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And as per normal they will fulfill their luxury need at the closest possible point yo their house so make sure the tavern is that and not a luxury market stall
Maybe that is the reason, I have houses at highest level next to my keep (most desirable) but I have a market next to them so they would have to pass that to get to the tavern... maybe they are just stopping there and never going to the tavern.... You would think the AI would use all resources available... hope they work on that mechanic before final release.... game could be so good once they polish stuff like that and housing wonkyness
For further troubleshooting please post a few screenshots of your village or join our discord server as it is much easier to share screenshots and save files and talk in real time there.