Will this year’s Commonwealth Games in Melbourne create a boom or bust for the city’s restaurateurs? Michael Harden reports.
Looking at the figures alone, there would be little reason to doubt that the Commonwealth Games in Melbourne will be hugely beneficial to the city’s restaurateurs. An estimated 90,000 international and interstate visitors will descend upon Victoria in March, joining the 6000 athletes and officials and a 3100-strong media presence, and injecting more than $3 billion into the state’s economy.
But, despite the potential gold mine those figures might seem to predict, it is certainly probable that many restaurants in Melbourne—other than those in popular tourist precincts—will experience something of a dip in trade during those 10 sports sodden days.
With attention focused on the Games and with venue caterers pumping out thousands of meals every day, those restaurants not directly in the path of the Commonwealth Games juggernaut will, by the experience of other cities that have hosted similar events, not see much of the projected multi-billion dollar windfall. There may be some long-term run-off—such as the increased awareness of Melbourne as a destination—but, as many restaurateurs in Sydney found during the 2000 Olympic Games, there may not be much immediate joy apart from Thorpie winning more gold for Australia.
A 2001 study for the New South Wales (NSW) Department of State and Regional Development of the business and economic benefits brought by the Sydney Olympic and Paralympic Games, concluded that “the Sydney Games were a remarkable success that delivered on the expectations of almost all of their shareholders, public and private”. ‘Almost’ being the key word for most Sydney restaurant owners.
Robert Goldman, chief executive officer (CEO) of Restaurant & Catering NSW, says that for most restaurants in Sydney the 2000 Olympics were nothing short of a “disaster”.
“There were false expectations that there was going to be a boom,” he says, “but that was never going to happen. We had done research in Atlanta in 1996 to see what the impact was and the news was not good. People go to the Olympics for the Olympic experience. There is an immediacy and urgency that it is a one-off, that it is here now and may never come again. The people that travelled to the Games came to see events, not go to restaurants.”
And the problem was not confined to missing out on all the tourist money, according to Goldman. Hometown customers kept away from restaurants too, either staying at home to watch the Games on TV or attending the events themselves.
“It wasn’t all bad news,” says Goldman. “The studies showed that if you were in a high pedestrian traffic area you did well. And also Mary Donaldson found Danish Prince Frederick at Darling Harbour during the Olympics so there was some silver lining on the cloud. But generally people didn’t go out for dinner much and some people lost a fortune.”
Restaurateur Frank Wilden had three restaurants in Sydney at the time of the 2000 Olympics—Manta Ray, Coast and Liberté—and is opening his latest venture, Oyster, in Melbourne’s CBD in time for the Commonwealth Games. He believes that location plays a huge part in a restaurant’s success during large-scale events like the Olympic or Commonwealth Games.
In Sydney, says Wilden, there was a “massive divide between those that did well and the rest” and, from what he saw and heard, “those that did well were primarily in desirable locations like Darling Harbour and the Wharf at Woolloomooloo.”
“My impression was that there was so much corporate hospitality at the venues that you had to be in an iconic or destination location in order to lure people out at night,” says Wilden. “When someone has had a boot load of food and booze out at the Games, it’s pretty hard to get them to go out again that night, particularly when they have to start paying for it. It’s very easy for people to say: I’ve had enough, I’m going home.”
Not all gloom and doom
Having experienced the Sydney Olympics and with an extensive knowledge of Melbourne and its restaurant scene, Wilden believes that there are some factors in Melbourne’s favour when it comes to a potential flow-on of people leaving an event and heading out to eat.
“The major advantage Melbourne has over Sydney is that all the major venues in Melbourne are located much closer to the city,” he says. “Homebush was a fair schlep out of town and there was not much between there and the city. If you wanted to kick on afterwards you had to travel all the way back to the CBD, whereas in Melbourne the CBD is in walking distance and you don’t have far to go to get to Southbank, South Yarra or Richmond.”
Accessibility seems to be the key word when it comes to talking positively about how Melbourne’s restaurants will fare during the Commonwealth Games. Looking at a map of the city it is easy to see why. All of the main venues apart from the Aquatic Centre—the MCG, Rod Laver Arena, Melbourne Park, Telstra Dome, Royal Botanic Gardens—are in a 2km radius of the CBD (the Aquatic Centre is 3km away, in Albert Park). Factor in the Athlete’s Village proximity—located just north of the city in Parkville—and you have a situation quite different from Sydney in 2000.
