Hospitality industry smitten on Valentine's Day as Australians ditch products for experiences
Australians are expected to spend more than ever this Valentine's Day, with new research predicting shoppers will part with an estimated $936 million ahead of the big day.
Research group IBISWorld has released its annual research, predicting a 3% increase in spending and a tonal shift for this year's Valentine's Day – more people will opt for experiences, rather than products.
IBISWorld industry analyst Jen Lee told SmartCompany television shows like MasterChef have encouraged consumers to eat out more.
"The surge in popularity of restaurants has been influenced by the popularity of shows like MasterChef highlighting food. It has influenced the way consumers are behaving toward food.
"People are appreciating food more and want to be part of the culture," Lee says.
IBISWorld Australia said on average Australians will spend an average of $41 on their beloved. Analysts examined spending in key areas such as confectionary, hospitality and greeting cards.
Spending on fancy restaurants, particularly those with a 'celebrity chef' in the kitchen, is expected to increase by 8% this year, the highest growth rate of the key areas. Over $34 million is expected to be spent on eating out this Thursday.
This year the largest amount is expected to be spent on romantic getaways, with couples spending over $437 million to escape for a long weekend to bed and breakfasts, hotels and countryside homes.
Last Valentine's Day the big winner was jewellery stores, with spending up 9% last year to $36.4 million, but the sector is predicted to plateau this year with growth of only 1.8%.
"I think consumers are spending more on less expensive goods like chocolate and generally trading downwards," Lee says.
The lowest spending increase is expected in the clothing and intimate apparel category, with a gain of just 0.1% to $66.67 million. Lee says the stagnant nature of this sector will negatively impact retailers.
"Retailers will definitely feel the impact of increased spending on eating out and romantic getaways, particularly jewellers and intimate apparel stores.
"Retail department stores like David Jones will particularly feel the pinch a bit," Lee says.
Waistlines will expand as large amounts of premium chocolates are consumed – analysts predict over $300 million will be spent on the tummy-pleasing treats.
Lee says chocolates will always be a favourite present for Valentine's Day because they are easy to buy.
"They're more convenient to purchase because you don't have to spend time shopping for them," Lee says.
As Valentine's Day sends hearts (and wallets) a flutter, take a look back at some entrepreneurs who have conquered both business and love.