More than 60 high-profile restaurants and cafes have shut in the past 18 months. “It is, hand over fist, a million times more challenging.”
The Moonan Flat Pub, The Barrel Shepherd’sMr Tipsy’sRestaurant reviews, news and the hottest openings served to your inbox.“If I was ever going to open a restaurant again, it would be in the city,” said Andrew Burns, the head chef and co-owner of Babyface Kitchen , who called time in December after 10 years of service.
“Every time I go to a decent restaurant in Sydney, it’s full. It might be winter, it might be a Sunday. That’s just not the case in Wollongong.” The hospitality scene in Wollongong, like other cities and towns across regional NSW, flourished in the years post-COVID due to record levels of internal migration, the NSW government’s almost $1 billion Dine and Discover Program, and the renewed appreciation for restaurants and cafes following lockdown. Chef-restaurateur Andrew Burns at his burger shop 2 Smoking Barrels, following the closure of his hatted Wollongong restaurant Babyface Kitchen.“Everyone was so pumped to get back into restaurants, but within 18 months trade definitely dropped,” Burns said. “Things started to die off. The cost of everything just skyrocketed … and midweek it became hard to get people through the door.”On a Wednesday night in 2025, Burns looked out from the kitchen to see fewer than 10 people in a 50-seater dining room. It was depressing, he said, and he knew it wasn’t getting any better. That year, ASIC reported a 57 per cent rise in insolvencies across the food and accommodation sector in the 12 months to March. In Wollongong, closures happened one after the other: chef Daniel Sherley shutafter a decade of service; Neve and Giorgio Piras retired, selling their 43-year-old Italian restaurantDirty Wine Shop & Tasting Room“We got great support in Wollongong, but I felt like the restaurant hit a ceiling,” Burns said. There wasn’t enough money to refurbish the restaurant, to hire new talent, or to have the entire front of house team on every night. “It was time.”Australia’s hospitality sector has the highest failure rate of any industry, according to a 2026 CreditorWatch report that showed more than one in 10 restaurants and cafes have collapsed over the past year. “Pretty much every conceivable cost has increased substantially − labour, food, utilities, insurance, compliance, freight and maintenance − alongside a squeeze on guests’ discretionary spending. It creates something of a perfect storm,” said chef-restaurateur Troy Rhodes-Brown, owner and operator of two-hattedYellow Billy Restaurant in the Hunter Valley, owned by Sam Alexander and Pat Hester, closed in February. Muse Restaurant has built resilience over the past 17 years in business, making it capable of weathering such storms, he said. “But where I really feel for the industry is the independent operators who have only been trading for a few years. “Opening a restaurant often means putting everything on the line − servicing start-up loans, building a trusted brand from scratch, learning through inevitable mistakes − all within a framework that leaves very little room for error.”‘Pretty much every conceivable cost has increased substantially alongside a squeeze on guests’ discretionary spending. It creates something of a perfect storm.’New regional venues are hit harder than most, said restaurateur Kat Harvey-Barakat. She moved from Melbourne to the Northern Rivers with husband Ric Harvey-Barakat in 2022, just six weeks after an idyllic post-lockdown holiday.“We were like, ‘Oh my god, imagine if we just opened a restaurant here. All of our life’s problems would be solved’,” she said. The pair brought their Mulgrave burger shopto Byron Bay and Lennox Head, and later opened an intimate Middle Eastern restaurant, Baraka.“It is, hand over fist, a million times more challenging to operate a restaurant in a regional area than it is in a capital city,” said Harvey-Barakat. The learning curve was brutal, she said. Customers were more transient, stock had to travel further, and a single adverse weather event, like a flooded road, could wipe out an entire evening of trade.“Freight costs to regional Australia have risen significantly,” said Chelsea Smith, who co-founded independent bottle shopwith James Sherley in 2022. The couple closed their Port Kembla store after two years, and pivoted toward pop-up wine bars and events across the South Coast. It made more sense to rely on their caterer’s liquor licence rather than fork out for another liquor licence when their tenancy ended, she said.“Weekday trade was harder to sustain in a place like Port Kembla, with minimal foot traffic and a lot of empty shops,” Smith said. “We now focus on pop-up events … where there is a bit more activity at night.” Janina Allende, chef at now-closed hatted restaurant Valentina at Merimbula.Chef Manuel Tersigni found there weren’t enough people in Mullumbimby to sustainduring the cost-of-living crisis. He moved from Sydney to open the mid-sized restaurant in 2023, hoping for a more hands-on experience. “The restaurant had to really consider how much people could actually spend,” he said. “When your profit margins are so thin, you rely on volume, but that’s the twist … The problem in these areas is that there’s not enough volume, so you hit the ceiling very quickly.” Tersigi closed Rosetta’s in 2025, and returned to Sydney to helm CBD restaurant Margot Osteria.“Guests really are making that decision, ‘Do I have that extra bottle of champagne with dinner, or do I pay the power bill this month?’,” said Josh. “It really is that stark.” Chef-restaurateur Andrew Burns was glad to farewell Babyface Kitchen on his own terms.The Harvey-Barakats closed Slicks at Byron Bay in 2024, unable to compete with a nearby burger shop. Ric Harvey-Barakat said it was an important reminder: in regional communities, where it’s easy to compare, it’s more important to run your own race. That’s what people loved about their restaurant Baraka, which will reopen on May 7, following a brief hiatus to care for the couple’s new child. “We went into it with a lot of heart, we tried to push who we were as people onto the plates and into the experience, more so than trying to offer the best food you’re going to find because we just can’t compete in that arena,” Kat Harvey-Barakat said. “People don’t buy products, they buy stories … and bookings went absolutely nuclear.” Josh Gregory, who now works at Roundhouse within Newcastle’s Crystalbrook Kingsley Hotel, says that’s the part of hospitality he hopes diners will remember long after they’ve forgotten the relief of being released from lockdown: “Cooking for someone is like giving them a piece of your soul. To be able to create and share those moments with people, like a toddler’s first bite or someone’s last meal, that’s what’s enduring about hospitality, and that can weather any storm.”You have reached your maximum number of saved items.
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