THE QUIET REASON GREAT MELB VENUES ARE CLOSING (IT’S NOT THE FOOD)

Why Melbourne’s Hatted Restaurants Are Closing While World-Famous Chefs Are Moving In

Melbourne’s dining scene is sending two very different signals at once. In recent weeks, several well-loved bars and hatted restaurants have closed their doors, while one of the most decorated chefs in the world has chosen the city for her first Australian restaurant. The contrast is a handy case study for any venue manager thinking about where hospitality money is going, and where it is draining away.

The closures are not about quality

Reporting from The Age lists a run of recent closures. Byrdi, ranked 91st on last year’s World’s 50 Best Bars longlist, shut after seven years in the Melbourne Central food court. Craft beer bar Benchwarmer in West Melbourne called last drinks in mid-September. Tiny Bar in Brunswick East will close on 9 October after two years. Hatted diners Matilda 159 in South Yarra and No. 7 Healesville have also closed, along with several other neighbourhood venues.

The reasons are consistent and practical. Benchwarmer owner Lachlan Jones said the bar had not turned a profit in a couple of years, citing weak night-time foot traffic and a local customer base that was not sustainable. He also observed that with the cost of living rising, craft beer has come to be seen as a luxury, and that some beer enthusiasts who once drank at craft bars have gone back to the pub, which many see as better value. Tiny Bar’s co-owner Zac Shearer said business was busy and figures were rising, but the thought of another two years of the same workload in a small space with a small team did not add up.

Notably, some of the closures came with a quality that was never in question. The team at No. 7 Healesville said they were finishing at a point where their offering had never been better. Good food and a good reputation were not enough to protect the numbers. Scott Pickett, the chef behind Matilda, said handing the South Yarra site to Julien Moussi’s Venues by Only group, which also runs the Godby Hotel and Beehive Hotel, made sense from a commercial perspective. It is now Kiki’s Tavern, an all-day eatery, which is a quiet sign of where pub-style operators see opportunity.

Meanwhile, a three-Michelin-star chef bets on a hotel

Against that backdrop, Dominique Crenn, who holds three Michelin stars at her San Francisco restaurant, will open Petit Crenn at InterContinental Melbourne The Rialto in October. It is a 40 seat, all-day venue serving pastries and coffee in the morning and bistro dishes and cocktails through lunch and dinner, in a ground floor site that until recently housed a Haigh’s Chocolates store. Crenn told The Age that she wants to be part of the community and plans to work with local farmers and producers, naming Great Ocean Ducks and Five Tales Farm among them.

The venue is a partnership with Salter Brothers, which owns the InterContinental and also runs Rick Stein’s NSW restaurants. The Age reports Crenn is the first of a wave of big-name international arrivals, with chefs from Bangkok and Sweden set to open in Sydney and Perth in 2027, and Mott 32 coming to Crown Melbourne.

Two models, one common thread

The closures and the arrival look contradictory, but the underlying lesson is the same. Venues struggling to survive were mostly standalone neighbourhood sites that relied on a thin local crowd and unsteady evening trade. The new arrival is anchored in a hotel with a property partner behind it, an all-day trading pattern that captures morning coffee through to dinner, and a casual format that keeps the cost base manageable. Hotels and large venues have something small independents lack: built-in foot traffic and the ability to spread fixed costs across many revenue streams.

What this means for venue managers

Look hard at your trading hours and ask when each part of your venue earns its keep. An all-day model, from coffee to cocktails, can lift revenue without a bigger fit-out. If you run a food and beverage offer inside a hotel or club, you hold an advantage that independents envy, so use it by bringing in strong operators or concepts rather than treating the restaurant as an afterthought. Watch value perceptions closely. The comment that craft beer drinkers are drifting back to the pub is a reminder that your core offer, priced fairly, remains a powerful draw. Above all, do not rely on goodwill alone. Customers who tell you they love your venue need to turn up regularly for it to survive.

Sources

• The Age, “‘A bit traumatic’: Hatted restaurants and neighbourhood bars close across Melbourne” — https://www.theage.com.au/goodfood/melbourne-eating-out/victorian-restaurant-closures-2026-20260928-p610g0.html

• The Age, “Three-Michelin-starred Dominique Crenn chooses Melbourne for her next restaurant” — https://www.theage.com.au/goodfood/melbourne-eating-out/three-michelin-starred-dominique-crenn-chooses-melbourne-for-her-next-restaurant-20260907-p60v5c.html