Hey waiter, why is my meal so...cheap?

On April 12th, the most recent Consumer Price Index (CPI) figures were released at 8:30 a.m. Eastern. ?The U.S. Department of Labor states, “The CPI measures the change in prices paid by consumers for goods and services.”?

The results showed an overall 8.5% increase in prices.?That figure was consistent with UBS’ expectations: "The investment bank’s economists, led by Alan Detmeister, predict the annual rate of inflation, as measured by the CPI, will move to 8.5% in March."?Anecdotally, I haven't spoken with anyone in the last few months who doesn't know we've been experiencing inflation.

When I dug deeper into the numbers, however, there was one thing I thought was particularly interesting: the numbers associated with airlines, lodging, car rentals, and full-service restaurants.

In addition to each of these industries being connected to what is traditionally considered the hospitality, travel, and tourism industry, they also all have another shared trait: they all have pricing power. Pricing power is the ability to change prices based on demand.

What I found fascinating, however, is that restaurants seem reluctant to take full advantage of this pricing power.?Below are the CPI numbers for each of the prior mentioned industries. Does one of them stand out?

?Other lodging away from home including hotels and motels: 29.0% increase

?Airline fares: 23.6% increase

?Car and truck rentals: 23.4% increase

?Full-service meals and snacks: 8.0% increase

I think most people are aware that both food prices have been rising and there continues to be a labor shortage.?I've been expecting to see this reflected in the prices I pay when I go out to eat, but to me the increases in prices haven’t really been that dramatic (the CPI numbers seem to back this up too).

I tried to imagine what I would do if I ran a restaurant, and I came up with three basic ideas:

1. Raise the prices substantially (20%) on just the highest food cost items.

2. Raise prices another 10-15% across the board but offer discounts during all off-peak times.

3. Raise prices on customers that dine-in and keep take-away food prices where they are (or vice-versa).

People will be spending their money over the next year in the hospitality, travel, and tourism sector.?Prices are up across most of the sector.?Just looking at the inflation numbers, it appears that consumers are willing (or at least able) to pay up to 30% more than last year.?The traditionally revenue management savvy industries of airlines, lodging, and rental cars are all taking advantage of this.?

I hate to say it, but I really think restaurants need to raise their prices.?It seems to be what the data is suggesting.?One request: just wait till after I go out for my birthday dinner (April 23rd).