Nicole Buisson, MD at POS service provider Lightspeed, breaks down the strategies hospitality businesses are using right now to deal with cost increases.
Hospitality isn’t short on challenges in 2025 – heightened costs, evolving customer expectations, and changes in consumer spending continue to test even the most experienced operators.
Hospo businesses are having to make some hard decisions to survive. According to Lightspeed’s Dining Dynamics and Hospitality Insights Report, 53 per cent have raised prices, 41 per cent have changed or renegotiated with suppliers, and another 41 per cent have adjusted their menus.
Unfortunately, these shifts can create friction with customers if they aren’t communicated clearly.
Two strategies are emerging as important for small hospitality businesses: flexible pricing and transparent communication.
Flexible pricing models: An alternate to raising prices
Flexible pricing allows venues to offer options that meet different needs, budgets, and occasions.
Take a neighbourhood café that offers smaller portions at lower prices. It’s ideal for lighter appetites, solo diners, or those looking to save – and it helps reduce waste.
A brunch spot might let guests add premium toppings like avocado or feta for a small fee. These upgrades feel custom, letting diners tailor their experience, and can help lift average spend per head.
At a wine bar, tiered tasting platters – small, classic, premium – can anchor value perceptions and drive upsells without pushy sales tactics. Similarly, happy hour deals or weekend surcharges reflect demand-based pricing in a way guests intuitively understand.
Almost half (41 per cent) of venues plan to offer tiered pricing or portion sizes in 2025, and 42 per cent plan to provide premium upgrades. When done well, these tactics can give guests more control over their experience, reduce decision fatigue, and encourage repeat visits — all while helping venues lift margins and manage costs.
Why clearly communicating pricing builds loyalty and reduces friction
A well-priced menu can invite curiosity; a well-explained one can build trust. In today’s climate, how you communicate pricing can be just as important as the pricing itself. Clarity removes friction, avoids awkward surprises, and shows respect for your guests.
Here’s how to make pricing communication work harder for you:
- Lead with clarity, not complexity. Avoid vague labels like “market price” or “seasonal surcharge.” Be upfront – for instance, “+$2 for locally sourced free-range eggs.” Customers can be more receptive when they see the value.
- Keep your pricing consistent everywhere. Whether it’s your physical menus, online listings, QR codes, or delivery platforms, mismatched pricing erodes trust. A quick check-in across channels can prevent confusion.
- Use visual cues and price hierarchy to guide choices. Just like bakeries display per item, sets, and platters to highlight value, menus can do the same. Clear formatting and a balance of price points help steer decisions without the hard sell.
- Train your team to explain the ‘why.’ Even the best signage won’t help if staff can’t confidently explain pricing. Empower your team to speak to the quality, sourcing, or portion sizes behind the numbers.
- Be transparent about surcharges and tips. Explain the purpose of surcharges and where tips go. Clarity here builds goodwill and can show your venue values fairness.
Pricing transparency isn’t just good hospitality, it’s a brand strength. It shows guests that your venue is thoughtful, consistent, and committed to the customer experience. When communication feels clear and considered, it builds trust – and trust keeps customers coming back.
