Melbourne CBD Foot Traffic Lags Pre-Pandemic Levels Amid WFH Shift
Foot traffic in Melbourne's Central Business District (CBD) has not returned to pre-pandemic levels, with an analysis indicating a significant reduction from 2019 figures. Data from the City of Melbourne reveals that nearly 10,000 fewer people traverse some of the city's busiest areas daily.
Overall, foot traffic is at 80% of pre-pandemic levels across six inner-city locations.
Key Pedestrian Data Revealed
Specific pedestrian data points highlight the ongoing challenge:
- Overall: Foot traffic is at 80% of pre-pandemic levels across six inner-city locations.
- Southern Cross Station: Weekday foot traffic is 65% of pre-COVID levels. From 2018-19, foot traffic at Southern Cross Station has decreased by 35%. On an average weekday, approximately 17,700 people are recorded near its Collins Street entrance, down from around 4,100 between 8 am and 9 am six years ago.
- Flinders Street Station: Foot traffic is 77% of pre-COVID levels.
- Bourke Street: Foot traffic is just over 50% of its former level, with a rebound observed after the opening of a flagship store.
The Impact of Working From Home
KPMG urban economist Terry Rawnsley attributes this decline primarily to the increase in working from home. He notes that the reduction aligns with workers attending the office three days a week instead of five.
"The decline is primarily due to the increase in working from home, noting that the reduction aligns with workers attending the office three days a week instead of five."
This shift in attendance patterns has significantly impacted businesses. Cecconi’s Flinders Lane, an Italian restaurant, has largely eliminated its first Friday dinner service due to the absence of a post-work crowd. Operations manager Nicoletta Sylvester observes that Mondays record approximately 14,400 pedestrians, and Fridays 11,700, significantly lower than the average of 20,000 on Tuesdays, Wednesdays, and Thursdays.
Businesses Adapt to Changing Rhythms
Businesses are actively adapting to these new patterns. They are investing more in social media and marketing to attract diners who now seek a comprehensive dining experience and value for money.
Businesses are adapting by investing more in social media and marketing to attract diners who now seek a comprehensive dining experience and value for money.
Government Policy and Market Shifts
The Allan government plans to establish working from home as a legal right by 2026, which will further influence urban attendance patterns. This trend also means city venues face increased competition from suburban restaurants and cafes that emerged during the pandemic.
Melbourne Lord Mayor Nicholas Reece acknowledges a "new rhythm" in the city. He suggests that while foot traffic is lower, people in the city are spending more on dining and weekend retail, and advocates for increased office attendance.
The implications extend to the commercial real estate market. Commercial real estate data shows Melbourne's office vacancy rate is about 19%, up from 3% in 2019, making it the highest among Australian capital cities. Cameron Douglas-Perrine, a research manager at CBRE, indicates a direct correlation between foot traffic and office vacancy, noting that occupiers' leasing decisions are influenced by projected office attendance.