The true cost of service: a look at the hidden costs in hospitality

We expect impeccable service at restaurants. But what is the true cost of a good dining experience? 

Rushani Epa examines the 'invisible costs' in your bill - from venue overheads to produce prices.   Written by RUSHANI EPA - Published by Gourmet Traveller on Feb 13th

Smoke, gels, foam: it's the theatre of fine dining that draws folks in like moths to a flame. But behind the artful sabrage of Champagne bottles, the starchy white waistcoats, and the painstakingly tweezed ingredients in incredibly dressed dishes, are the people that make it all happen. This level of 'invisible service' means diners don't see the team being briefed on their water preferences ahead of time or playlists being specially curated by professional music consultants to match the mood.

In Australia, hospitality is one of the lowest paid industries. This should come as no surprise when one of the world's most esteemed restaurants, Noma, announced it is closing as it is no longer financially sustainable. It also comes at a time when critical hospitality commentary takes centre stage in films such as The Menu and TV shows like The Bear, showing the masses what hospo staff really think.

It might be the topic of the moment, but do diners understand the true cost of their bill?

Tradesmen provide detailed invoices that outline their labour costs, services provided and prices of goods used. But in a world like the service industry, the true cost goes well beyond the receipt. Actions and costs are made invisible to the diner, so how can prices accurately reflect the experience? And, in turn, how can workers be paid a fair wage?

Hospitality is more than food

The items that make up a menu aren't the only overhead costs a venue faces. Nagesh Seethiah, chef and owner of Manzé in North Melbourne, says: "When you sit down in a restaurant, there are far more costs to consider than just the food - there's rent, utilities, hiring and paying staff, fit-outs, equipment - even before you start sourcing ingredients and organising delivery or going to pick them up yourself from the markets. I could keep going on about all these factors before we even get to your first plate of food being [served] to you in the restaurant."

Trisha Greentree, executive chef at Sydney's Fratelli Paradiso and 10 William St, likens a restaurant to its very own ecosystem. "Restaurants don't only employ chefs. There are so many other people that are supported within restaurants, like ceramicists or musicians, farmers, and butchers. Then you've got social media, hosting media, the basics of cleaning laundry and tradies, a restaurant and the industry is an ecosystem," says Greentree.

"Customers need to understand the whole cost of what you're getting in front of you."

How staff shortages impact your meal

Seethiah opened his Mauritian wine bar at the end of Melbourne's last lockdown in 2021 and faced an onslaught of staff shortages. His Instagram stories turned into a marketplace for staff he desperately needed for the night. "We had nights where we didn't have a dishwasher, and whenever I had a bit of spare money, I'd buy us more wine glasses so we didn't have to have them in rotation."

According to the Grattan Institute, around 17 per cent of workers in the hospitality industry were on temporary visas prior to the pandemic, with the majority of this portion being international students that were often hired as waiters, kitchenhands, and bar staff. By February 2022, the number of hospitality businesses advertising for extra staff had doubled since February 2020. Countless venues have had to reduce their opening hours and it's been a make-or-break situation for all.

A shortage of kitchenhands meant venues like Sydney's Lucky Kwong resorted to using compostable plates. Chef Colin Wood, who worked at Michelin-starred New York hotspots like Estela, occasionally steps in to offer friends like Kylie Kwong a hand in the kitchen. 

He believes a major driver behind shortages is staff being overworked and underpaid, a longstanding industry-wide problem. "Particularly at Christmas time, the hours go up, workloads increase, more events happen and the chef running the kitchen has to organise outside of their normal hours," says Wood. "When your base salary is based solely on running a kitchen, you might not receive any extra monetary incentive, and this can cause them to leave."

The cost of eating sustainably

Labour costs aside, there's more happening on a plate of food than meets the eye. It all starts with the soil in which produce grows. Australia has experienced a pandemic, (un)natural disasters and an aggressive hike in petrol and transportation costs caused by the war in Ukraine. At one-point last year, even KFC was dishing up cabbage in lieu of lettuce due to skyrocketing lettuce prices.

Is it time for diners to be more aware of what's on their plate in order to appreciate and respect the time and thought that have gone into it?

Kim Driver is the managing director at Natoora Melbourne, a self-professed "food system revolution" and global company that supports local, small-scale growers and gets their produce into restaurants.

"We sell a bunch of red radishes from Jordan at Everlast Farm for $3.50," says Driver. "But you can buy a bunch of commercialised radishes from the market for $2. When a chef has both options - even the home consumer - they generally go for the cheaper option. But Jordan's is so much more nutritious; it grows sustainably, and the flavour is a million times better."

Helen Brock co-owns Timbarra Farm, a small-scale farm that sells 60 to 70 per cent of its produce to restaurants and Natoora. Brock encourages transparency between venues and their diners: 

"We've really encouraged every restaurant we serve here in the Yarra Valley to come to the farm first before we even begin a relationship. This includes their floor staff and chefs, as well as whoever is going to be involved in telling the story of the food. So, if diners ask a question about a dish, they have the capacity to say 'we got that from 20 kilometres down the road from a family-run farm' and it's all part of the story," says Brock. "I think a really good chef is really, really into that story."

Why service isn’t the only thing that matters

The cost of eating sustainably is determined not only by how and where produce is grown, but by the well-being of those who work tirelessly to feed us. Wood recalls times where he would shovel in food, hunched over a bin on a speedy two-minute break, or work 70-hour weeks and lash out on hour 69 at someone who had asked him a question. 

These aren't isolated experiences. Tough working conditions imposed on hospitality staff foster toxic workplaces "full of fear and anger."

Ngoc Tran is the head chef and owner of Brunswick's Shop Bao Ngoc. They've pivoted their casual Vietnamese eatery to operate on their own terms and open as they feel. They liken the mounting pressure during service to episode seven of The Bear, in which a pre-ordering ticket system has been left on overnight and paper dockets litter the venue with no end in sight. It's one long take of escalating anxiety.

"The thing is, when you do hospitality and you work yourself into the ground, you really start dissociating with your body," says Tran. "When I'd burn myself, I wouldn't have time to run it under cold water. I just had to keep going. Moments like these led me to start this journey of finding ways to set boundaries in an industry that I really love." 

Tran places community at the heart of what they do and offers pay-as-you-feel phở nights when they can, and sling bánh mì to make a profit on days they feel like cooking. They liken it to a "reciprocal relationship" where they can trust diners to respect them and their system and, in turn, get fed when they need it.

Smaller, independently owned businesses are the backbone of the industry, the flavour making underdogs. 

Wood fondly recalls his time working at Melbourne's Anchovy and the positive relationship that owners Thi Le and Jia-Yen Lee have with their staff. "How they communicate and nourish each other is very different from the confines of working in a big group. Those larger businesses homogenise and become about profit over people."

Undoubtedly, there's a vicious cycle in Australia of large hospitality groups with high turnover offering higher rates and poaching staff from other venues, undermining workers' wellbeing and diluting the culture.

"Do you want to support a healthy ecosystem that supports community at every level to be expressive, or to be a part of the homogenisation of our culture?" asks Greentree.

It's a question we, as diners, must ask ourselves if we want to avoid biting the hand that feeds us.