Public Holiday Surcharges – for or against?

On Australia Day  I went to the Paynesville celebration in the morning, an early start from Lakes Entrance, (and before breakfast), but afterwards, and in desperate need of a caffeine fix, I and a small group of others, decided to go into town and enjoy a coffee and perhaps a little more.  Ok simple I thought, …..not so as it turned out.

Having found a parking spot, I looked around and found little was actually open, Oh come on it’s almost 10am.  No my eyes did not deceive me, closed, closed and closed. But this is a long weekend, visitors (and many locals) are around wanting refreshment, this is a prime tourism precinct, but there was little open, I was taken aback and so the rest of our group. If we really want tourism to thrive, services have to be open during the main season.

We did find somewhere, one of the few, to sit down and enjoy a coffee (and food), and so we did.  Then, after a while, came the look of surprise and annoyance from one of our group. “10% surcharge for a public holiday?”, “you are kidding” I replied, “No, 10 % because it’s a public holiday”.  I paid the bill, saying nothing, but on the drive home thought a little more.

Is a 10% surcharge on public holidays (or for that matter weekends) justifiable?  Is it just an overhead of running a hospitality/tourism related business which should be built in?   Does a 10% surcharge cover the extra costs?   Does it alienate customers for return visits?    Is it good for business?

We live in a society when shops are open 7 days a week, we seem to demand services that are always open.  We seem unable to organise our lives more than a day or two in advance. Consider supermarkets, if they close for just one day there is chaos the day before, why?  We used to shop a week at a time and needed only a few extras from the small local shop.

On the other hand and especially in the tourism and hospitality businesses, I understand there is a limited time frame or opportunity to make the “cream” of the business, the remainder of the year perhaps you only break even or worse. Surely such businesses have a financial plan to ensure your survival during that time. So many businesses fail because they fail to plan. BUT, if you can’t stand the heat in the kitchen, should you be there?

Why charge the very people who make that “cream” more for the privilege of enjoying your fare on a weekend and/or public holiday?  Perhaps it is the only day they have to make a visit to your establishment.

From the business aspect, are you likely to enjoy an increased level of custom on a public holiday and so be able to offset any increased costs?

Can a tourism/hospitality business afford to be closed in a prime location on a public holiday, in this case, on the last long weekend of the peak season and with greatly increased visitation?

If you are closed on this public holiday perhaps your customers will assume that you will be closed on all the others and not come at all. What will this do to your reputation?  Your loss, I would wager.

If you are in business, especially hospitality/tourism, should any extra costs be covered by a 10% surcharge on customers?  Let’s be real it is 40c on a $4 cup of coffee, $5 on a $50 dollar bill, is it worth it? Alternatively, can you offer something different, something special to attract more trade to your business and cover the cost increase, or do you just sit back and charge a surcharge or close altogether?

Should these costs be built in to overall operational/running costs of the business and in the financial business plan? Do you know your daily break-even point? Can you adjust operations to lower it?

I can see both sides and have had my own business, (17 years) and worked in the tourism sector, weekends and public holidays.  Let’s open a can of worms, and yes I would like your comments. (space provided below) There are some very switched on business operators around and those that survive for the long haul usually have this aspect well covered. Do they charge a surcharge, not from my investigations, (minimal though they have been). There are also some that are new to this aspect and are charging a surcharge, I wonder how long they will last.? Time will tell.

So let me know Surcharge or normal pricing. I am happy to publish the results in this blog by way of update.    “Can you have your cake and eat it?”

To Quote from https://www.accc.gov.au/media-release/misleading-menus-invite-infringement-notices        "Following legislative amendments in 2013, restaurants, cafes and bistros that charge a surcharge on certain days do not need to provide a separate menu or price list or have a separate price column with the surcharge factored in. However, the menu must include the words “a surcharge of [percentage] applies on [the specified day or days]” and these words must be displayed at least as prominently as the most prominent price on the menu. If the menu does not have prices listed, these words must be displayed in a way that is conspicuous and visible to a reader. These measures apply to pricing for both food and beverages."

LINK: Follow-up comments from John and your reaction