Hospitality doesn’t have a demand problem...

...it has a relevance problem!

One headline from The Guardian screams, “Not going anywhere, fuel supply fears and soaring pump prices put a brake on the great Australian Easter road trip”, while another from The Australian says “Easter tourism bookings strong despite fuel price surge fears.” So which is it? 

Honestly, both and that is exactly the point. People are not done spending, they are done wasting money on average experiences. Savvy operators will focus in on what their ideal customer is craving right now and clarify their messaging to hit that mark.

The headlines are clashing, but the customer message is crystal clear

Consumers have not stopped spending, they have started editing. They are not buying for the sake of it, every splurge must pass more than the 'pub test'! They are thinking harder about where they go, what they spend and whether the experience will actually feel worth it. That is not a shutdown in demand, it is a very real rise in standards.

Average is getting cut first

The venues feeling the pressure most are not necessarily the most expensive. They are often the most forgettable. In a tighter economy, bland is dangerous, because customers are weighing up every outing more carefully and cutting anything that feels generic, inconsistent or easy to replace. If your venue gives people no real reason to choose you, you will be one of the first things they drop and no amount of panic discounting is going to fix that.

Slashing prices might get a short term spike, but it does not build loyalty, it does not create desire and it definitely does not make a forgettable experience suddenly feel worth repeating. What customers are looking for right now is value, not cheapness and they are not the same thing. They want to feel confident that if they spend with you, the experience will deliver.

Selective customers are not the enemy

But I say great! Hospitality shouldn’t be terrified of a more discerning customer, they should welcome it. A selective customer rewards the businesses that actually make an effort, know their crowd and create an experience that meets their needs. I’m talking about experiences that are memorable and actually worth leaving the house for.

Relevance is the new survival strategy

This is the bit that matters. Relevance is not about being trendy for the sake of it. It is about being unmistakably worth choosing. It is knowing who you are for, what they value right now and how to make every touchpoint feel intentional, from the moment they find you online to the moment they leave thinking, yep, that was worth it.

This economy is not asking you to panic. It is asking you to get clear

Plenty of operators are still waiting for consumer confidence to magically bounce back. I wouldn’t hold my breath. The smarter move is to sharpen your offer, tighten your customer journey, know your ideal customer intimately and understand what they value and are craving right now. Open is not enough any more. Nice food is not enough. A comfy bed is not enough! You need clarity, personality and a customer experience that earns the spend.

The bigger truth no one wants to say out loud

A lot of businesses are blaming the economy for every soft week and while yes, the pressure is real, some of that is just BS! I have to say it, because customers are still spending, they are just not sharing the love evenly. The real issue is that customers are no longer handing over their money blindly, they are choosing what feels valuable and easy to say yes to.

That is why I continue to come back to the same point: hospitality does not have a demand problem as much as it has a relevance problem and this is not new!

This is actually very good news for the operators who are willing to get laser focused on their customer experience and stop settling for average.