Hospitality: Can we turn disappointment into joy by making one simple change?

Almost every conversation that I have had recently seems to end up on the subject of how expensive everything is. And this is not just in the world of work where, particularly in hospitality, everyone seems to be in an omnipresent battle to retain margins without increasing prices to fend off the relentless march of inflation on their costs. The reality is, most are having to make some price increases, but slower than the rate of their cost increase so as not to scare off their customers.

On the customer side, hospitality has become such a big part of our culture that we will find money for these hospitality experiences if we can, albeit less than we’d like, and definitely less than the hospitality industry needs us to.

So when we do, it should be a joyful experience from beginning to end. And I think there is a problem at the end. Specifically, when you get the bill. And specifically, the fact that it is quite often surprisingly big, or at least more than you were expecting it to be.

That doesn’t mean you think it’s not fair, it's just that most people’s expectations of what things cost have simply not kept up with inflation.

Our heads are still stuck in a time when we could afford to eat out more often than we can now. So, now, when we have a couple of glasses of wine and a snack in a nice pub, we get a bill that feels like it should have got us a full meal in a nice restaurant.. because it used to. Which is a shame.

I know this all seems obvious, but the thing that struck me the other day is that this means that more often than not, joyous hospitality visits are ending in a sense of disappointment as we feel this price shock. And sadly, this is the thing that they remember from the experience. And that is a massive problem, not least because this forms part of the word-of-mouth narrative that so many restaurants rely on. E.g. ‘it was nice, but very pricey” does not make us want to go and check that restaurant.

I don’t think it’s that customers feel ripped off, it's just a sobering way to end an otherwise wonderful experience. And that seems like it could be an opportunity. What if we could change it up and reduce that end of meal bill. Or even, move it entirely so you pay in advance at the point of booking?

In almost all other transactions, you pay your money, and then you get the ‘thing’. And the memorable moment is getting the ‘thing’. In hospitality, you get the ‘thing’, and then when it’s all gone, you pay. It just isn’t as rewarding.

The other issue that hospitality is fighting against is last-minute cancelations this is particularly pronounced for smaller venues (an example would be the brilliant 12 seater The Set in Brighton).

The obvious solution to this problem is to ask for a deposit, so it wouldn’t be a stretch if we asked for a larger amount, say the average value of the food per person.

Oreven better, why don’t we make the deposit larger so it would cover a full on blow out or somewhere in between.  Then, if you don’t spend that much, you could get a refund for the difference.  Imagine ending a meal with the restaurant giving YOU money. That totally reframes the experience.

As an aside, I guess it may even drive up average spend as customers aim to reach the newly framed ‘target’.

There is of course an obvious argument that that asking customers to pay up front may be a barrier to booking. And it might be. I would make two points in response.

1. If those customers do not want to spend the money in advance, then they probably won’t want to spend it at the end of the meal either. You could say this doesn’t matter, as you’ve already got the business. But do you really want your customers to leave pissed off? Maybe they were not your people in the first place.

2. The same thing was said after COVID when more restaurants started taking payment card details with bookings and charging for late cancellations. Now it’s standard practice and less people cancel late.

I appreciate that this won’t work for everyone and it may not even be a new idea (some high-end tasting restaurants have been doing this for years). But I’d love to see more places experimenting with it and seeing if customers come away remembering the experience more than the cost.

We obsess over first impressions. We invest in branding, interiors, menus, music, lighting and service because we know experiences are remembered emotionally, not rationally.

Yet for many guests, the final emotion is still the sting of paying the bill.

Perhaps it's time we applied the same creativity to the end of the experience as we do to everything else.