Why Hospitality Needs a New Playbook

For decades, the restaurant business has been built on the same formula: find a space, fill it with tables, and hope that enough guests cycle through each night to make the numbers work. The problem? The math is broken.

Industry studies show that traditional restaurants operate on razor-thin margins (often 3–5% at best) and more than half fail within their first three years. Rent, labor, food costs, and customer expectations have all risen faster than menu prices can keep up. Add the unpredictability of consumer habits and staffing shortages, and even the best-run restaurants struggle to deliver consistent returns.

But hospitality doesn’t have to be broken. It just needs a new playbook.

At The 601 Group, we’re building businesses designed around experiences rather than meals. Our Local Epicurean locations, for example, are not restaurants. They’re immersive spaces where guests learn to handcraft pasta, gather with colleagues for team bonding, sip curated wines, and leave with a memory they’ll talk about long after the night ends.

The difference isn’t just semantic, it’s structural. When you sell an experience, you control the schedule, the ticket price, and the capacity. You don’t live or die by walk-in traffic or how quickly a table turns. You can design events around efficiency while still delivering something personal, purposeful, and profitable.

This isn’t just our opinion, it’s a shift happening across the broader “experience economy.” Studies show that spending on experiences has grown nearly four times faster than spending on goods over the past decade, with categories like experiential dining, cooking classes, and interactive leisure all outpacing traditional restaurants. Think of how Top Golf reimagined the driving range, or how escape rooms turned puzzles into social outings. People want more than a product; they want a story to be part of. Food is no different.

We see this every week. Recently, a large corporate team came in for a private class. By the end of the evening, flour was flying, laughter was echoing and colleagues who barely knew each other were sitting side by side, sharing wine and tasting the dishes they created together. That moment of connection—something a standard dinner reservation would never deliver—is why companies book again and again.

The future of hospitality isn’t about chasing covers. It’s about curating connection. That’s the playbook we’re writing at The 601 Group. And as we expand into new markets, our focus is simple: build places where people don’t just eat, but belong.

-Gina and Mike