An investor’s social media post questioning the staggering price of a plain omelette at a luxury hotel has reignited discussions on the exorbitant cost of dining in high-end establishments. Sharing a bill, he wrote, “Any idea why Plain Omelette costs ₹800 + 18% GST in a star hotel? Cost of plain omelette should not be more than ₹25/-.🤔🤔 96.87% margins😮.”
The post quickly went viral, triggering a heated debate on whether fine dining prices are justified or exploitative. While some argued that customers are paying for the experience and ambiance, others pointed out the significant markups in premium hotels.
One user defended the pricing, stating, “₹25 omelette can be found in a place where you won't click pictures, won’t tell your friends about it, won’t post on FB, and the one who serves it at ₹25 won’t even have a staff of 100 people to look after you or a swimming pool after your meal. So... it’s not 96% margin.”
Another user linked the high cost to market demand, writing, “They cost what they cost because someone (or maybe a lot) are willing to pay. Price is a function of willingness to pay & not cost - Sales 101.”
Some saw the pricing as part of the appeal of luxury dining. “You are not paying for the omelette, sir. You are paying for the experience and buying your social status in return. Omelette is not the actual purchase, but social status is 😊,” a user commented.
Others pointed out the impact of taxation, explaining that hotel restaurants fall under the service category, making them subject to high GST rates. Under the current tax regime, five-star hotel services are taxed at the highest slab of 28%, significantly more than the previous combined service tax (6%) and state luxury taxes.
Luxury dining in India has long been scrutinised for its steep pricing, but with customers still willing to pay, the debate is unlikely to fade anytime soon.