Celebrity chef issues grim warning for hospitality industry as he closes most of his Sydney restaurants: ‘You just can’t make money’

Chef, author and television personality Opel Khan has issued a grim warning for the Australian hospitality sector as he closes up most of his Sydney restaurants. 

‘Food costs have gone up 40 per cent, we can’t increase the price we charge customers. Wages are up, interest rates [are up],’ Khan said. 

The public figure, who boasts a whopping 2.8 million followers on Instagram, closed down his Opel Group website on Tuesday and gave an exclusive interview to the Sydney Morning Herald. 

The website, which previously displayed Kahn’s various restaurants in the Harbour City, now leads to an error message.  

In May, the chef replaced his upmarket Khanaa restaurant in Surry Hills with Bistronomie, a venue he marketed as hosting affordable eats for the tough times. 

It has now closed. 

Khan has also scrapped his plans to open a second Bistronomie outpost in the ill-fated Potts Point venue that previously housed the ex-Gastro Park and Antipodean restaurants. 

His hatted restaurant Metisse opened there in 2019. 

The luxury restaurant, named with the French word for mixed race, opened with head chef Benoit Lollichon, a graduate of Michelin star restaurant Guy Savoy.

Kahn told the publication that he has vacated Metisse and also made the difficult decision to shut down his tiny pasta restaurant called Acqua E Farina. 

‘A friend with lots of venues says you just can’t make money at the moment,’ he said. 

‘I’m going to take a little break, but I live and breathe food and wine so don’t count me out doing another restaurant.’

Those with the means to put their empires on ice until the economy turns a corner, like himself, are doing so. 

Meanwhile, smaller operators and family-owned businesses may be forced to shut their doors forever. 

Food costs have gone up 40 per cent, we can’t increase the price we charge customers. Wages are up, interest rates [are up],’ the celebrity chef said as he announced the closure of several high-profile restaurants

The Bangladeshi-Australian chef said that he has found new operators for his closed venues, with Acqua E Farina’s shop earmarked for a Vietnamese restaurant and the Surry Hills Bistronomie location going to a Chinese restaurant operator.

He will, however, keep the doors of his beloved Pizza Boccone in Potts Point open.  

It comes hot on the heels of a string of recent restaurant closures in major cities Sydney and Melbourne, including multiple Hog’s Breath cafe franchises, Epocha in the heart of Melbourne’s dining precinct, and Warike in Surry Hills last month. 

The Sydney fusion restaurant that was born during the Covid lockdowns was famed for its ‘divine’ take on Peruvian-Japanese that had diners raving about ‘inventive’ dishes such ceviche of scallop, oysters and kingfish.

Restaurants and cafes are failing at higher rates than other Australian businesses as consumers pinch their pennies and retail rents soar amid the cost-of-living crisis.

‘You just can’t make money at the moment,’ the former owner of French restaurant Metisse, affordable Surry Hills eatery Bistronomie, and Acqua E Farina in Potts Point said

Rents place a particularly high burden on food and beverage venues as they are typically located in high foot traffic retail strips and re-locating for better deals usually results in less trade. 

Food and beverage businesses were going under at the highest rate of all industries tracked by credit reporting bureau CreditorWatch.

In August, businesses in the industry were failing at a rate of 8.2 per cent.

Hospitality businesses are particularly vulnerable to higher interest rates, as consumers rein back on discretionary spending.

CreditorWatch chief economist Anneke Thompson said conditions had deteriorated quite rapidly for the sector after a good run post-Covid lockdowns when people had no opportunity to spend on going out or holidays.

But much higher mortgage repayments and rents have since started to weigh heavily on consumer spending, making it difficult to increase menu prices to cover higher business costs.

Overall business failure rates had jumped 17.3 per cent since January and are now at their highest level since early 2021, which was deep in the COVID-19 pandemic.

Business Council chief executive officer Bran Black says it’s not just the economic climate making it harder to run a business but political decisions as well.

In a speech to the business lobby’s annual dinner on Tuesday, Mr Black took aim at the federal government’s workplace changes, saying they were a handbrake on hiring.

Prime Minister Anthony Albanese, who spoke at the same event, countered by saying job creation had been strong under the reforms.

Mr Albanese expects Thursday’s labour force data to show one million new jobs have been created on his watch.

‘We are proudly pro-business and pro-worker,’ he said in a speech.

‘We understand secure jobs and fair wages depend on thriving businesses, just as we know productivity gains depend on skilled workers and safe workplaces.’

Mr Thompson said Australian businesses were operating under extremely challenging conditions.

Low levels of consumer spending, high inflation and interest rate increases have been putting pressure on businesses.

Yet high failure rates also reflected a level of ‘catch-up’ from pandemic-era lows, Ms Thompson said, when many businesses were saved by JobKeeper payments and a pause on tax office debt collection for firms.