You don’t have to be in the hospitality industry, or a food writer, to observe the enormous stress the sector is under right now. A stack of Adelaide venues closed last year. Among them 1000 Island, Fire x Soi 38, Chicken & Pig, Extra Chicken Salt, Crack Kitchen, Cocina Comida, Cheekies Hot Chicken, Kopi Tim and Zenhouse. Three of the Hills’ most beloved venues – Brid, Lost in a Forest and The Summertown Aristologist – shuttered over the holiday period. Last week Big Shed Brewing announced it has gone into voluntary administration; Italian institution Enzo’s revealed it would close its doors after 25 years; and The Ed Castle fell into liquidation – two months after reopening under new owners.

The closures have hit every corner of the dining scene. And while there isn’t a single common thread tying them all together, the industry (which already has small profit margins) is buckling under the heavy strain of inflation, rising interest rates and staggering staff shortages. All this while operators are still reeling from the fallout of covid.

We’re now years on from the pivoting and government support that kept businesses (barely) afloat during the height of the pandemic. And the droves of diners who came out in support of the industry back then have dropped off as they try to rein in their own spending to afford basics and rent increases.

Adelaide’s live music scene is in crisis too. After several closures, including Enigma Bar and Fat Controller, the state government announced a funding package for music venues, including $60,000 cash grants.

It’s a recipe for disaster for the industry – or an opportunity to innovate and change the model. Broadsheet spoke to several food and drink operators to get a temperature check of Adelaide’s hospitality landscape in 2024. (Answers have been edited for length and clarity.)

Jump to question:

• How are you feeling about the health of your business – mental, financial and so on?

•What about the health of the hospitality industry as a whole?

•How does the downturn from Covid compare to current cost of living pressures?

•How has your business adapted to inflation pressures?

•In such a challenging time for hospitality, what keeps you going?

•What’s your biggest concern for the year ahead?

•What are the major trends you think we’ll see in the industry in 2024?

Like a lot of CBD-based (and otherwise) operators, I feel we haven’t had a real break for four years. I’ve become used to having to work every single day on top of my usual responsibilities – just to keep on top of customer enquiries, and function and event management because we can’t dedicate an extra person during a downturn. I feel a lot of regret about not being able to commit more time and mental space to my family and friends, especially as my parents have age-related illnesses and I want to take better care of them without being physically and mentally exhausted. I really miss seeing the children of my friends and family grow up. – Emily Raven, co-owner, My Kingdom For a Horse, A Prayer for the Wild at Heart

It’s been a super tough year in hospo. Wages have gone up close to 14 per cent in 12 months and people are generally spending less, which has resulted in lower spend per head and total covers – a bad combination for everyone. This financial tightening puts pressure on the whole organisation, from casual staff to head office. For us it’s been important to try our best to balance the staff and the business’s needs. Like all challenging times, it forces you to become better and to improve. We have been forced to look at how we can become more efficient and effective and have started to look at data much more closely than we ever have before. We will be better for the challenge but I am anticipating another tight 12 months. – Oliver Brown, director, Big Easy Group, (Nola, Anchovy Bandit, Bandit Pizza & Wine, La Louisiane)

Salopian Inn is a busy business with a great team and gets supported really well by the local community. Mentally, after 10 years of being a co-owner, I feel a little softer and a whole lot more tolerant. I’ve realised that other people with much bigger restaurant empires and huge success worry about the same things I do. I always thought other people had their shit together. Turns out they don’t. I’ve realised I am not alone and asking for help and support from your team is the best thing you can do. – Karena Armstrong, co-owner and executive chef, The Salopian Inn

As Muni navigates through its second and a half year, we’ve encountered abrupt operational difficulties since last year’s second half. Being a small business deeply connected with local farmers, independent suppliers and our committed team, we face unparalleled economic and psychological pressures. This situation has forced us to question the viability and value of the traditional fine dining model in the current trend. – Mug Chen and Chia Wu, co-owners and head chefs, Muni

I think a significant number of operators are finding it tough at the moment. We have been incredibly lucky here at Pastel because we’ve engaged with such a vast demographic of people and that has kept us moving forward and kept us trying new activations to create memorable experiences for our guests … because at the end of the day that’s the entire reason we are even here. If a venue’s number-one priority isn’t the customer then well ... they’re operating for the wrong reasons. – Dan Vaughan, co-owner, Pastel

