Surge Pricing vs. Seasonal Pricing in Hospitality: The Truth Behind Restaurant Prices

There’s a common misconception that restaurants and bars use surge pricing, much like Uber or airlines, to charge more when demand is high. But that’s not how hospitality pricing works.

Yes, prices in restaurants and bars often rise during peak seasons, but this isn’t a case of businesses cashing in on demand—it’s about survival.

What Is Surge Pricing?

Surge pricing is when a business dynamically increases prices based on demand in real-time. Think about Uber—if it’s raining and everyone is trying to book a ride at once, fares shoot up. The same happens with airline tickets and hotel rooms—the more demand, the higher the price.

But restaurants don’t work like that.

In hospitality, we don’t suddenly double our prices because it’s a sunny weekend. What actually happens is seasonal pricing, which is a completely different concept.

The Reality of Seasonal Pricing in Hospitality

Many hospitality venues lower their prices in quieter months to attract customers. They run special deals, discounts, and promotions—because if they don’t, they’ll struggle to fill seats.

Then, when peak season arrives—whether it’s summer, Christmas, or a busy weekend—prices return to their normal level. They’re not being inflated; they’re simply going back to where they need to be for the business to remain viable.

A good example is seaside towns. A hotel room that costs £60 in January might be £120 in August. That’s not surge pricing—it’s just the actual, sustainable rate that keeps the business running year-round.

Why Restaurants Can’t Just Keep Prices Low All Year

Restaurants operate on extremely tight margins. Here’s what that means:

• Food costs have risen significantly in recent years.

• Staff wages are constant all year round, no matter how busy or quiet trade is.

• Bills like rent, electricity, and insurance don’t go down in winter—even if customer numbers do.

So when venues drop prices in quieter months, they aren’t making extra money when prices go back up—they’re just balancing out the losses from slow periods.

Why You’re Seeing More Venues Taking Card Details for Bookings

If you’ve noticed more restaurants asking for card details when booking a table, this is part of the same problem.

After COVID, when venues reopened, a lot of people started booking multiple restaurants for the same night so they had options. They’d then choose one last minute and not cancel the others, leaving restaurants with empty tables they thought would be full.

The number of no-shows skyrocketed, and many businesses lost huge amounts of money. So, to protect themselves, restaurants started taking card details and charging a fee for last-minute cancellations.

It’s not about ‘penalising’ customers—it’s about making sure that a booked table actually gets used.

The Bottom Line

The next time you see a restaurant’s prices rise in peak season, remember—it’s not surge pricing, and it’s not about profiteering. It’s just businesses charging what they need to charge to stay open.

If restaurants never adjusted their pricing to account for seasonal trade, many wouldn’t survive the quieter months.

So instead of thinking, “They’re just charging more because they can,” consider this: they’re charging what they have to.

Like what you’ve read?

Head to trevorhill.kit.com/mailinglist and grab my free ebook: The Four Pillars – A Sanity Manual for Hospitality Owners. It’s a short, honest guide to the four areas that helped me rebuild after burnout, with practical advice and real-world tools to help you take back control.