Royals British Royal Family British Royal Family News Meghan Markle and Prince Harry Step Out for Dinner at Montecito Hot Spot Ahead of the Duchess' Birthday The Duke and Duchess of Sussex are "playful and flirty" together, a source tells PEOPLE By Stephanie Petit Stephanie Petit Stephanie Petit is a Royals Editor, Writer and Reporter at PEOPLE. People Editorial Guidelines Updated on August 4, 2023 10:51AM EDT Meghan Markle and Prince Harry are hitting the town. The Duke and Duchess of Sussex were spotted leaving Tre Lune in Montecito, California on Wednesday night, in photos obtained by The Daily Mail. They were accompanied by their friend Matt Cohen. The Italian restaurant is a celebrity hotspot, attracting famous faces such as Kevin Costner, Kenny Loggins and Kourtney Kardashian and Travis Barker (who may have crossed paths with Meghan and Harry during the night out — the drummer posted a photo on his Instagram story from inside the restaurant on Wednesday). "From what I gathered, they enjoyed their food and had a nice time," a source tells PEOPLE. The outing may have served as an early birthday outing for Meghan, who turns 42 on Friday. Meghan has traditionally celebrated her birthday privately with family. Shutterstock Meghan Markle and Prince Harry's Obstacles to Success in Hollywood: 'House with No Foundation' (Exclusive) The couple moved from the U.K. to California in 2020 after stepping back from their royal roles, and a family insider tells PEOPLE exclusively in this week's cover story that for Prince Harry, it's a "very different" life but one he "seems to be embracing." Prince Harry is regularly is seen by locals riding his bike (one local said he "laughed it off" when she came close to him in her car) or spending time at the beach — often accompanied by Pula, one of the couple's three dogs. A resident tells PEOPLE that during a beach visit, "The cutest dog dropped his ball by me, and I looked up to ask the owner if I could throw it, and it was Prince Harry. He said, 'Of course,' and made small talk while I played and pet the dog. It was so cute." The resident added that the Duke of Sussex "didn’t wear a hat; I could see his red hair.” Less often out and about than Harry, Meghan stops by local markets and picks up son Prince Archie at school, where "she talks to everyone," says a longtime Montecito resident. But when the couple leaves the house together, "they have a lot of security," according to a source. Some locals wish the couple would more fully engage with the community in Montecito, where Oprah, Ellen DeGeneres, Katy Perry and Jeff Bridges call home. “Quite a lot of people are very protective of them," says Montecito Journal columnist and local resident Richard Mineards, while others are "grumbling" about a noticeable uptick in paparazzi. Meghan Markle and Prince Harry in June 2022. Kirsty O'Connor/AP/Shutterstock Most of the time, Prince Harry and Meghan keep to themselves. They work out of a shared office inside their sprawling $14.65 million estate in Montecito, which boasts chicken coops, a playground for Prince Archie and Princess Lilibet and a vegetable garden. A friend tells PEOPLE, "They’re not into a big scene. They prefer smaller group hangouts at home, karaoke, that sort of thing." A local store owner adds that Harry and Meghan "don’t go out much" but probably "have friends out of the public eye," adding that Montecito is "a quiet and small town." The couple regularly gets pizza takeout from nearby Bettina (a favorite spot of celebrities like Ellen DeGeneres and Catherine Reitman), and the friend adds that Prince Harry is a "beer and steak-and-potatoes kind of dude." Together, the couple are "playful and flirty," the friend adds. Can't get enough of PEOPLE's Royals coverage? Sign up for our free Royals newsletter to get the latest updates on Kate Middleton, Meghan Markle and more! A family insider tells PEOPLE that Prince Harry and Meghan have found a "dynamic that works for them." "Meghan does seem to run the household and make the decisions, but it's not that he bends for her. It’s just a dynamic that works for them, and maybe one that he needs after everything he’s been through," the insider says. Meghan Markle Has Taken a 'Much Softer Approach' to Prince Harry's Family: She 'Wants to Focus on Their Kids' However, there have been "serious growing pains" when it comes to their break into Hollywood. Despite coming off a record-breaking Netflix series, a hit podcast and a bestselling book, there have been recent setbacks. In June, the Duke and Duchess of Sussex "mutually agreed to part ways" with Spotify after delivering one podcast, Archetypes, under their reported $20 million deal, with executive Bill Simmons publicly criticizing the couple shortly after the announcement. Later that month, the Wall Street Journal took a critical look at their production company's Netflix output. (That deal is reportedly worth $100 million.) In July, the entertainment industry itself was rocked by a historic writers and actors strike. As for what’s next, the couple remain focused on their Archewell foundation, which has dedicated resources to youth mental health, online safety and the intersection of social justice and technology. Meghan recently signed with powerhouse agency William Morris Endeavor, while Harry’s Netflix series Heart of Invictus, about his competition for veterans and military service personnel, is coming soon, along with this year’s Invictus Games in September. "Has their final chapter been written? Absolutely not," an industry executive tells PEOPLE. "Hollywood loves a comeback."