Planning properly with hospitality precincts
Couple arrive at restaurant
- Who is driving?
- I am
- Orange Juice for you
- Patronage time: one hour
Couple arrive at party
- Who is driving?
- Me this time
- Water for you
- Well this is a drag
- Patronage time: one hour
Couple arrive at bar where friends have all gathered for a catch up after a movie
- Who’s driving?
- No one
- We caught the train
- A “few” drinks and hours later (no not total trashed face)
- Patronage time: a few hours and both in happy go mood
I guarantee the above has happened to people and/or couples more than once and where the sober driver might not be 100% with the party compared to those who can be more “relaxed” owing from them walking, cycling or catching transit instead.
What is this all about?
The rather stark difference between perception and realities between owners of hospitality facilities (bars, pubs, restaurants and cafes) and those who patronise them (you and me).
From The Conversation:
Car parking matters to Australian business. Restaurateurs in Australian cities often resist parking management regimes and push local government to increase parking spaces in restaurant precincts.
But are restaurateurs’ perceptions of the importance of car parking to their trade in line with reality?
Our research compared this perception to what is actually happening. We did this by looking at customers’ use of transport modes and their spending habits. Our survey focused on three major restaurant precincts in the city of Brisbane – Boundary Street, West End; Eagle Street in the city centre; and Caxton Street, Petrie Terrace.
To explore this question, restaurant businesses and customers were surveyed in parallel. This enabled us to cross-analyse businesses’ perceptions with customers’ travel behaviour. We were then able to evaluate the validity of restaurateurs’ perceptions about the importance of car travel and parking, along with perceptions about transport infrastructure needs.
The more the better?
The physical location of a restaurant in the competitive landscape of the city has long been known as a major factor in its likely success or failure.
Once restaurants are established in such environments they can do little about their location. All they can do is working to improve customer access to their premises.
Restaurateurs often do this by engaging in battles with local authorities about car parking. This happens particularly when they see themselves as being in competition with out-of-town or suburban centres with ample parking. And this is often provided free to the customer.
Observing customers’ behaviour
One in three customers in our study walked and/or cycled to the restaurant precincts.
Almost half the customers arrived by public transport, including bus, train and ferry.
In this case, Eagle Street scored highly. This was mainly due to it having the highest parking fee (A$30-$75 for three hours) of the three restaurant precincts. Even in Caxton Street, which has the cheapest parking ($11 for three hours), more than one in three customers travelled by public transport.
The survey results reveal a gap between the perceptions of restaurateurs and customers’ actual transport choices. They also have differing points of view on the importance of supplied parking.
………The following figure shows the difference between the customers’ actual travel mode share and the restaurants’ perception of mode share. Restaurateurs over-estimated by more than double the actual importance of customers who came by car. They neglected the contributions of customers who travelled by public transport (by bus and train).
However, the restaurateurs’ estimates of walking and cycling customers were close to their actual mode shares.
Customers who travel by car also bring in less revenue than the restaurateurs think. Based on our sample, customers who drove provided less than 20% of revenue for the restaurants they were frequenting.
The biggest portion of restaurant income (66%) came from customers who walked (25%) or took public transport (19% for bus, 16% for train and 6% for ferry).
What if customers act as restaurateurs expect?
Our research investigated whether restaurateurs are correct in believing that more parking will deliver them increased profits.
According to the simulation results, the percentage of car customers can be increased to 52% by reducing travel costs by 30%. This would be equivalent to $2.89 per person for customers who travelled by car.
However, if there were to be only 300 customers per day this would lead to a 2% decrease in total restaurant revenue. That is because the mode shift towards car use would come from higher-spending walking, cycling or public transport travellers.
However, making a similar intervention to reduce public transport cost by $2.89 (equal to a 55% cost reduction) would lead instead to an increase of 3% in total restaurant revenue.
The results of this approach at three major restaurant precincts in inner-city Brisbane confirm a real gap between the perceptions of the restaurateurs, as businesses, and what their customers actually do.
The findings also imply that restaurateurs would be better off advocating for improved public transport rather than for more parking. Increasing the share of higher-spending public transport users will ultimately boost total revenues.
Customers who walk, cycle or use public transport to get to the restaurant all contribute significantly more to trade than the business owners and managers realise.
Remember the three scenarios I loosely defined above? There is a reason why Sylvia Park is investing in a $9m hospitality precinct and Manukau is in the early phases of planning their hospitality precinct and that is both due to them sitting on major transit lines. Yes trains and busses that Manukau and Sylvia Park have good access to.
