pubs and bars are going broke hand over fist..and the worst is yet to come..(’Many hospitality businesses were hoping for a good trade over Christmas .. and if that didn’t eventuate, the outlook was grim’.)
“..Insolvency specialist Gareth Hoole, of accounting firm Staples Rodway, thinks the worst may be yet to come.
“I think it’s probably going to get worse.
While everyone’s saying the recession’s over, I think there’s still a lot of pain to be felt .. and where it will be felt is in people’s discretionary spending.
They just don’t have that extra cash to spend,” he said.
Many hospitality businesses were hoping for a good trade over Christmas .. and if that didn’t eventuate, the outlook was grim.
“It’s just getting a bit hard for many restaurant and bar owners to keep going,” he said.
Many traditional pubs were also being hit by a downturn in spending on pokie machines, which generated a considerable amount of revenue for some outlets, Hoole said.
Another problem for bar owners was that they had to keep spending money on their premises to remain popular.
“Places go in and out of vogue. Someone opens a new place and everyone goes there, and then another new one opens and all the clients leave and go to that one.
So there’s a lot of churn,” Hoole said.
“In order to keep a place popular, they have to keep refreshing it, which costs a lot of money for the fit-out and things like that.
“Typically what we [receivers] find is that bars spend a hell of a lot of money on fit-out to make it an attractive venue ..
.. and then it’s difficult to service the debt, with frustrating results.
That’s where they get into difficulty.”
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