As an operator of two venues, we’re feeling quite optimistic. We wanted to develop solid foundations for both businesses early to ensure longevity and avoid any trends or ‘fads’ that would last anywhere between 18–24 months. Our aim for our businesses is [for them to] become industry institutions, offering stability and options without constant reinvention. We understand our strengths and maintain our identity, which resonates with customers. Our commitment to being accessible, coupled with our consistency, has helped us retain customer loyalty. – Wilson Shawyer, co-owner, Good Gilbert, Good Burger

At the moment I’m feeling pretty good. The timing of me introducing food and the program of short-term chef residencies created some excitement in an otherwise slow period (winter) and that has travelled through into summer nicely. I’m always wary of what is coming though, and as always will be dreading when this winter comes around, which definitely takes its toll financially and mentally. The fear is that if you don’t keep reinventing or coming up with a new concept to stay relevant among regular new openings then you will fade into the distance. But I think at this point with Loc I need to be comfortable and happy with what the offering is and know that there will always be ups and downs in trading. – Olivia Moore, owner, Loc

While some strong operators are still bringing projects hatched during Covid to fruition, I doubt very much small operators will be looking to expand for a while. It’s basically, ‘batten down the hatches’ as we see competitors quietly (or loudly) call it a day. Business is still heavily affected in the Adelaide CBD with many people working from home on Mondays and Fridays. Some of our customers are regretfully spending less with us. I understand their pain on pricing, but I feel it’s not well understood that the cost of operation has also increased very dramatically for us in hospo, and we’ve had no choice but to absorb that extra 15 per cent in operational costs because increasing prices is extremely sensitive at the moment.

Inflation has affected costs in the business on a big scale – the biggest cost being labour. In real terms, that has jumped more than 12 per cent in under two years with record wage increases and the increase to the superannuation guarantee. The food cost is actually the smaller component of what the customer pays. Are those wage increases high? I don’t think so. There is absolutely nobody in hospitality who is being overpaid because those wage increases have been immediately sucked into increased cost of living expenses for staff. Finding somewhere affordable to live is currently a serious issue for many of my team. – Emily Raven

Hospo is hurting. Everyone I have spoken to in the industry is saying the same things: lower revenue, issues balancing service styles, and increased wages. Most operators are telling me they are anywhere from 15–30 per cent down year-on-year. This is evident by the number of closures of great venues across the nation. – Oliver Brown

There is such vibrancy in the Adelaide hospitality community. A level of resilience that I find really comforting. Is hospitality in a bit of a pickle? Absolutely – costs have really shot up and menu prices stay the same. Covid gave us all the confidence to move away from servitude and own service and being a service industry. Leaning into that and being clear with customers around costs opens up helpful conversations. – Karena Armstrong

To keep our restaurant running, treat our staff fairly, pay bills on time and offer experiences at affordable prices, we’ve invested immense time and effort. This has left little room for the personal wellbeing of us as owners. Conversations with fellow small business owners reveal a similar plight across the board. We’ve pondered whether the fine dining model remains viable or valuable under current trends. – Mug Chen and Chia Wu

The current state of the hospitality industry is heartbreaking, and witnessing the struggle of fellow operators is very difficult to see. We feel very fortunate with our business model and have learned the importance of patience and avoiding knee-jerk reactions, such as radically cutting staff and trading hours, which directly impact consumer confidence. If our consumers start seeing businesses changing their business models, they get concerned and the whole outlook becomes a negative cycle. Despite the challenges, it’s crucial to persevere, focus on improvement, and ensure any price adjustments are matched by the quality of service and the ambience of the venue. Maintaining high standards is essential for weathering this storm. – Wilson Shawyer

I think the conditions have been brutal for everyone. Business owners are learning to adapt, but the conversations I have with people are similar – a lot are struggling, mentally, if not with trade. Even if it’s just fatigue of the unknown. Covid, cost of living, the next incoming problem … it’s hard for people to maintain positivity. – Olivia Moore

