Let’s make this quick, because these closures are coming thick and fast. In recent weeks, Melbourne institution La Luna has announced its last service, Kylie Kwong has left the restaurant industry, and Sydney icon Tetsuya’s has called time after 35 years. And those are just some of the high-profile casualties, the tip of a very big iceberg. Will anything still be open by the time you finish this article?

Restaurants barely make financial sense at the best of times. And right now, we’re a long way from the best of times. Industry wages are higher than ever and until recently, no one could find staff. And now that the post-Covid labour shortage in the hospitality industry is receding, it’s being replaced by the inverse problem: an oversupply of job-hunters, prompted by closures, applying for roles they’re over-qualified for. Ingredients are scarcer and whatever’s available has been inflated beyond the tolerance threshold of what suppliers, chefs and – inevitably – customers are comfortable paying. As anyone who’s tried to buy a tomato or a capsicum at the shops in the last fortnight could tell you, everything just costs too much right now.

The pandemic’s legacy in Australia, from dining habit changes to 10-year increases to payroll tax to recoup debt, continues to reveal itself. Technically, if you squint really hard, we’re not in a recession. But technicalities are a cold comfort. Everyone, and every industry, is feeling the pinch. So who would open a restaurant under these conditions? Or keep running one?

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Last month, in an office tower in North Sydney, the Australian Restaurant & Cafe Association, Arca, held its first meeting. It’s a lobby group advocating to the government on behalf of the 50,000 restaurants and cafes in Australia. The inaugural members, which include Merivale and Lucas Restaurants, own some of the country’s most popular venues. Its mission is straightforward: with the hospitality sector being one of Australia’s largest employers, Arca wants to ensure that Canberra, and the various state governments, understand the downstream effect its policies will have on the industry.

Arca argues its high-profile members can use their combined influence to achieve meaningful policy changes that will benefit venues of all sizes – now and the next time things get this dire. Its critics say that it’s a PR exercise that’s neglectful of independent restaurants, and that certain members, some of whom have been questioned for their business practices in recent years, oughtn’t present themselves as industry leaders.

“I think it’s incumbent upon people like us, who have been around a long time, to contribute,” Lucas tells Broadsheet after the conference. “We can’t just sit on the sidelines and just criticise government – we have to come together as an industry, get in there, be proactive, come up with solutions and get a dialogue going.

“The industry’s bigger than it’s ever been, it employs more people than it ever has, but at the end of the day, the model’s broken,” Lucas continues. “Think about the social role we play in the community. Imagine a city like Sydney without its restaurants, or Melbourne without its restaurants – it’s just a lot of empty buildings.”

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Many restaurant owners, from seasoned veterans to the bright-eyed and bushy-tailed, aren’t waiting to see how things pan out. They’re getting out now. In 2016, chef Mark Best closed his long-running, internationally acclaimed Sydney restaurant Marque, seemingly at the height of his powers. He’s moved away from restaurant ownership into hospitality consulting, including working on the food and beverage at the Ritz-Carlton in Melbourne and the Calile Hotel in Brisbane.

“Every time someone comes to me and says ‘I want to open a restaurant’, my first piece of advice is ‘Don’t do it’,” says Best. “And if they still want to proceed, I say ‘Alright, well you’re going to need a lot of money’.”

While acknowledging the challenges facing the industry right now (“Covid has wagged a long, long tail, and continues to”), Best is also clear-eyed about hospitality as a whole. “The restaurant industry has always been hard, always will be hard, is hard now, and will be hard in the future.

“There’s a new financial cycle every 10 to 12 years – in the year 2000 we almost went broke when everybody was building up for the Olympics, then the Global Financial Crisis came in after that. We’ll have people doing well during this cycle, and we’ll have people exiting this cycle, and then you’ll just have people hanging on.”

Best suggests that one potential explanation for all of these restaurant closures, both past and projected, is oversupply. “There are no moats around the industry, so it’s quite easy for someone to follow their passion, open a restaurant with no business model, no comparative advantage, and throw their life savings into it, and only some of it sticks,” he says. “Then you also have a lot of low-information, rich people getting into it as well who’ve always dreamed of opening a restaurant. This industry is littered with millionaires who’ve turned large fortunes into small fortunes by going into a restaurant without knowing what they’re doing.”

Although it’s certainly hard to open a restaurant right now, Best thinks it’s even harder to keep one open. “I think you’ve got a greater chance of survival if you were to start a restaurant now than people who are already in it,” he says. “When you’re new, you’re not carrying any debt, and it’s easier to fill a new restaurant – with our margins, you can completely undo five good years very easily.”

So ultimately, it comes down to trying to adapt – and if you can’t, then it’s about deciding whether to hold them or whether to fold them.

“We were lucky enough to be at the top of the tree for a long time,” Best says. “We were in the World’s 50 Best, we did all that – and when that went away, my model no longer worked, so we got out. In this industry, we’re notoriously bad at looking at the cold, hard line of a spreadsheet – but sometimes you’ve got to give yourself a good splash of water in the basin, look yourself in the mirror and go – where am I really at?

“Sometimes, it’s better to walk away from the battlefield to fight another day than it is to just carry on.”

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But what if you have to carry on?

Shannon Martinez’s beloved Melbourne restaurant Smith & Daughters has just celebrated its 10th anniversary. When Broadsheet speaks with her, she’s just gotten back from her accountant, where they sat down to figure out how to stay open. How did it go?

“As depressing as usual,” says Martinez. “I spent everything I had during Covid to keep us open and keep my staff employed – there was no back-up money.”

Martinez says she hasn’t taken a wage in five years. When the lease on her Brunswick Street premises ended, she accepted a loan from the state government to finance a move to a new location in Collingwood. Now, with depleted savings, interest rates nowhere near going down, higher payroll taxes, and ingredient prices continuing to rocket, the debts are due.

“That’s really what’s killing us,” Martinez says. “Everything that the government is doing to us without any help – during Covid, obviously, there was support, but now they’re just washing their hands of it, leaving us to fend for ourselves like nothing ever happened.

“So I can’t close down, I have to keep it open and try to pay everything off.”

And Smith & Daughters is no outlier. Across Australia, thousands of restaurants, many of which would probably rank among your favourite venues, are in the same situation. And independent restaurants without private investment are in the firing line.

“The ones that will survive are the ones that are getting money pumped into them,” Martinez says. “People like me, whose funds are only coming from me, will only last so long.”

For Martinez, this moment is a more precarious time for the industry than the pandemic ever was.

“This is way worse than Covid, whenever I’m going out with mates that have restaurants, they all say the same thing. I know we don’t want to paint this picture of doom and gloom, but the reality is that’s exactly what’s going on. Literally every week, I’m trying to figure out how I can stay open for another week.”

With average spend per head down and overall dining frequency dropping, Martinez is doing what she can to adapt, but can’t see a clear way forward.

“I totally understand why people aren’t spending, I get it. I’m not really spending myself, but that doesn’t change the fact that I don’t know how this industry is going to survive.

“During Covid we pivoted and pivoted and pivoted, so many fucking times that our ankles are broken now,” she says. “I’ve put my whole life into my business, and I absolutely love it, but I’m fucking tired. But I’m going to keep trying until there’s nothing left.”

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Would it be crazy to open a restaurant right now? Probably. It’s definitely as risky as it’s ever been. Maybe even risker. But it’s got nothing on owning one that’s already open. So if you’ve got that birthday dinner coming up, or doing those farewell drinks, or even putting a coffee catch-up in the calendar, consider not doing it at that brand new spot. Go to a place that you love, which you haven’t been to for a while, instead. Go while you still can.