New Zealand citizens choosing to work in hospitality as a profession but on the other scale there are more restaurants and bars opening more than ever due to customers eating out more regularly each week, clearly showcasing a great need for more staff in this industry.”

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