Hospitality marketing
What a regular
is worth.
There's no published Australian benchmark for how much venues spend on marketing, so start from your margins instead. The ATO's benchmarks from 2023-24 tax returns show restaurants' total expenses averaging 84% to 91% of turnover, depending on size, so every marketing dollar comes out of a thin slice. Work out what a regular is worth in gross profit each year, then spend on what wins and keeps regulars.
The honest answer
on percentages.
Search 'how much should a restaurant spend on marketing' and you'll get a neat percentage of revenue, usually from overseas sources. I couldn't find an Australian survey that measures it, and the ATO's small business benchmarks for restaurants, coffee shops and pubs, taverns and bars don't include an advertising line at all.
That doesn't mean guess. It means work from numbers you do have: turnover, food and drink costs, what a regular spends and how often they come. A percentage someone else picked can't tell you whether $600 of ads last month paid for itself. Your covers can.
What the ATO
numbers say.
From the ATO's small business benchmarks, which use 2023-24 tax returns. Cost of sales is mainly food and drink. Total expenses is everything the business claims, including wages and rent.
Read the last column the other way round. A restaurant in Newcastle turning over $1.2 million averages 88% in expenses, which leaves about 12 cents in the dollar. For a sole trader or partnership that slice usually has to cover the owner's own pay too, because owners in those structures don't pay themselves a wage. Marketing comes out of the 88% or out of the 12. Either way it has to earn its place.
| Venue (2023-24 tax returns) | Turnover | Cost of sales, average | Total expenses, average |
|---|---|---|---|
| Restaurants | $65,000 to $500,000 | 35% | 84% |
| Restaurants | $500,001 to $2m | 35% | 88% |
| Restaurants | Over $2m | 34% | 91% |
| Coffee shops | $65,000 to $250,000 | 38% | 79% |
| Coffee shops | $250,001 to $600,000 | 38% | 86% |
| Coffee shops | Over $600,000 | 36% | 89% |
| Pubs, taverns and bars | $100,000 to $750,000 | 40% | 84% |
| Pubs, taverns and bars | $750,001 to $2.5m | 37% | 89% |
| Pubs, taverns and bars | Over $2.5m | 37% | 91% |
What a regular
is really worth.
A regular's value isn't what they spend. It's what's left after the food and drink they eat. Hey You's Daily Brew Report, built with Westpac data, put the average café transaction at $17.70 in June 2025. A regular who spends that twice a week for a year spends about $1,840. At the ATO's 38% average cost of sales for most cafés, about $1,140 of that is gross profit, before wages and rent.
How often people come matters as much as what they spend. Lightspeed's 2024 survey of more than 1,000 Australian diners found the average person eats out around 38 times a year and goes out for a drink 23 times. Your regulars are the ones well above that. In the US, Toast's data suggests up to 50% of a restaurant's order volume can come from just 7% of guests. No Australian equivalent has been published, but most owners can name their top twenty customers without looking.
What a regular is worth
Worth more
than the bill.
Pick your kind of venue and turnover, and the ATO's averages fill in your costs. Change them to your own if you know them. Spend, visits and budget start as made-up numbers.
One regular, a year, in gross profit
-
Where the
money goes first.
The cheapest marketing a venue does costs time, not money: a current Google profile, a menu written as text, replies to reviews. Do those before paying for anything. The Google profile page covers what to fix.
Then count the costs you already pay without calling them marketing. A delivery app's commission is an acquisition cost: Uber Eats publishes 30% when it delivers. Paying that once to win a new customer can be fine. Paying it every week for a regular who'd happily order direct isn't, which is what the direct ordering page is about.
- Free first: Google profile, menu, hours, review replies, photos.
- Then the leaks: app commission on regulars, discounts on nights that fill anyway.
- Then paid: ads for the quiet services, with a cap and a way to count bookings.
Set the budget
from the goal.
Flip the question. Instead of 'what percentage?', ask 'how many new regulars do I need this month, and what can I pay for each?' If a regular is worth $1,140 a year in gross profit and you want your money back inside a year, you could pay up to that to win one. Wages and rent still need covering, so aim well under it.
Then test it on one service. Spend a capped amount for four weeks on a quiet Tuesday, count covers against the four weeks before, and ask new faces how they found you. If ten extra covers a week turn into two or three people who keep coming back, the maths works. If not, stop and try the next idea. The 30-day plan lays that test out week by week.
What I see most often
What I'd check first
in a venue's marketing spend.
- 1
A borrowed percentage
A budget set as a share of revenue someone read about, with no link to covers, regulars or which nights need help.
- 2
App commission not counted
Delivery commission treated as a cost of doing business rather than the biggest marketing line, often paid on the venue's most loyal customers.
- 3
Spend with no counting
Ads and boosted posts running for months with no booking link, code or before-and-after covers to show what they did.
The honest bit. If your cost of sales sits well above the ATO range, fix menu pricing before you spend a cent on marketing. More customers at a bad margin just means working harder to lose money faster.
Questions
people ask.
How much should a restaurant spend on marketing in Australia?
There's no reliable Australian benchmark, and the ATO's restaurant benchmarks don't include one. Set it from what a regular is worth to you in gross profit, and test on quiet services before you spend more.
What is the average profit margin for a restaurant in Australia?
The ATO's benchmarks from 2023-24 returns put restaurants' total expenses at an average of 84% to 91% of turnover, depending on size, which leaves roughly 9% to 16% before tax. For sole traders and partnerships, that usually includes the owner's own pay.
What is a normal cost of sales for a café?
The ATO's key range for coffee shops is 33% to 42% of turnover across its turnover bands, with averages of 36% to 38%. Sitting above the range can point to pricing or waste problems.
How much do Australians spend at cafés?
Hey You and Westpac data put the average café transaction at $17.70 in June 2025, up 2.1% on the year before.
How do I work out what a regular customer is worth to my restaurant?
Spend per visit, times visits a year, times years they stay, times your gross margin (one minus cost of sales). The calculator on this page does it, starting from the ATO's averages.
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