With 85% of Australian restaurants adopting artificial intelligence, the industry is undergoing a digital transformation.
From automating mundane tasks to predicting customer preferences, AI is revolutionizing the dining experience.
To maximize efficiency and profitability, operators are turning to AI for data analytics, inventory management, menu development, scheduling, staff management, and dynamic pricing. As the industry navigates a challenging economic landscape, these technologies are proving crucial in driving revenue and reducing costs. Kylie Moncur, Chief Marketing Officer at Australia Venue Co., highlights the transformative potential of AI: “We’re building an AI-assisted data and insights solution that empowers our teams to make informed decisions quickly. This technology will be a game-changer for the industry.”
The Restaurant Trends and Diner Expectations report, which sought to understand how restaurants are delivering better guest experiences in the age of AI and automation, revealed reservations are up 26% year-over-year from Q1 2023 to Q1 2024. Not only are Australians dining out more – they’re also willing to spend up for elevated, personalised experiences, with one in six Australians willing to spend between $98-$291 per person for a meal out.
“Australia is home to tens of thousands of venues that add so much to the country economically, socially and culturally. Even as economic pressures persist, restaurants, bars and cafes are cementing themselves as a ‘third place’ – somewhere a person spends time besides home or work – that people crave,” commented Paul Hadida, Managing Director, APAC GTM at SevenRooms. “We found that when restaurants really get to know their customers while offering great experiences and value, people will prioritise them over their competitors. Venues who recognise and address what their customers want are establishing themselves as these third places in their communities, improving revenue and guest retention as a result.”
Elevating experiences
When analysing the factors that encourage people to return to restaurants and choose them as a ‘third place’, guest experience, upgrades and personalisation are critical – and consumers are willing to spend more for them. SevenRooms’ platform data shows that reservations with prepayments for events or experiences – such as a tasting menu, special promotion, bottomless brunch or bottle of champagne – generate >35% more than reservations without a pre-booking.
SevenRooms restaurants in Australia sold more than double the number of upgrades and experiences compared to the United States and United Kingdom, as Aussie consumers prioritise high-value, high-quality experiences. On average, Australian restaurants generated more than $34K in revenue per venue from upgrades.
Looking across generations, Gen Z dines out the most, with more than a quarter (26%) dining out more than five times per month and another 41% saying they dine out 3-4 times per month. Comparatively, Gen X and Baby Boomers are overwhelmingly eating at home with 66% of this group only eating out 1-2 times per month. While the frequency with which Australians visit venues differs across demographics, they all share in the desire for more convenience, personalisation and value. They reward the venues that offer that with their dollars and their loyalty.
“We know that our customers are contending with economic pressures and are being more intentional with their spending. To secure their patronage and earn their loyalty, we must continue to evolve and offer improved guest experiences,” said Robert Squillacioti, Chief Marketing Officer, Solotel. “For example, we introduced a Veuve Clicquot upgrade for diners at North Bondi Fish and have seen sales go through the roof. It’s just amazing. We know that’s what the clientele wants and drinks. The ability to just have it there and add that bottle to an experience has been really, really strong.”
But it’s not just about value and upgrades – atmosphere, ‘vibe’ and recognition are important too. Younger consumers are more influenced than older generations by personalised surprises like birthday or anniversary gifts. Men are 73% more likely than women to care about building a rapport and 50% more likely to care about being known by name with restaurant staff. Women, on the other hand, are more interested in atmosphere and ambience, personalised in-service surprises and the ease of securing a ‘walk-in’ seat or table.
“Every diner is unique, but they’re bound by wanting more than just a meal. The venues who provide this level of service are establishing an advantage over their competition,” Hadida added. “These meaningful, human interactions carry huge weight for consumers and huge value for operators. Technology is the key in enabling them to flourish – of which AI and automation are starting to play a much bigger role.”
More than half (53%) of SevenRooms reservations in Australia are made ‘day-of’, with the second-most popular time to book at 10+ days from the requested date (16%). Most people are either dining spontaneously or making important plans well in advance. A quarter (23%) of restaurant business comes from walk-ins, with 37% of Gen Zers, 31% of Millennials and 33% of Gen Xers valuing the ease of ‘walk-ins’.
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