Most Hospitality Venues Can Successfully Navigate Penalty Rates.
The hospitality sector faces genuine hardship. Rising costs, staffing shortages, and margin pressure affect operators across the board.
But when it comes to public holidays, new analysis by Foda Strategy reveals the majority of venues can successfully offset penalty rates or benefit from increased demand - a more complex picture highlighting opportunity instead of stark industry warnings..
The data shows opportunity varies by location. Foda's analysis of hospitality platform data shows public holidays drive significant booking increases
40% surges on Sundays before Monday holidays. (ResDiary)
147% increases on Mondays before Tuesday holidays. (ResDiary)
72% of venues apply surcharges, with public holiday surcharges enjoying the highest customer acceptance. (Lightspeed)
For venues positioned where customers want to be during leisure time - suburban and regional locations - public holidays represent genuine opportunities.
The annual impact tells a different story than one-day wage bills suggest.
Foda Strategy's modelling of a venue with ~$1m annual turnover with a typical 40% labour costs show.
Requires just 0.2% additional annual revenue to offset one additional public holiday
Achievable for most capturing leisure demand.
If operators can sustainably meet this demand and pay staff higher wages for working these sought-after shifts, that's a positive outcome for businesses, employees, and customers alike.
Public holiday penalty rates affect all venues, the ability to manage this varies.
While most can mitigate or enhance performance through surcharges and capturing leisure demand, approximately 1 in 5 - primarily CBD venues dependent on weekday traffic - face steeper hurdles.
For these venues, closing only intensifies financial pressure: they are still required to pay fixed or salary wages as well as losing 100% of the revenue from that day.
This analysis does not advocate for or against additional public holidays.
Foda Strategy's modelling of a venue with ~$1m annual turnover with a typical 40% labour costs show, Instead it highlights
the need for better understanding of differentiated impacts.
Rather than blanket opposition the industry would benefit from strategies and targeted support for venues that are going to be genuinely disadvantaged.
While enabling the majority to manage or benefit from increased leisure demand.
The evidence shows public holidays create challenges for some and opportunities for others. This is not a universal threat.
Know someone Contemplating public holiday trading?: Call Charles on 0403 571 901 or email charles@fodastrategy.com