I think we all held our breath during Covid – I worried about loved ones and business survival but some of the Commonwealth schemes put in place to fund apprentice training were truly inspired and motivated me to look at how we structured training and succession planning in the business to arrive at an ultimately more effective model. Now that all of that has ended, we feel a bit forgotten. Affordable and easy to manage traineeships and apprenticeships are essential for our industry to remain skilled and affordable. – Emily Raven

One word. Workcover! We had support in Covid, it felt like we were actually being considered and looked after. Now it feels like we have been left to wither on the vines (a little hospo pun!) and fend for ourselves. – Oliver Brown

People are definitely being more careful in their spending, but it makes you look at what you offer from a customer’s point of view. You need to make sure every person walking through your doors is getting looked after and feels valued. Know, value and listen to your customers. – Karena Armstrong

We opened at the end of 2021, s0 we didn’t experience the immediate impact of Covid as business owners. But as hospitality workers at the time, we felt a communal drive to support small restaurants. Now, with rising living costs, discretionary spending on dining out seems to be the first cutback for many, making this period more challenging for the industry. – Mug Chen and Chia Wu

I found a distinct shift in the last couple of months of 2020 and pretty much the entire way through 2021. When we opened 1000 Island back up after all that time, we found guests were just so thankful and grateful to be back inside a venue. They were making bookings, arriving on time, and if they weren’t going to make it they would let us know. Unfortunately this only lasted one to two years max. Currently, we still see guests booking two to three weeks in advance (thank you) … Then when they cancel 30 minutes before they’re supposed to arrive, it really hurts us. By no means is what’s happening in the industry the guests’ fault for cancelling bookings last minute, but I think we all need to practise just a bit more understanding. Like we (including us in the industry) all could zoom out a little bit. – Dan Vaughan

My role as an operator has become even more hands-on. I’ve found myself working longer hours, often being the first to arrive and the last to leave, taking on a wide range of responsibilities to ensure the business continues to run smoothly. This approach is not just about managing the business; it’s also about protecting our team. By shouldering more of the workload myself, I aim to keep our staff motivated, happy and less burdened by the current economic pressures. While the pandemic and the cost of living crisis present distinct challenges, our response has been to double down on our commitment to our business and our team, reinforcing our resilience and adaptability. – Wilson Shawyer

Covid was extreme and relatively sudden, but there was a lot of government support. Cost of living pressures affect us, our businesses and our customers (therefore our trade) and it’s happening a little more every day without much insight into when it will improve or how – and what the government can or will do about it. – Olivia Moore

I immediately went about consolidating operational costs. We bulk purchase for the company and store off-site. I meet regularly with my two head chefs to run through the figures and discuss ways to reduce costs. I now work with a company that renegotiates power pricing every month for me – ever since power re-seller contracts became worthless and the ability to double rates overnight became a thing. It requires a lot of forward planning and strategy to think ahead in a small business … but that is the reality of doing business these days. We are not just providing great food and service, we have become logistics specialists and long-term strategists when it comes to marketing. – Emily Raven

We have been constantly reviewing our financials. We are looking at what leavers we can pull to help manage this cost without necessarily passing the whole lot onto the customers. At the moment we have taken a hit to our EBITDA [earnings before interest, taxes, depreciation and amortisation] while we slowly feel out the market and what we can charge. You don’t want to be the first to raise your prices by 15 per cent. Hospo is mostly a really simple business model. Seventy per cent of revenue goes to COGS [cost of goods sold] and wages, 20 per cent to overheads, ideally leaving 10 per cent before the tax man takes his slice. Everyone in the industry must be upping prices, otherwise, I worry it could cannibalise itself with a race to the bottom. Things like weekend surcharges and EFT charges being passed on need to become the norm for the industry to find its feet again. – Oliver Brown

Focus on the details. Look at the total experience for the customer and make sure the service is spot on. People still understand and really value personal service. – Karena Armstrong

Our reliance on local rather than imported goods has somewhat shielded us in the short term. But the broader operational and supply chain impacts are undeniable. We’ve sought creative and quality-consistent alternatives to maintain our standards and philosophy. – Mug Chen and Chia Wu

