There are signs of recovery for the hospitality industry, with consumer spending data from Zip’s Weekly Spending Index revealing positive trends in May.
While restaurants, cafes, bars and pubs have slowly been able to welcome back dine-in guests, the inconsistent easing of restrictions across states and territories continues to affect venues. The impact of government regulation is particularly noticeable in differences between large and small businesses.
Based on anonymised transaction data from a sample of more than 1.5 million Zip customers and 300,000 Pocketbook users, the data shows a gulf in recovery for hospitality businesses: restaurants and cafes are recovering at a faster rate than pubs and bars.
“There is a clear two-speed recovery emerging in the business economy, based on what consumers are spending their money on,” says Peter Gray, co-founder and COO of Zip. “While large shopping centres have resembled Christmas shopping sized crowds in recent weeks, pubs and bars are still limited to 50 patrons. This disparity of easing will continue to impact the business landscape, and particularly the small to medium sized enterprises, who are fronting large costs to adjust their places of trade.”
Spending across the hospitality industry remains much lower than seasonal averages, however, restaurants and cafes have been ale to recoup some lost revenue through adaptation. As such venues pivoted in May, there was a resurgence in spending with restaurants down 19% and cafes down 39% compared to April 2020, when they were down 38% and 53% respectively.
Spending at pubs and bars in May 2020 (down 74%) remained at similarly low levels to April 2020 (down 79%).
It’s unlikely the industry will see spending return to normal until restrictions are removed fully, however, there is hope on the horizon.
It’s clear from the data just how closely tied consumer spending is to government regulation. When beaches in were reopened for exercise in May, surf school spending surged with Australian’s spending up 432% compared to the same week in 2019.
With government restrictions set to ease further throughout June and into July, the hospitality industry could see its own boom in spending.
Image: Blake Wisz