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Mid tier hospitality is in the “invisible zone.” With the decline of the middle class itself, people are either saving to spend up for unique experiences or saving by spending down.
Those in the middle are left in the twilight zone.
Costs are rising for brands, prices are rising and people are left wondering: “Why am I paying more for the same?”
The sameness is differentiated in the luxury category.
Is hospitality dying? No. It’s thriving. But brands need to pick a lane.
#hospitality #brand #bar #bars #hotels
Transcript
In three years, half the bars, restaurants, and hotels you know won't exist. Let me explain why. It's not because of a downturn. It's because of the bifurcation. The top 10% of earners now drive over 50% of consumer spending. Luxury is booming. $200 dinners are packed, but mid tier brands are in the death zone. Since 2020, prices have risen upwards of 30%, but the experience has stayed the same or got worse. So consumers are left wondering, why am I paying $50 for this? The middle class is either trading down to save money or they're saving up to trade up once in a while for a great world class experience. There is simply no room left for mediocrity. Hospitality isn't dying. In fact, it's booming, but the middle is. Costs are soaring across the board. It is not economically feasible to run a mid tier brand. Brands need to pick a lane. Go lean, efficient, and low cost or unique, unforgettable, and premium because the middle is where brands go to die.