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SpotLight: A Snapshot of the Australian Hospitality Industry Today.
SpotLight by Sarah Muxlow
Wednesday, 15th February 2006
 
The healthy tourism and hospitality industry in Australia is attracting many business people willing to sell up overseas and set up here. Australia attracts many new immigrant business buyers, investors and start-up entrepreneurs every year. In addition, there are opportunities for overseas trained and experienced hospitality staff to make a name for themselves, the cuisine and service style they love. 

Australia wide there is an abundance of fresh local produce, sunshine, seafood and wine. There are trendy restaurants of Sydney, established multicultural cuisine of Melbourne, expanding and booming tropical Queensland, European Adelaide, seaside Perth and outback Northern Territory.

Whether already working in ‘down-town' Australia, thinking of moving here to start a hospitality business, being sponsored to come over by a company to work or applying for a skills matching visa, here is some nutritious food for thought.

Taking an overview of the restaurant industry paints an interesting picture. A ‘work place reform' was initiated by the Restaurant Association Australia last year, and it focused on several key areas that effect hospitality establishments. There are, like in any hospitality industry on the rise, increasing costs and expenses for proprietors, changing expectations on staff in return for increased salaries, expanding eating trends and habits of consumers and the question of finding well trained staff to employ.

In Australia today there are 28, 900 restaurant businesses, employing 14,079 workers which equals to 1.08 million restaurant seats and 560 million meals served per year. This figure, as you can see, doesn't include the numerous hotels or resorts that are in place and are on the rise.

Take for example an average Australian restaurant. It has a turnover of $533, 200 per annum, employs a working proprietor, 9 staff: 1 chef, 1 cook, 1-2 kitchen hands, 4-5 waiting staff and will make a 4% profit. (Restaurant Association Australia)

The most pressing financial issues facing such Restaurants and Cafes in 2005, according to the Australian Bureau of Stats, were the labour costs. Whilst good news for staff, it has had the highest growth rate of all expenses for the proprietor. The increase in salaries is on average 17%, which brings the standard wage for staff to $42, 000 AU per annum.  

A further increase in expenses that the proprietor bares, are the rental/ leasing costs. These are up to 8.4% of the turnover, on average $57, 453 AU per annum. Whilst this may not appear to be a large increase, it comes at times at the expense of the restaurateurs livelihood. 

Government imposed taxes and insurances are another ongoing expense. However, there is a recent reduction in the rates of insurance that employers pay. Currently for each 100$ of wages paid, State Governments have an insurance charge. In Victoria charges are $1.80, New South Wales $2.44, Western Australia $2.32, South Australia $3, and the Federal Government $1.77. Queensland State's average insurance premium rate will drop from $1.43 per 100$ wages to $1.20, as of July 2006.

Satisfaction and sustainability for restaurateur and café owners in contrast comes from many directions. In this same period of significant increases to expenses, there is evidence of an increasing restaurant turnover by 7% among 7.1% more businesses in 2005 than the year before.

In line with the increase in expenses on the proprietor, is the increase in price per meal for the consumer. Main courses range from 14-35$AU per head, up by 8.4% in 5 years. This does not deter diners as shown by a significant increase in meals eaten out. The cost of living is on the rise Australia wide and with that, the busy lifestyles and job pressures mean more people are wanting to eat out regularly. Retirees, a major proportion of the population, are enjoying the rewards of life long work, with more time and disposable income to spend on cuisine experiences. In addition, Australia is more accessible for international visitors, and tourists flock. Today Australians eat out 1.8 times per week on average, 90 times per year. Compare this to Europeans who eat out 60 times per year and Americans 130 times per year.

Another key area of satisfaction for both staff and proprietors is the quality of low cost local products and home-grown raw ingredients. Australia has a large agricultural community close to cities and in the Outback. Diversity in climates and terrain, such as the tropical north and temperate south, allows for an abundance of fruit and vegetables all year round, as well as staples and wine. Lets not get started on the amazing seafood, there are more shapes, sizes and textures and tastes than can be counted!

There is also a renewed passion and appreciation for diversity in local and international wine, new raw ingredients as well as cooking styles and methods. This desire to experience a range of tastes has lead to an increase in demand for new menus, broadening and expanding upon typical Australian cuisine. Fusion cuisine has become home grown. Authentic international cuisine appreciated on travels overseas, has lead to new popular trends. Home comforts are wanted by the ever increasing multicultural population.

A further current issues that is facing restaurant, hotel and cafe propitiators and managers in Australia is the skills shortage. Currently high on the migration occupations in demand list, are Kitchen Chefs and Pastry Cooks. Since salaries are more internationally competitive, this will no doubt be an attraction to industry professionals wanting to try life down-under.

After a successful negotiation of the first ‘Labour Agreement' between with the Restaurant and Catering Association Australia and Government, the Australian hospitality industry can recruit overseas chefs and trade qualified cooks, easier than in recent years.

This new ‘Labour Agreement' enables restaurateurs and hotel managers to arrange for permeant and temporary business visas for international staff. There is no longer a need to make a special application with fee, or follow a process that requires detailed employment, financial and training information for each individual business, a once time consuming and costly process.

Whilst the demand for diversity by consumers comes at a time when there is a labour shortage, and a labour agreement to assist in recruiting overseas skilled workers, there is also a spotlight on training home-grown talent.

A challenges that still remains is raising the skill level of current and future hospitality staff here in Australia. To manage the higher turnover of customers in a professional manner and without lowering standards, there is a need for training in establishments. In-house training schemes focus on increasing the relevancy of training delivery. There is work with industry bodies, education and training providers to develop competency based training and new apprenticeship schemes.

For Australians looking to progress or pursue a career in the hospitality industry there is the opportunity to transfer skills developed in another industry such as customer service or staff management and all the benefits of working with highly skilled overseas cooks and chefs.

SpotLight is the weekly column exclusively written for 4Hoteliers.com by sarah Muxlow, it is highlighting the challenges and issues which the global hospitality is facing today.

Sarah is writing for hotel and restaurant owners, hotel chain managers, producers/growers/sellers of food & beverage, restaurant associations, governing bodies and hotel schools. She is looking at the problems they face...competition, trends of branding, staff shortages, unskilled staff, turning out students who are looking for good in-house management training schemes with hotel chains, what makes a good quality training course at a hotel school and more... 

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