Staffing, costs, changing eating trends behind Australian motel restaurants left vacant

Accommodation Australia CEO Michael Johnson says there was once limited eating options apart from motel restaurants. (Suppled: National Archives Australia)

Around Australia, a growing number of motels are becoming custodians of vacant spaces.

Restaurants once filled with guests are now being used as storage, conference rooms, or common areas with hidden industrial kitchens often sitting idle.

Accommodation Australia CEO Michael Johnson says while some motels continue to operate restaurants and serve breakfast, the organisation has overwhelmingly seen a trend towards their closure for years.

“It’s been on a steady decline for some years,” he says.

“Certainly in the 60s and 70s when we built a lot of motels, it was the heyday.

“But we’re not building motels anymore.”

Mr Johnson says while motels still service a massive part of the accommodation market, particularly in regional towns, fewer motels are operating built-in restaurants.

“There are not too many motels now that are operating the restaurants or if they are they’ve cut back their operating hours substantially,” he says.

“What we found today is a lot of motels would rather see you use external restaurants. And they’ll just take room revenue as their bread and butter, because of the expense of running a restaurant.

“If you don’t have a local market, your in-house market for a motel will not be enough to make it profitable.

“It’s also so difficult to get a good chef to come and live in a remote location, or regional locations where the motels are — so many of those restaurants are now meeting rooms.”

‘The good old days’

According to Accommodation Australia, in 1985 there were about 2,700 motels in Australia but only about 2,400 now.

This is evident in a photograph by Australian photographer Wolfgang Sievers, which depicts a full dining room in a Melbourne motel bustling with activity.

“It was the good old days where you checked into your motel, you had to make a booking for your dinner, and everyone in the motel pretty much dined in the restaurant because there was nothing else on offer, but now there are more offerings out there,” he says.

“There was always that romance but then everyone works out that the accommodation is not that difficult to run, but geez the restaurant is difficult.

“Cost of food and beverages have gone up to the extent where you’ve got to be doing solid numbers to make a dollar. Otherwise, your rooms are making money and they’re just subsidising your restaurant, which is losing money.”

Mr Johnson says even without restaurants, a post-COVID boom in domestic travel has benefited motels Australia wide and he does not expect their presence on the market to go away any time soon.

It’s a familiar story to motel owner Sachin Gupta in Wodonga, Victoria, who says he was pleased to purchase a motel without a restaurant four years ago.

“Some of my friends have motels with restaurants as well, but normally they tell me it’s not more profitable to run, and it adds a lot of stress as well,” he says.

“There are lots of restaurants surrounding my motel, so I think the people have lots of options as well as uber eats and door dash.

“You spend lots of money to manage everything, but you can’t really earn anything because unless you have a big motel with 50 or 60 rooms it’s very hard to manage.”

‘For the community’

Geetu Nanda’s family motel at Tawonga in Victoria’s High Country is bucking this trend, offering something new.

Ms Nanda, her husband, and extended family took over the 40-year-old motel with panoramic mountain views six years ago, deciding to open the long-forgotten restaurant in a town with a population of only 568.

“This was a run-down business; they had not fully operated the restaurant for 20 years, but it’s my passion,” she says.

“We wanted to bring people back and open it again for the community.

“It was a big challenge for us, like how are we going to operate in a small town, how are locals going to react? We had a bit of fear.”

Ms Nanda says the infrastructure of the former restaurant remained viable for its resurrection.

“The commercial kitchen was here, the cool room was here, so we thought let’s give it a try,” she says.

“There is nothing else here in Tawonga, and there are no taxi services to the nearest town.

“After we maintain the accommodation there’s not much for us to do, so we feel like this is a good thing for us to keep ourselves busy.”

Ms Nanda is one of a number of motel owners revitalising the old spaces and reaping the benefits.

She says the Tawonga community and visitors from nearby towns have responded well to the authentic Indian cuisine the restaurant is now offering.

“I think we made a small mistake when we started. We were only cooking Aussie pub food but one of our chefs said we should actually cook our own food, Indian food,” Ms Nanda says.

“Now people love it, they love coming here, they love the environment.

“We may not always make a profit, but we’re giving back to the community and that’s what’s most important.”