Despite remaining busy and attracting customers, many hospitality venues in Sydney are struggling to convert that into sustainable profit, new research has revealed.\u00a0\u00a0<\/p>\n
The State of Hospitality 2026 Sydney Edition, published by Bertoni Hospitality, surveyed\u00a0Sydney hospitality operators between April and June this year\u00a0to understand the conditions facing cafes, restaurants, pubs, and other hospitality businesses.\u00a0\u00a0<\/p>\n
The\u00a0independent industry report\u00a0found three key themes emerging across the sector, including the growing\u00a0disconnect between revenue and profit;\u00a0the pressure created by rising costs and softer consumer spending; and the personal toll these conditions are taking on operators.\u00a0\u00a0<\/p>\n
Report Co-Author and Hospitality Strategist Mina Iacono\u00a0says the most significant finding was not simply that\u00a0costs had increased, but that the traditional relationship between stronger sales and improved profitability\u00a0appeared to be weakening.\u00a0<\/p>\n
\u201cBeing busy is no longer enough. Many venues are still attracting customers, increasing prices, and growing\u00a0revenue, but too little is being retained as sustainable profit,\u201d says Iacono.\u00a0\u00a0<\/p>\n
The research represented businesses with more than $145 million in turnover and approximately 950 industry workers. It found 54 per cent were\u00a0breaking even or operating at a loss\u00a0over the previous three months; 46 per cent cited wages and staffing as their\u00a0largest cost increase over the previous 12 months; and\u00a063 per cent reported that customers were spending less per visit.\u00a0\u00a0<\/p>\n
Of those surveyed, 40 per cent said they would consider selling if conditions remain unchanged.<\/p>\n
\u201cFor many operators, customers are still coming\u00a0through the door. The challenge begins after\u00a0the sale is made,\u201d the report says.\u00a0\u00a0<\/p>\n
It says the challenge is no longer simply managing costs, but protecting margin while continuing to deliver value.\u00a0\u00a0<\/p>\n
\u201cMost of the profit gets eaten up. Although I make a\u00a0profit, it\u2019s barely worth it when I take into consideration\u00a0the risk, stress and hours I work. It\u2019s a joke,\u201d says a pub operator in the report.\u00a0\u00a0\u00a0<\/p>\n
The report also reveals the human impact of prolonged financial pressure. Operators are describing longer\u00a0working hours, reduced personal income, burnout, and growing uncertainty about the future.\u00a0<\/p>\n
\u201cThis is not an industry refusing to adapt. Operators have changed prices, menus, rosters, systems, and\u00a0operating models,\u201d says\u00a0Iacono.\u00a0\u00a0<\/p>\n
One restaurant owner says it makes it very stressful, as they are always in survival mode when the cost of everything keeps going up.\u00a0\u00a0<\/p>\n
Bertoni CEO Anthony Iacono says operators are being squeezed from both directions. <\/p>\n
\u201cWages, food, utilities and fixed costs continue to rise, while customers are becoming more cautious about\u00a0how often they visit and how much they spend,\u201d he says.\u00a0\u00a0<\/p>\n
The report by the numbers\u00a0\u00a0<\/p>\n
87 per cent increased prices in the past six months\u00a0<\/p>\n
44 per cent of operators describe the Sydney hospitality market as challenging right now\u00a0\u00a0<\/p>\n
27 per cent of respondents are using AI or automation tools\u00a0<\/p>\n
46 per cent of cafes reported reduced customer spend\u00a0\u00a0<\/p>\n
11 per cent of pubs and clubs say rising costs are making it hard to maintain value for customers\u00a0\u00a0<\/p>\n
69 per cent are concerned or uncertain about their business in the coming year\u00a0\u00a0<\/p>\n
The full report can be viewed here<\/a>.\u00a0\u00a0<\/p>\n Photography by Alexander\u00a0Popadin \/ Pexels. <\/p>\n For exclusive hospitality news every Tuesday and Thursday, subscribe\u00a0here<\/a>\u00a0or follow us on\u00a0LinkedIn<\/a>\u00a0and\u00a0Instagram<\/a>.<\/p>\n