The hospitality industry has long faced a unique challenge: it’s expected to offer memorable experiences, delicious food, and great service, often at a bargain price. But why? Dining out or going for a pint should be treated as a luxury, and yet, the pressure on pubs, restaurants, and bars to keep prices low often leaves these businesses undercutting their own profitability. When do we stop expecting hospitality to just keep “sucking it up”?
One recent tactic aimed at easing the pressure is dynamic pricing, adjusting prices based on demand. While it might help balance the books during peak times, it’s also met with caution. Understandably, customers could perceive it as “price gouging” if not done transparently, potentially alienating the very clientele we aim to attract.
However, it’s not just about prices going up during peak times; they can also go down when demand is low. This flexibility can be a game-changer for hospitality, especially when businesses need to attract more customers during off-peak hours.
For example, think about student nights or early-week specials—by lowering prices during quieter times, venues can fill more seats, keeping staff busy and boosting overall sales. Dynamic pricing allows for these adjustments in a way that’s both responsive to customer behaviour and beneficial for business. During quieter periods, businesses can offer deals that appeal to people with flexible schedules, like students, or even those just looking to enjoy a night out at a reduced price. This not only helps sustain revenue but also builds customer loyalty by offering value when it’s needed most.
However, implementing dynamic pricing requires careful communication. Customers need to understand why prices fluctuate; otherwise, there’s a risk they’ll feel taken advantage of. But with the right approach, dynamic pricing can create a balanced approach to affordability—offering bargains when business is slow and helping cover higher costs during peak times, ultimately supporting a more sustainable hospitality model.
In many sectors, people are compensated extra for working “unsociable” hours, like evenings or late nights. But in hospitality, a daytime shift is often paid the same as a night shift. Isn’t it potentially time to incentivise evening work by offering higher pay for the inconvenience? At a time when flexible working is a hot topic, why can’t we look at evening pay premiums in hospitality too?
Other industries compensate for unsociable hours, so why can’t we? Yes, it would raise payroll costs, but if we’re truly committed to building a sustainable industry, this seems like a necessary step. It raises the question: where does that extra money come from? Implementing this change fairly might require reevaluating pricing altogether, considering dynamic pricing, and educating customers on the true cost of their dining experiences.
This conversation isn’t just about profitability—it’s about respect for the people who make hospitality happen. Profitability and fair wages shouldn’t be at odds, but aligning them might take rethinking the expectations around what it means to eat out.