But it seems that many of the lessons from the experience of Sydney restaurants have been taken on board six years on. Any estimates and projections of how the Commonwealth Games might affect the business of Melbourne’s restaurateurs are erring well on the conservative side.
CEO of Restaurant and Catering Victoria, Wendy Jones, says that the approach the organisation has taken is to encourage restaurant owners to think ahead rather than just sit back and wait for customers to begin streaming in.
“We’re not promising the world and we’re not saying it’s going to be a boom for business,” she says. “Instead, we are more about what the likely impacts of the Games are going to be right through to what some of the practical issues are that you might have to consider if you happen to be on the route of the marathon course or something like that. No one is saying: wow, you’re suddenly going to get thousands and thousands of walk-ins. We are just saying, think ahead and be prepared.”
This cautious, measured approach may come in part from the experiences of Sydney restaurateurs, but as Wendy Jones points out, Melbourne is host to numerous large events every year—AFL Grand Final, Grand Prix, Australian Open, Spring Racing Carnival—and so “this is not something new to us”.
“You have to remember that Melbourne is pretty damn good at hosting large events,” says Jones. “Admittedly, this is like 10 days of them one after another, but for a lot of our members getting their heads around the logistical issues is something they have to do a few times a year anyway.”
The cautious approach may also be a result of Melbourne’s home-grown experience of a much-hyped big event dramatically failing to live up to expectations.
The 1996 Australian Formula One Grand Prix saw many businesses in the vicinity of the Albert Park track investing a lot of money upgrading their premises to cash in on the crowds that were expected to spill from the race. The only crowds most of these businesses saw, however, were packed onto the express trams that trundled past them down mostly empty streets on their way to and from the race circuit. After such a wake-up call, it is not surprising that Melbourne restaurants are being encouraged to look at the Commonwealth Games with a moderately optimistic, wait-and-see approach.
Fiona Sneddon, City of Melbourne councillor and chair of the council’s business and marketing committee says that while the council has “always taken a very conservative approach with a view to turnover and patronage,” she can “certainly see an upturn in business, particularly because we have a concentrated precinct that is very accessible to everybody”.
“Melburnians are used to big events like this,” says Sneddon. “While there are operators who are unhappy from time to time with the sort of restrictions and inconveniences these events bring, none of them would really be without them because they are aware of the long-term benefits these events bring to the city.”
With a bit of help
To alleviate some of the inconveniences and address some of the logistics specific to an event the size of the Commonwealth Games, the City of Melbourne and the state government held a series of seminars under the title of Business Ready in the lead up to the Games.
The Business Ready seminars—and the accompanying, glossy Business Ready kits—emphasised the measured, ‘don’t mention the boom’ approach taken towards the Games by the governing bodies.
The seminars targeting the hospitality sector—there were others for the corporate and retail sectors—addressed ways restaurants could benefit from the Games (applying for extended hours; temporary street-side permits for businesses that are on the marathon and bike racing routes; dressing up businesses for the Games without infringing on strict intellectual property codes), but were equally concerned with making business owners prepared for the hassles of restricted access, limited parking and convoluted health and safety issues.
The message to restaurateurs seems to be: some of you might make more money, but most of you should be prepared for a dip in trade and some increased hassle in running your business day to day.
“Lot’s of our restaurateurs have mates in Sydney and so are well versed in what went on up there, both right and wrong,” says Sneddon. “But you also have to remember that the Commonwealth Games are not the Olympic Games—the international attendance is smaller, the press numbers are smaller and the effect on the city is not as overwhelming as the Olympic Games. Of course it is still unknown how it will work, but I think in the long term it will be good for Melbourne. It will raise the bar on how we do these type of big events.”
Wilden is also quietly optimistic about how the Games will affect his new restaurant.
“We would expect trade to be good during that period anyway, but I would think that our location at the eastern end of the CBD should mean that we are busier during the Games,” he says.
“We are in an area where a lot of the major hotels are and we should see a pretty good volume of people getting out and about and looking for somewhere to go. It will be a good time, fingers crossed.
“I think other areas that will do really well will be the casino, Southgate and Docklands and areas like Albert Park and Richmond will probably do okay, but further out than that and it will probably be a similar situation to Sydney. Put it this way, if I was a little bit out of the city and wasn’t doing well, I wouldn’t be relying on the Commonwealth Games to keep myself open.”
So, along with the sporting highs and lows, the Commonwealth Games may provide Melbourne’s restaurants with moments of victory and moments of disappointment. There’ll be some boom, not much bust and mostly something in between the two.