I’m sure everyone is seeing this, but it’s getting harder to bring more people out mid-week. So we are forced to stretch more out of a Friday or Saturday evening. Two to three sittings is basically the norm everywhere at the moment and the only way that this system works is a mutual understanding between operators and guests that there is a time limit on tables. The only way we can provide a memorable experience is to be able to take the next table at 8:15pm. – Dan Vaughan

Our business approach goes beyond opening new venues; we prioritise strategic considerations, such as the suitability of a location and the alignment of our business model with the local area. Staying focused and maintaining relevance to our target markets are key strategies we focus on to adapt to inflation pressures. It’s not about expansion for the sake of growth, but about thoughtful development and ensuring our new ventures are well-positioned to thrive despite the economic challenges. – Wilson Shawyer

At this point inflation has affected every element of my business, which sadly ends up trickling down to our pricing. This then affects guests and creates this element of exclusion due to lack of affordability, and therefore eventually negatively affects the business too. Incremental price increases are all we can handle, and at a slow pace. With a business as small as mine we can make impactful changes quickly to streamline things, but there is only so much you can tweak the operational costs of a business if costs keep rising. – Olivia Moore

It has always been about the people for me. Hospitality attracts all the creatives, misfits and weirdos – the people who don’t really fit in elsewhere. They are also some of the most amazing people I know. I get real joy from a great service and have been organising a lot of events that are about skill enrichment and working with external talent. It’s great for the team, it’s great for the customers and it’s great for me. I have many long-term staff members and, unbelievably, Covid contributed to building their trust in me as an operator and someone who cared about their welfare. This is profoundly important to me and has helped me to define my sense of purpose through a very tough time. – Emily Raven

We still love what we do. Hospitality is a great industry. We get to look after people who are mostly just out to have a good time. We have this unique opportunity for the two hours they are with us to form a bond and connection and to show people a good time. And I have been known to be quite stubborn, so that might help too. – Oliver Brown

I know as an individual I can do better. I can cook better, I can lead better, I can create better food. I have that energy and passion for the industry and the lifestyle I have chosen. I hope that by osmosis this permeates others. I can only control what I do, so I have a crack every day at leading with positivity, resilience and joy. We feed people. We see intimate moments in their life. I still see that clearly. – Karena Armstrong

From the beginning, Chia and I have held steadfast to our original mission. Muni was founded with the hope of forging a passionate connection with our region, its land and seas, the people who work upon it, and the guests who come with enthusiasm to partake in our experiences. We believe this forms the most valuable dining experience in this era. Two years on, this belief continues to be our greatest source of strength and motivation to persevere. – Mug Chen

What motivates us … is our responsibility towards our staff. At Good Gilbert and Good Burger, we have 14 and eight employees, respectively, who depend on us for their income. Our focus has been on creating environments that are not centered around us as individuals but are about the people who bring our establishments to life. It’s a reminder that, as business owners, our duty extends beyond ourselves – it’s about fostering a supportive and sustainable environment for those who work with us. It’s the essence of what keeps us going – the understanding that our actions directly impact the lives of our employees. – Wilson Shawyer

Lots of projects and trying to be creative outside of the day-to-day business. And seeing others do so too. There was a surge of new openings post Covid, which is encouraging, but if new ideas aren’t possible within a normal four walls/bricks and mortar venue then looking at shorter-term opportunities to offer some kind of creative outlet has been keeping me engaged and excited. – Olivia Moore

The [current difficult conditions] dragging on for a very long time and a deskilling of our industry. The early ’90s were a terrible time for hospitality and I’d hate to see unemployment approach those levels. While fringe benefits tax was largely responsible for many closures to high-end venues at that time, we basically ended up with hardly any venues left and boring, pokie-driven, parochial menus and wine lists severely limited by lack of international enrichment and talent. It would be a great shame to see all the hard work – from years of entry-level small bar licences through to affordable neighbourhood wine bars and eateries – gone because those operators lose all hope and profitability. – Emily Raven

I feel bullish about 2024. I feel like the uncertainty around the economic climate is easing, people feel like they know what to expect financially this year so I think we will see people starting to spend again. We saw this in the first part of Jan with numbers looking better than that of 2023. – Oliver Brown