From my Public Life Survey observations last month:
Work to be done
Saturday shows potential of Manukau in retail and hospitality
Saturday to be honest was the day I was looking forward to in the Public Life Survey event. My observation points were:
- Outside Republic Bar on Amersham way next to the main northern entrance of the mall
- Southern entrance of the mall on Putney Way
- Manukau Station Road
- Manukau Plaza
Manukau Station Road I can tell you right now is desolate and un-inviting in the weekend. While it could serve as an access link between Manukau Station and Rainbows End the legacy of the road being State Highway 20 (thus a primary arterial between the Airport, Wiri and State Highway One until the South Western motorway opened in 2012) means it is still a four lane wide road with a large grass median in the middle.
With a bit of humanisation (and the addition of a Light Rail Transit system (Option 1) Manukau Station Road would become a more attractive access link between the two stations and Rainbows End.
The Putney Way entrance Manukau Mall (southern entrance) was busy as people were entering and exiting the mall either to/from the car park or Manukau Station. While the mall is a primary anchor flipping that car park into a “Town Centre” development while humanising Putney Way would give some serious muscle into getting the southern end of Manukau City Centre playing its part as a vibrant heart.
Manukau Plaza needs a bit of work with it isolated from the mall (blank walls) and lack of hospitality spaces (cafes) that would give you a reason to linger.
That said the Our Manukau group have been doing weekly markets and activities on Saturday in the plaza space showing what can be done to revitalise a large open space. Manukau Plaza is protected in the Unitary Plan so developments wont threaten it. As Manukau City Centre continues to development especially around its streets Manukau Plaza will become increasingly important as an open space in the middle of a high density urban core – a lung for people to “unwind” while still being in a highly urban environment.
The Republic Bar spot was my favourite and not just because you could grab a beer while counting and mingling.
Republic Bar is next to the main northern entrance to the mall, the entrance that leads to the cinemas as well. This entrance will be naturally busy given it is a Saturday and the counts definitely confirmed that. As I started at 4pm people were going in and out of the mall, 5pm people were grabbing early drinks before heading to the cinemas with 6pm the mall closed and people either drinking, eating or going to and from the cinemas. The point being people were lingering which gave activity and life to this small piece of Manukau City Centre.
If this can be replicated down the length of Amersham Way to Hayman Park we would get a hospitality laneway full of bars, cafes and restaurants humming away on a Saturday night giving Manukau a start on some decent night life. Given Manukau Bus and Rail Stations are less than 800 metres away accessing transit after a night out would not be that difficult.
The Metropolitan Centres (especially those with malls) are in the best position outside of the City Centre to work on their transit connections and strengthen their hospitality scenes.
Traditionally big suburban malls have faced inwards from their urban environment with big blank walls and seas of car parking surround the complex. This lead to the mall completely isolated from the surrounding urban environment and for a while now prone to changing tastes of consumers.
The day’s of driving or being driven to the mall for the weekend shop, a meal at the food court and maybe your hard-earned pocket-money gone down at the arcade parlour have long gone. With online retail eating away at traditional bricks-and-mortar stores, and digital-savy consumers looking for more sophisticated experiences the question was ‘can the mall survive?’
Public verse private space aside having the mall itself urbanise so it blends in with the urban fabric rather than isolating itself as in the past is a welcoming step. A mall that blends to the urban fabric is one more likely to be transit and pedestrian friendly compared to a mall that is inward looking and isolates itself from the world. Remember how I said consumers today have changing tastes and what a different experience? Driving to a mall and searching for a park is something millennials will find alienating compared to their parents. Rocking up to an urban mall by bus, train or bicycle to these consumers gives more of a sense of freedom and connection not only to the urban mall but the environment around.
Ultimate consequence? They are more likely to linger and spend money. Example: if you are like me and enjoy wet lunches or that tipple after a movie an urban mall that is served well by transit means I am not having to worry about driving home. Consequences of that? More likely to stay and spend more money. The consequences of lingering and spending more money? Apart from retailers and hospitality winning, I win through being in a relaxed state (no I do not drink to be plastered off my nut) which means better health (again I don’t get plastered off my nut) and better productivity towards the economy.
In the end it all comes down to the linger factor. And that linger factor means more or less money spent. Simply put if I am going to linger pre or post hospitality I am likely to spend more money. And I am likely to linger more if I caught transit to and from the restaurant or bar.
So how long will it take business owners to realise that transit is their friend and parking is not? In the end it comes down to my discretionary spend, how much I am likely to spend thus how much the bottom line is to be affected by my discretionary spending. And if that discretionary spend is likely to be higher in a restaurant because I caught transit rather than driving there, then as a business wouldn’t be fiscally prudent to make sure your place has decent transit connections?
Remember: it all comes down to the bottom line and as a contributor to that bottom line I am more likely to seek out your fine establishment if I can easily reach it by transit.