Upscale restaurant Prince Dining Room has closed just five months after a splashy relaunch. Was the failure specific to this outlet, or is St Kilda on the skids?

In May, the flagship offering at landmark Acland Street hotel The Prince announced Sydney chef Mitch Orr as creative director, promising “a daring new flavour palette” and “left-of-centre snacks”.

But the first-floor space never hit its stride. Once the home of three-hatted restaurant Circa and a proving ground for chefs including Andrew McConnell and Michael Lambie, in June the restaurant was already offering half-priced dining.

In August, Besha Rodell, chief restaurant critic at The Age, found elements of the food baffling and poorly executed. On October 5, Prince Dining Room served its final dinner and is now taking inquiries for functions.

According to The Prince’s website, the 1937 art deco landmark is “a jack of all trades, evolving and reincarnating itself to satisfy the ever-changing hospitality landscape”. If that shifting landscape doesn’t mean a plush dining room serving lamb rump for $50, what does it mean?

“We’ll spend time talking to customers to see what they want,” says Australian Venue Co CEO Paul Waterson, who took over the lease in June. The group has bet big on St Kilda, with large pubs Hotel Esplanade and Village Belle also in its portfolio.

“Visitor spend is up 126 per cent on pubs, taverns and bars compared to last year.”

Port Phillip CEO Chris Carroll

“St Kilda is going along relatively well, year on year,” says Waterson. “At the Espy, we are seeing reduced trade in some of the restaurants but it’s offset by pub dining. It’s a tougher economic time and people are looking at how to spread their hospitality dollar further. They can go out more frequently if dining is more accessible, which is why pubs are going pretty well.”

The local council’s economic data bears that out. “Over the past year, we have seen a significant change in the types of venues in the area, with a pivot away from restaurants and cafes and an increase in pubs, taverns, and bars,” says City of Port Phillip CEO Chris Carroll. “Visitor spend is up 126 per cent on pubs, taverns and bars compared to last year.”

Liam Ganley owns casual venues Freddie Wimpoles at the George Hotel and Irish bar The Fifth Province, both on Fitzroy Street. “Last week was the busiest we’ve ever had,” he says. The Fifth Province recently added a whiskey bar and celebrated its 10th birthday the night Prince Dining Room closed.

Ganley believes his success is based on pitching to the right market. “St Kilda is a working-class suburb with an eclectic mix of people. High-end venues struggle. The Prince used to be hi-vis vests and typical St Kilda locals and those people felt displaced.”

During a decade trading on the strip – and with businesses in Prahran and Mornington to compare it to – he’s found St Kilda particularly price-sensitive. “People shop around, look for deals.”

Saint Hotel, a few steps from The Fifth Province, has undergone several reboots. In its most recent guise, as an Italian-leaning pub with celebrity chef Karen Martini at the helm, it targets higher-spending diners. It’s busy at times, but is beset by uncertainty as its Sydney-based owner, Public Hospitality, negotiates a debt crisis.

Closer to St Kilda Junction, new sports bar Harvey’s has attracted a strong local crowd with keenly priced happy hours, free snacks and trivia nights, as well as drawing sports fans to watch games and fights on huge screens.

All businesses in St Kilda face seasonal and weather-dependent fluctuations. “Winter it’s all locals but summertime draws thousands of people,” says Liam Ganley. “There aren’t too many places busier in Victoria than St Kilda in January.”

Beyond annual peaks and dips, St Kilda is more weather-affected than other places. “Being synonymous with the beach, St Kilda sees a dip in patronage during periods of poor weather,” says City of Port Phillip’s Chris Carroll.
“September this year was particularly wet (20 days of rain, compared to seven rainy days in September 2023), with our council seeing this reflected in our precinct spend data.”

Some businesses are well-placed to ride through chilly headwinds, both economic and meteorological. Italian institution Cicciolina has been trading on Acland Street for more than 30 years. “We had a great winter and coming into summer we haven’t looked back,” says co-owner Barb Dight. “Occupancy rates are up and that gives the street a different feel.”

Neighbourhood statistics back her perspective. There’s been an 8 per cent increase in spending on hospitality in Acland Street compared to last year, while the increase on Fitzroy Street is a more modest 2 per cent, with most of that skewed to the nighttime economy.

Beyond Prince Dining Room, two other longstanding local businesses closed recently. Cafe owner Darren Robinson blames statewide economic conditions for the shuttering of Fitzrovia, which traded in Fitzroy Street from late 2011 until the end of September.

Reduced consumer spending and higher wage costs were a factor, but Robinson draws a straight line between Victorian government borrowing to fund the Big Build and increases in land tax, compliance costs, and reduced spending on social services that have entrenched the issue of homelessness in St Kilda.

Robinson was punched while delivering a catering order and has had food trays knocked from his hands on more than one occasion. “It’s not the people that are self-medicating [that are] to blame, it’s a lack of care by the government to create and fund the services that support them.”

In mid-September, Daniel Verheyen closed cheese room Milk the Cow, which had outlets in St Kilda and Carlton. He points to issues bigger than any one suburb.

“We haven’t been able to recover since the COVID lockdowns, and the increased costs of doing business in this economic climate made things really tough,” he says. “Keeping costs down to make even a small margin seems impossible and with the cost of living crisis, customers haven’t been able to spend as much as they used to.”

St Kilda was trickier than Carlton. “Lygon Street is more of a hub, while foot traffic around St Kilda has changed with so many people working from home. Commuters used to stream off the trams every night and maybe pop in for a drink and a bite on the way home, but that doesn’t happen any more.”

Visitor patterns have changed in St Kilda, too, with the closure of two major hotels, Novotel and Adina. “There are fewer rooms for travellers to stay nearby so there’s not an influx of new people,” says Verheyen.

Hotel Tolarno still offers accommodation but the shine has gone off the property since its dining room closed. The premises, which once housed drawcard restaurants by hospitality veteran Guy Grossi and, before that, Iain Hewitson, did not reopen after the pandemic.

St Kilda is known for its rich tapestry as much as anything else. “It’s always been diverse, with that great mix of humanity,” says Paul Waterson. “It hasn’t been all roses in St Kilda for 40 years and that’s not going to change. But there are some great things happening there.”