Damien Brabender said he expects the next 12 months to be very challenging in the hospitality sector. (ABC News: Courtney Barrett Peters)
In short:
Following the closure of Miss Van's this week, and other popular Canberra restaurants like Aubergine, Temporada and XO, owners are sounding the alarm about rising costs and other headwinds in the industry.
Canberra's restaurants are following a national trend, with the latest report from business data company CreditorWatch predicting one in 11 food and beverage businesses in Australia to close down in the next 12 months.
Some restaurateurs have turned to downsizing to try and weather the storm.
Damien Brabender has owned and operated a restaurant in Canberra for eight years, but said he's never seen the sector in so much strife.
"At the moment, 99 per cent of it's just horrifically sad news, people closing, people downsizing, people considering pulling the pin," Mr Brabender said.
"Bankruptcies, it's become kind of the buzz word in hospitality at the moment."
Mr Brabender said at his place, Otis Dining Hall, and across the scene, rising costs, skill shortages and cancellations are biting.
"I mean, if you think it's expensive at the supermarket, try going to a wholesaler, it's twice as bad," Mr Brabender said.
"When we're looking at our raw products coming in the door, some of them have gone up by 100-150 per cent literally, in the last two years, the only way that we can put them on a menu is by charging an exorbitant price.
"Ten years ago, you'll be aiming for a 15 per cent profit margin. At the moment, if you're getting a profit margin at all, you're lucky, but most people are looking below 5 per cent."
Mr Brabender is the owner and chef at Otis Dining Hall. (ABC News: Courtney Barrett Peters)
While things were challenging during the COVID-19 pandemic, Mr Brabender said he expects these factors to only get worse over the next year.
"The next 12 months is going to be disastrous," Mr Brabender said.
"And once we see more businesses close, more businesses downsize, a lot of the people that have opened these businesses, that have spent their whole life working towards that dream, are going to leave the industry."
Canberra restaurants close their doors
Vietnamese restaurant Miss Van's is the latest high-profile Canberra eatery to close up shop, following others like Aubergine, Temporada and XO in the last year or so.
Miss Van's owner Andrew Duong said while they'd survived another Canberra winter and patronage was starting to pick up, rising costs and low disposable income in the community meant staying open was not viable.
"Once the Ukrainian war kicked in … we went from paying, you know, $50 for a drum of oil, up to $120," Mr Duong said.
"What we found in the hospitality industry and what the audience will find at Coles and Woolworths as well is that once prices rise, they don't drop down, they stay up.
"I think that along with how everything is going, with prices going up up and up, people not having any money to spend, that's just the cause of what's happened to us."
Canberra restaurant Miss Van's closed its doors earlier this week.. (ABC News: Luke Stephenson)
Canberra's restaurants are following a national trend, with the latest report from business data company CreditorWatch predicting one in 11 food and beverage businesses in Australia to close down in the next 12 months.
On top of rising prices and the cost-of-living crisis, the hospitality sector is facing large staff shortages, with Jobs and Skills Australia predicting the industry will need an extra 21,400 hospitality workers, including waiters, baristas and bar attendants, in the five years from May 2023 to May 2028.
Wes Lambert, CEO of Australian Restaurant & Cafe Association, said the industry is further concerned about changes to Australia's migration framework and its impact on worker availability.
"There are figures that say up to 20 per cent of workers in the entire hospitality industry are visa holders and 36 per cent are non-Australians, the industry does rely on temporary working holiday makers, international students and skilled migrants," Mr Lambert said.
"In places like Canberra, it can be as many as 50 per cent."
Wes Lambert is the CEO of the Restaurant and Catering Association. (ABC News: Greg Bigelow)
Mr Lambert said while there are "a myriad of challenges" in the industry, there may be green shoots after some short-term pain.
"We do expect that the hospitality industry in Canberra will level off," Mr Lambert said.
"There are some new openings, but we do expect that while interest rates remain high, therefore inflation is remaining high, we do expect that in the ACT that there will be more closures coming forward before we see the industry recover."
Doing it different
Up against similar headwinds to the rest of the sector, Anand Kumar Ramakrishna closed his popular restaurant XO in October 2023.
"All of those small little elements made sustaining my dream, our dream, to run a really good restaurant, a good modern South-east Asian restaurant the way we wanted to do it, to just sustain that, and I think that's where, that's when I pulled the plug," Mr Ramakrishna said.
"I was like man, look, a dream is a dream, but if you keep doing this, everything else is going to get sacrificed."
AK Ramakrishna at his new venture AK's in Canberra. (ABC News: Nick Haggarty)
But instead of leaving the industry, Mr Ramakrishna has chosen to downsize to a much smaller offering, eponymously named AK's.
While he said he doesn't know how it's going to pan out, he's happy to be able to continue his passion of cooking in one way or another.
"AK's is me cooking the food, me serving the food, me talking to the customer and letting the food speak for itself, without the boundaries of whether I have qualified chefs to back me up, whether I have an amazing million dollar fit out, and also making work with what produce you have, obviously a smaller takeaway means a smaller menu," he said.
"The whole idea of pivoting from a restaurant to a simpler offering, I think, is just working with the resources that I have, but still do what I can do, which is cooking and feeding people's tummies."
