Why can't I charge more during busy times?

We're all familiar with it. We all pay it, often without a second thought.

What am I talking about? Surge pricing. In other words, paying more during peak demand.

Now, I know this is a sensitive topic. Before cafes get accused of price gouging, let’s consider the following.

It's a common practice.

Here are just a few industries where prices rise with demand:

• Airlines

• Hotels

• Holiday homes (Airbnb, etc.)

• Public transport (even "public" transport is pricier during peak times)

• Rideshares (Uber, etc.)

There are many more examples. It's not that the cost of providing these services increases during peak times; it's simply that demand is higher.

Additionally, in cafes, the costs do rise during busy times. Both in terms of staffing requirements and equipment requirements. Plus quality and wait times suffer.

So why can’t you charge more during busy times?

It's not accepted in hospitality (yet)

This concept may be too far for cafes and restaurants in the consumer's mind. Imagine if your coffee was 20% more expensive during peak morning hours and cheaper when it's less busy. This could smooth the issue of uneven demand for coffee.

Yet, this idea doesn't sit well in the hospitality industry. Why? I'm not entirely sure. But this is seen unfavourably by many consumers.

In hospitality, it costs more to serve during busy periods due to staffing and other factors, unlike many other industries that do charge surge pricing. For instance, businesses have to put on two extra team members for half a day when they're only really needed for two hours.

I'd love to see more daring establishments implement a peak surcharge. But there's another option: reverse surge pricing.

Reverse surge pricing

This involves setting your regular prices a bit higher and offering discounts during slow periods. While the end result is the same, this approach seems more acceptable. This approach is about incentivising rather than penalising.

This is a great option to try for cafes that don’t want to rock the boat too much.

Conclusion

In conclusion, the lack of dynamic pricing in cafes makes little sense. It's time to experiment with these ideas because the cafes of today are shaped by the thoughts of yesterday. To improve the cafes of tomorrow, we must think differently today.