Hospitality

The hospitality industry contributes over $100 billion to Australia’s GDP and is a significant driver of economic growth. There are more than 363,000 businesses that employ over 580,000 people across the hospitality sectors.

Source:Australia National Careers Institute

According to Australia Food & Grocery Council’s 2019 State of the Industry Report, the food and beverage sector is the bread and butter of Australia’s manufacturing industry and accounts for 32% of the total manufacturing turnover. Growth for the hospitality industry is steady with an expected revenue growth of 4.6% until 2022 (IBIS World, 2020).

In addition to steady growth and bright prospects, people choose to start a hospitality business for a number of reasons:

• A strong passion for food and/or entertainment 
• A sense of fulfilment from creating memorable experiences for others
• The diversity of an ever-changing work environment
• A natural step into starting your own business after years of experience working in hospitality

The hospitality industry is broad, but it’s generally understood to consist of businesses that provide services in food and beverage (F&B), accommodation and tourism (Australian Industry Insights). Below are some examples of businesses in each sector:

At SavvySME, we have a large community of like-minded hospitality business owners and entrepreneurs that share a common vision of helping each other grow. Whether you run an established cafe or hotel, or you're thinking about starting your own pub or tour operator business, we would love for you to get involved and make the most of the latest industry news, peer discussions, business ideas and advice from industry experts. We can also connect you with suppliers, service providers and tools that will help your business thrive in the competitive hospitality market.

Hospitality is fast-paced and highly competitive. Some of the key things you will need to consider to start, run and grow your business include:

1. Legislation
2. Licenses and permits
3. Tax requirements 
4. Health and safety
5. Employing staff
6. Hospitality supplies

1. Legislation 

Firstly, you need to understand the key legislation that applies to your business. For food services these include:

• Competition and Consumer Act 2010
• Food Standards Code
• Australian Consumer Law
• Franchising code of conduct
• National Trade Measurement legislation
• Country of Origin food labelling 

Key legislation for tourism businesses include:

• Competition and Consumer Act 2010
• Australian Consumer Law
• Commerce (Trade Descriptions) Regulation 2016
• National Marine Safety Laws
• Anti-Money Laundering and Counter-Terrorism Financing Act 2006
• State restricted trading days 
• State tourism legislation

2. Licensing and permit requirements 

You will also need to understand your licensing and permit requirements which vary according to your business activities and the state or territory in which you operate. You can search for the permits and licenses you need on the Australian Business License and Information Service(ABLIS) website. Some examples include:

• Liquor licensing
• Restricted trading days
• Waste disposal
• Outdoor dining 
• Preparing/selling food
• Use of public land

3. Tax requirements 

Hospitality businesses have specific tax requirements and you will need to have a good grasp of goods and services (GST) and how it applies to the products or services you sell. Learn more aboutGST and food, andGST for the tourism industry. 

4. Health and safety requirements 

Under the health and safety law, employers have primary responsibility for health and safety and have a duty to provide a safe workplace and environment for employees, customers and members of the general public. There are also specific health and safety requirements and food safety requirements in hospitality. If you handle food and beverages, this means ensuring your staff are trained in food safety and have a nominated food safety supervisor. Learn more about food safety requirements with HACCP Australia andWorkSafe Australia. 

5. Employing staff 

If you employ staff, you will need to know the workplace laws and obligations that apply to employers in the hospitality sector. This includes occupational health and safety (OHS), employment law, industry awards and workers’ compensation. 

What are the key considerations when starting and running a hospitality business?

Once the legal boxes are ticked, you can start thinking about the logistics of running a hospitality business. Key considerations include:

• Venue lease and rent 
• Insurance
• Shop or venue fit-out, equipment and maintenance 
• Inventory and supplies
• Branding and marketing collateral
• Staff uniforms 
• Staff wages
• Hardware and software 

What challenges do hospitality businesses face?

In addition to the challenges of juggling the many moving parts of a hospitality business,  our community members also discuss broader issues in the industry including:

• Digital disruption:Online food delivery services like UberEats and Deliveroo are challenging traditional business models. Airbnb has also challenged traditional business models in the tourism and accommodation sectors.
• Continuous industry growth:More growth means more competition and small hospitality businesses often find it difficult to differentiate their brand.
• Sustainability: Attitudes towards food and tourism are changing, e.g. the rise of plant-based food options. Consumers are increasingly looking for sustainable options and want to support businesses whose values align with their own. 

Some of our most popular Q&As cover topics including:

• How to find and keep valued customers
• Brand awareness and reputation management
• How to minimise overheads
• Staffing issues and reducing employee turnover 
• How to increase profits during the low season
• Supplier and vendor related issues
• Poor business planning
• Corporate social responsibility
• Operational issues
• Cash flow management 
• Adapting to changing market trends

If you relate to these issues, we’d love for you to join the discussions. In doing so, you will have access to a wide range of resources and find solutions to help your business thrive. Depending on your business, some of the industry professionals and service providers you may work with include:

• Venue managers:Venue managers are in charge of event space or locations such as conference centres, hotels, theatres and galleries. You may liaise with venue managers, e.g. for catering or servicing events.
• Event planners:Event planners organise events and ensure everything runs smoothly. 
• Suppliers and vendors: Wholesale catering and kitchen suppliers provide hospitality businesses with essential items, equipment and consumables needed to run a business including kitchenware, furniture and uniforms.
• Wholesale food distributors:Wholesale foodservice suppliers prepare and deliver fresh produce and food items such as cheese, desserts, breakfast foods, meat, seafood and fruit and veg.

The industry professionals you work with and suppliers you choose can have a direct impact on the quality of your products, business reputation and bottom line. Learn more about industry professionals you may work with and get connected with the right suppliers in your sector.

As well as connecting with other hospitality business owners, you can also connect with professionals in over 400 solutions. This includes the latest in advertising, branding, customer loyalty, market trend, budgeting and business management.