Melbourne’s on-premise crippled by lockdown

October 21, 2020
By Melissa Parker

The Stage 3 and 4 lockdowns Melbourne has endured since March this year have close to crippled the hospitality industry.

On Monday, 2 November, the city will move to Step 3 of the Victorian Government’s Roadmap out of lockdown that will allow venues to open with restrictions. Hospitality venues can welcome 50 patrons to drink and dine outside and 20 inside, providing they follow the social distancing and density quotients set.

New South Wales has already been operating under similar restrictions, and although it has fared better than Victoria, the situation is still challenging for the industry.

John Green from the Australian Hotels Association (AHA) NSW said the majority of venue owners and operators in NSW are just breaking even, far from the thriving and profitable businesses they were pre-pandemic.

“It is an extremely difficult time because we are working in a constantly changing environment and it is extremely hard to continue to comply,” Mr Green said.

He says the NSW industry is operating on one-quarter of average patronage with a 50 per cent reduction of staff.

“We are barely breaking even and not making a profit. The CBD is devastated,” he said.

Like Victoria, NSW hospitality industry bodies such as the AHA (NSW) have been lobbying the government hard for more outdoor dining opportunities to maximise the space around venues. Mr Green said the first good result was 16 venues in The Rocks precinct were permitted to trade in extended outdoor areas from last week.

“Opening outdoor is the safest way to try and maximise opportunity for venues,” Mr Green concludes.

However, to be granted such an opportunity, a venue has to first wade through frustrating bureacratic red tape of local council.

Despite this, Green says the space opportunities are there for Sydney with its rooftop bars, beer gardens and extended outdoor dining precincts that will help to reinvigorate the hospitality environment.

Lucky for Sydney it has its magnificent harbour, world-class surf beaches and its predictable balmy outdoor dining weather but what about Melbourne?

Melbourne’s CBD is its Sydney Harbour. The city is renowned for its vibrant laneways, bolthole wine bars and speakeasy venues down rabbit hole-style subterranean corridors. This aspect of Melbourne was the envy of Sydney until Sydney stepped up to recreate a similar vibe in its own CBD.

It is the soul of Melbourne, the fabric of its very identity, and it is on the brink of collapse. Some hospitality operators fear our harsh lockdown, one of the longest and restricted in the world will destroy the essence of the city forever. The industry is being told outside dining is the answer. Really? In Melbourne? Anyone heard of four seasons in one day.

Chris Lucas of The Lucas Group, one of Melbourne’s most successful restaurateurs has been particularly vocal in the media about his displeasure on the situation in Victoria.

He told Ben Grahame at News in August that is was ‘too late to save the industry’ and that it was ‘catastrophic’. He told Dani Valent at Good Food on October 12, “ in our sector, we have already lost 40,000 to 50,000 jobs and in the next few weeks a lot of our workforce is going to leave if they can’t be guaranteed work over Christmas. We are facing a perfect storm in terms of skills erosion.” He also added, “nobody loves al fresco dining more than me, but it is not a solution and it is not a replacement for indoor dining.”

Operators have had to create and innovate to keep afloat, and the cost has been great, and not just financial.

Michael Madrusan is the founder of Made in the Shade with his wife, Zara. They are behind the creation of some of Melbourne’s best cocktail bars. Their Everleigh is ranked by Drinks International as one of the top 50 bars in the world. Michael Madrusan was named #1 Most Influential Person 2019 by Australian Bartender Magazine.

Right now Madrusan is doing it tough.  He is sad, frustrated and angry.

“Victoria has been left to figure it out and to try and survive, especially with the decrease in the Jobkeeper and the lack of support from the Federal Government. Lumping us into the same bag as all the other states is disappointing, while they are getting back on their feet we have had hit after hit while trying to maintain fixed costs.”

But what hurts Madrusan most is the mental health and emotional distress experienced by his staff. Made in the Shade had no choice but to lay off most of its staff.  Out of 86 staff Jobkeeper allowed them to retain 26 including himself and his wife. He says it has been devastating:

“The mental toll on us has been huge, you can probably hear it in my voice. It has beaten people down. They are broken by what has happened. They have lost faith in the industry and the government and everything. It is quite sad to watch the hospitality industry that the public look to make their days brighter and better, and all of a sudden we have been handed down some of the hardest knocks.”

The Federal Budget and the Victorian Government has pledged considerable amounts to support hospitality coming out of the restrictions but Madrusan questions whether it is enough.

“Hospitality plays such a mega role in the identity of this city. (The government) need to make it a priority and consult the industry on how we think we can pivot, improve, change and thrive moving forward. We need to have an open dialogue and do this together,” he said.

“The City of Melbourne thrives on hospitality and the amazing offering we have developed over the years. I just hope people are kind in this new phase and give us a chance to find our feet so we can make people happy again and start the slow build because it is not going to be quick.”

If you are anyone you know needs help contact:

Lifeline 131114

Beyond Blue 1300 224 636

Reach Out au.reachout.com

Headspace 1800 650 890

Photo credit: Degraves Street, Melbourne

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