INSIGHTS: Sydney Venues Stay Busy, but Profits Continue to Shrink

Sydney's hospitality industry continues to welcome customers through its doors, but many operators say busy venues are no longer translating into healthy profits, according to a new industry report.

The State of Hospitality 2026: Sydney Edition, released by Bertoni Hospitality, found that 54% of hospitality businesses were either breaking even or operating at a loss over the past three months despite maintaining customer demand.

The survey, conducted between April and June 2026, gathered insights from Sydney cafes, restaurants, pubs, clubs, and other hospitality businesses representing more than $145 million in annual turnover and employing approximately 950 hospitality workers.

Researchers identified three major challenges facing the sector: the widening gap between revenue and profitability, rising operating costs coupled with softer consumer spending, and the growing personal toll on business owners.

According to the report, 87% of operators raised prices during the past six months in response to increasing expenses. However, 63% reported that customers are spending less per visit, making it increasingly difficult for businesses to protect their profit margins.

"Being busy is no longer enough," said report co-author and hospitality strategist Mina Iacono. "Many venues are still attracting customers, increasing prices and growing revenue, but too little of that revenue is being retained as sustainable profit."

Labour costs remain one of the biggest concerns, with 46% of respondents identifying wages and staffing as their largest cost increase over the past year.

Beyond the financial pressures, the report highlights the human impact on hospitality operators. Many respondents cited longer working hours, reduced personal income, burnout, and uncertainty about the future of their businesses.

"This is not an industry refusing to adapt," Iacono said. "Operators have changed prices, menus, rosters, systems and operating models. The challenge is that many of these adjustments are no longer enough to counter the combined impact of rising costs and changing consumer behaviour."

Bertoni Hospitality CEO Anthony Iacono said operators are facing pressure from both rising business expenses and more cautious consumer spending.

The report also found that 40% of operators would consider selling their business if current conditions fail to improve, underscoring the financial strain many venues continue to experience.

Despite these challenges, the findings suggest Sydney's hospitality industry remains resilient, with operators continuing to adapt while seeking new ways to balance customer value with long-term business sustainability.

Key Findings

• 87% increased prices during the past six months.

• 54% were breaking even or operating at a loss.

• 69% are concerned or uncertain about business prospects over the next year.

• 63% reported customers are spending less per visit.

• 46% identified wages and staffing as their largest cost increase.

• 40% would consider selling their business if conditions do not improve.

• 27% are using AI or automation tools in their operations.