Report reveals surge in reservations and revenue for Australian restaurants
Reservations at restaurants are surging, with Australians prioritising venues that offer high-value, high-quality dining experiences, despite continued economic pressures. This data and more insights are highlighted in a new report by SevenRooms, the leading CRM, marketing and operations platform for growing restaurants.
The Restaurant Trends and Diner Expectations report, which sought to understand how restaurants are delivering better guest experiences in the age of AI and automation, revealed reservations are up 26% year-over-year from Q1 2023 to Q1 2024. Not only are Australians dining out more – they’re also willing to spend up for elevated, personalised experiences, with one in six Australians willing to spend between $98-$291 per person for a meal out.
“Australia is home to tens of thousands of venues that add so much to the country economically, socially and culturally. Even as economic pressures persist, restaurants, bars and cafes are cementing themselves as a ‘third place’ - somewhere a person spends time besides home or work - that people crave,” commented Paul Hadida, Managing Director, APAC GTM at SevenRooms. “We found that when restaurants really get to know their customers while offering great experiences and value, people will prioritise them over their competitors. Venues who recognise and address what their customers want are establishing themselves as these third places in their communities, improving revenue and guest retention as a result.”
Elevating experiences
When analysing the factors that encourage people to return to restaurants and choose them as a ‘third place’, guest experience, upgrades and personalisation are critical – and consumers are willing to spend more for them. SevenRooms’ platform data shows that reservations with prepayments for events or experiences – such as a tasting menu, special promotion, bottomless brunch or bottle of champagne – generate >35% more than reservations without a pre-booking.
SevenRooms restaurants in Australia sold more than double the number of upgrades and experiences compared to the United States and United Kingdom, as Aussie consumers prioritise high-value, high-quality experiences. On average, Australian restaurants generated more than $34K in revenue per venue from upgrades.
Looking across generations, Gen Z dines out the most, with more than a quarter (26%) dining out more than five times per month and another 41% saying they dine out 3-4 times per month. Comparatively, Gen X and Baby Boomers are overwhelmingly eating at home with 66% of this group only eating out 1-2 times per month. While the frequency with which Australians visit venues differs across demographics, they all share in the desire for more convenience, personalisation and value. They reward the venues that offer that with their dollars and their loyalty.
“We know that our customers are contending with economic pressures and are being more intentional with their spending. To secure their patronage and earn their loyalty, we must continue to evolve and offer improved guest experiences,” said Robert Squillacioti, Chief Marketing Officer, Solotel. "For example, we introduced a Veuve Clicquot upgrade for diners at North Bondi Fish and have seen sales go through the roof. It’s just amazing. We know that’s what the clientele wants and drinks. The ability to just have it there and add that bottle to an experience has been really, really strong.”
But it's not just about value and upgrades – atmosphere, ‘vibe’ and recognition are important too. Younger consumers are more influenced than older generations by personalised surprises like birthday or anniversary gifts. Men are 73% more likely than women to care about building a rapport and 50% more likely to care about being known by name with restaurant staff. Women, on the other hand, are more interested in atmosphere and ambience, personalised in-service surprises and the ease of securing a ‘walk-in’ seat or table.
“Every diner is unique, but they’re bound by wanting more than just a meal. The venues who provide this level of service are establishing an advantage over their competition,” Hadida added. “These meaningful, human interactions carry huge weight for consumers and huge value for operators. Technology is the key in enabling them to flourish - of which AI and automation are starting to play a much bigger role.”
Artificial intelligence
Artificial intelligence (AI) has become the defining trend across industries in recent years. In hospitality, its impact is growing, with 85% of Australian operators using AI in their business. The most common ways restaurateurs use AI are for manual, time-consuming tasks, like inventory management and data analytics. Common AI uses include:
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Data analytics - 36%
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Inventory management - 36%
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Devising menu items - 29%
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Scheduling - 26%
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Staff hiring and training - 25%
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Dynamic pricing - 25%
Increasing revenue and reducing operating costs are the top goals for operators in 2024. AI is a crucial way of doing both.
“We're building an AI-assisted data and insights solution that allows our teams to digest information easily,” said Kylie Moncur, Chief Marketing Officer, Australia Venue Co. “In the future, team members will be able to ask questions in natural language, the tool will pinpoint the relevant data source, identify the specific problem and offer actionable solutions.”
Rising dining spontaneity
More than half (53%) of SevenRooms reservations in Australia are made ‘day-of’, with the second-most popular time to book at 10+ days from the requested date (16%). Most people are either dining spontaneously or making important plans well in advance. A quarter (23%) of restaurant business comes from walk-ins, with 37% of Gen Zers, 31% of Millennials and 33% of Gen Xers valuing the ease of ‘walk-ins’.
To read the full report, including more insights into diner expectations, reservation habits, marketing channels, growth trends and more visit: https://sevenrooms.com/research/2024-au-restaurant-diner-trends/
SevenRooms, 12th August 2024
