Hospitality sector deflated as RBA keeps cash rate on hold
Australia’s hospitality sector has been left disheartened by the Reserve Bank of Australia's (RBA) decision to keep the cash rate steady at 3.85%, dashing hopes for financial relief amid growing cost pressures.
One in 10 hospitality businesses have shut their doors in the past year, according to data from CreditorWatch, and many operators had been banking on a rate cut to spur consumer spending and ease their own borrowing costs.
Roger Awar, owner of Adelaide café Fresco-Bah, described the RBA's move as a double hit to small business owners.
"It's a little bit disappointing – because it doesn't look after us as business owners," Awar said. "We would like people to have more disposable income so we could have more customer spend – you see everything else has gone up – interest rates coming down would definitely help."
Patrick Coughlan, co-founder of Riversdale Group and the Australian Pub Fund, noted that rate cuts tend to have an immediate impact on the industry.
"Our data is certainly showing the second half of the year is going to be a bit kinder," Coughlan told 9News.
The next RBA meeting is set for August, giving business owners and mortgage holders at least five weeks before another decision.
For the first time, the central bank also revealed the split vote behind the decision: six members favoured holding rates, while three supported a cut.
Jonathan Jackson, 10th July 2025
