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Sydney’s Mayflower has a 15% public holiday surcharge. But it’s still losing money
On Good Friday and Easter Monday, St Leonards cafe Mayflower and its sister venue of the same name in Darlinghurst will stay open and serve patrons eager for coffee and brunch on the long weekend.
Customers will be charged 15 per cent more than normal on the final bill to cover a surcharge imposed by nearly all hospitality establishments trading during public holidays, which will take the cost of their popular truffle croque monsieur to $24.15 and an Aperol Spritz to $20.70.
The additional charge may seem steep to Australians as the cost of living edges up, but Mayflower co-owner Christian Lee says the business isn’t making any extra money from the surcharge – far from it.
“We operate at a loss,” he said. “The public holiday surcharge is to make up as much of the double wages [as possible] because we’re paying double time. For a small to medium operation like ours, sometimes it’s not even worth opening on public holidays.”
In NSW, penalty rates for staff working on public holidays can vary widely depending on the industry award and qualification, but is generally 200 per cent or more that of a worker’s typical hourly wage.
For Lee, the penalty rates means the St Leonards team of 10 will be paid a combined $4000 for working Friday alone. The customer surcharge barely covers the penalty rates – let alone the cost of food, electricity, and other utilities bills.
Just to break even, the eatery would have to rake in turnover of at least $9000 that day.
“That’s impossible for us,” he said. “We’re not going to make any money. But we just want to stay open to cater for the community.”
Lee is conscious many of his peers are in the same boat. “Other businesses don’t even bother [to open on public holidays]. ‘Why would we open and make a loss?’.” He believes it’s the bigger players in the hospitality industry like Merivale that have the sufficient scale to be profitable on a public holiday.
The decision to stay open on a public holiday is a collaborative one: Lee consults his team on whether they want to work on public holidays at all. “We ask our staff,” he said. “They’re happy to make a bit of extra money.”
‘When a business imposes an additional fee or charge to a transaction, they need to disclose this upfront so that consumers can make an informed purchasing decision.’
Australian Competition and Consumer Commission spokesperson
Lee and business partner Kevin Ly opened Mayflower’s Darlinghurst venue in August 2020, in the midst of lockdowns, with a public holiday surcharge of 10 per cent. By the end of the year, they raised this to 15 per cent after realising that they were operating at a loss for every public holiday they stayed open.
Lee says he hopes customers will be forgiving to hospitality venues for charging a little extra on these days.
“If people don’t understand, they judge,” he said. “Even though the economy is tough at the moment, it’s tough for business owners to stay open and operate as well.”
Wes Lambert, deputy chair of the Australian Foodservice Advocacy Body, said wages usually made up 40 to 50 per cent of a hospitality business’ costs.
“As inflation and work shortages has led to a sharp increase in the hourly rate in hospitality over the past few years, surcharges are now the norm rather than the exception,” Lambert said.
“Hospitality professionals work on public holidays, so Australians can enjoy the time off, and no one should be asking them to lose money by providing a valuable service – it’s the only way many small businesses in the industry can be open.”
Restaurants and cafes are exempt from requirements under Australian Consumer Law that businesses display “total” prices for their goods, including additional charges and taxes. Those that rely on the exemption must ensure that a consumer who looks at a price on a menu can immediately determine that the price displayed on the menu is not the final price that they will be charged.
The Australian Competition and Consumer Commission says hospitality businesses can impose weekend and public holiday surcharges as long as it is prominently displayed on food and drink menus.
The following words must be displayed on menus: “A surcharge of [percentage] applies on [day or days].”
“When a business imposes an additional fee or charge to a transaction, they need to disclose this upfront so that consumers can make an informed purchasing decision,” an ACCC spokesperson said.
But the consumer watchdog has no say on how much a business can charge for weekend or public holiday surcharges, leaving it up to the restaurant or cafe to determine that figure.
The ceiling for public holiday surcharges seems to hover around 20 per cent. Mayflower’s 15 per cent still doesn’t go far enough, but Lee is hesitant to raise the figure much higher than that.
“Twenty per cent is a bit much, as a consumer,” he said.
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