I recently wrote about the coffee market and how normal consumers are increasingly being priced out of what used to be the everyday middle of hospitality. Not the early adopters of premium experiences, and not those primarily looking for the cheapest option, but the broad middle that historically sustained much of the hospitality industry. That same pattern now appears to be playing out more widely across the sector.
What we are seeing is not just change, but a form of polarization. On one side, deep value: fast, efficient, functional hospitality where price is the main signal. On the other, highly curated experiences: restaurants and venues built around immersion, design, and novelty. Both ends are growing, while the traditional middle is thinning out, because it sits in a space that is becoming harder to justify in a market that is drifting toward extremes. Too expensive to compete with value-driven models, too ordinary to compete with experience-driven ones. And so, these businesses disappear, often without much attention.
But that framing almost makes it sound like something neutral is happening, as if these are just normal market developments. In reality, however, something more human is being lost. Not every meal is a statement, and not every outing needs to be an experience. A large part of hospitality has always been about something more ordinary: families going out for dinner, groups meeting without an occasion, people eating together in spaces that are comfortable rather than curated. The kind of places you do not have to think about too much, because they are always there when you need them. That repeat behavior keeps a sector alive between peaks, facilitated by the kind of places that quietly absorb everyday life.
Hospitality as a form of public service
In many towns and neighborhoods, these places also functioned as something closer to a public service than a business in the narrow sense of the word. They are third spaces — not home, not work — but somewhere in between where people gather. A kind of informal social infrastructure, especially in a time where those kinds of spaces are becoming less common.
This is especially true in smaller, family-run hospitality businesses, with owners who are still close to the floor, making decisions shaped by daily reality rather than distance or abstraction. That proximity is not just operational, but also emotional. These are often the places where hospitality is still experienced as a relationship, instead of a system. They provide a sense of familiarity. A place that knows you, even if only in the smallest way. One of the few remaining places that consistently produce that sense of everyday connection. In increasingly disconnected times, that matters more than many tend to admit.
Sadly, that family-run model is becoming harder to maintain, mainly for economic reasons: rising energy costs, increased rents in many urban areas, and food price inflation that leaves little room to absorb shocks without passing them on.
While hype-driven concepts can fill part of the gap, and value-driven models can fill another, neither fully replaces the middle. One is too temporary, the other too transactional, and neither is designed for the everyday patterns and fulfilment of emotional needs that used to define much of hospitality demand.
At some point, the question becomes whether an industry can remain balanced without it. Because an ecosystem made only of extremes – without a steady middle – might just collapse.
Marius Zürcher
About the author:
The co-owner & founder of Millennial & Gen Z marketing and employer branding agency 1520 in Apeldoorn, the Netherlands, Marius Zürcher was a participant at FCSI’s ‘Millennials’ focused roundtable at INTERGASTRA and a speaker at FCSI workshops about industry trends.