I find looking too far forward unsettling. Bigger picture, when I really think about it, is peace in Gaza – those poor families! Climate change is huge and really the bigger issue. And the No vote really upset me. When the culture of a country or industry isn’t focused on the bigger picture, how can the smaller stuff get solved? – Karena Armstrong

Building on our foundational mission, our concern now is whether the experiences we provide still hold value for our customers. Are there enough opportunities and occasions for us to continue pursuing what we believe in? As a regional restaurant, we essentially serve as a platform to connect local producers with our customers. When our current model no longer fits the majority of our clientele, we grapple with whether our responsibility is to maintain our standards at all costs, or to adjust in order to reach a broader audience, possibly compromising on the level of experience we strive to offer. – Mug Chen

Our biggest concern for the year ahead is time. There’s not enough of it. –Wilson Shawyer

I think the delayed impact of inflation and cost of living has the potential to hit hardest in this coming winter. We saw the beginnings of it in 2023, but summer kicked everyone back into gear as it tends to, but I worry that the drop in trade will be more significant going into it this year. – Olivia Moore

People are looking for a bargain – most of us are already adapting to this with very competitive pricing, great happy hours, menus using cheaper ingredients and looking for ways to attract people that won’t hurt their hip pocket too much. Landlords are finally seeing the writing on the wall. CPI rent adjustments really, really hurt last year at 7.8 per cent so business-savvy landlords who want great operators and aren’t too greedy are starting to pop up at last.

I also think we may finally be on the tail-end of inexperienced, under-capitalised operators who lease all their equipment and learn how to do payroll through trial and error. There is absolutely no fat left on the lamb to afford equipment lease costs and there are now heavy penalties in place for late tax and super payments. Our industry has traditionally had an extremely high failure rate due to low barriers to entry but as compliance requirements amp up, I hope to see a more professional, regulated and trustworthy industry evolve. – Emily Raven

2024 is going to be all about flavour over health trends. People will be looking for food experiences and will be eating clean in their own time. People will go out to get food that they can’t make at home. I think we will also see a segment of the industry leaning hard into Tiktok trends a bit like we saw with the freak shakes and huge burgers of Instagram a few years back. – Oliver Brown

I’d like to see the state and federal governments supporting small farmers and producers and seeing both their food production and tourism valued. Oh, and also if they could sort out the cost of energy and support renewables for our climate that would be great. [But it will probably be] less service and cheaper food costs in hospitality, at a guess. Until the bigger picture shifts the cost of doing business in Australia will keep being really tough, and owner-operator businesses will become less feasible, but I refuse to give in. There are just too many amazing people, great food and stories to be shared. – Karena Armstrong

As relatively new restaurateurs and having lived in South Australia for only five years, we are still exploring and learning about this market. We’ve noticed that Adelaide’s dining scene, compared to other places we’ve lived, seems more limited and less diverse, with too many similar offerings. There seems to be a lower openness to new things, making business owners hesitant to innovate. But I am hopeful that the rapid changes in our current situation may spur the emergence of new dining business models that can balance economic sustainability with maintaining quality without becoming overly commercialised and gain widespread acceptance.

It’s also clear we are now fully in the digital marketing era, where being vocal and repetitive about who you are is a crucial part of business. “You are what you say, and you must say it loud and often.” Personally, I feel this overt approach does not entirely align with the traditional restaurant values of elegance, subtlety, and letting quality speak for itself. However, as a new business, adapting and embracing these changes with optimism is our way forward, hopeful for the new possibilities it may bring. – Mug Chen and Chia Wu

As far as trends go, I don’t know if it will happen but I would love to see less luxury in 2024. I’d love to see a bit more grit in venues, more thinking outside the box. Try and execute a bit more of an ambitious idea that has soul and character. Champagne and caviar for me is out. – Dan Vaughan

In 2024, I think the industry will embrace a back-to-basics approach. As financial constraints tighten and customers become more cautious about how they spend their money, venues that have struggled to maintain a distinct personality or have relied on trends may find it challenging to thrive. – Wilson Shawyer

I imagine the extremes will become more obvious – people who can afford to will continue to spend on expensive dinners, and people who can’t will eat out even less. I also think people might start to consume more consciously – the ever-growing drink less and drink better message. – Olivia Moore