The Hospitality Industry and Hotel Restaurants | Opportunity is Heating Up in 2020
Written by David Hopkins
The number of genuinely underwhelming food and beverage, F&B, concepts in hotels across North America continues to surprise me.
While visiting Cincinnati, Ohio, last week, my family and I decided that we would dine at the restaurant, located within our hotel. We had researched the hotel online and found that it was exactly up to our expectations upon arrival; the guest relations team was professional and welcoming, and our room was beautiful. Assuming that these standards would extend from the hotel to their on-site restaurant, I was initially enthusiastic to try the menu, and enjoy the convenience of dining within the hotel after a long trip. However, shortly after we were seated, I quickly saw past the initial optics and discovered some serious hospitality missteps.
As the President of one of North America's leading hospitality agencies, The Fifteen Group, my team and I are well-trained on what it takes to operate a successful restaurant. After working with almost 1,000 clients over the past 19 years, I have a trained eye when it comes to identifying improvements in operations and guest experience. As I sat in this tired restaurant, in the heart of the Midwest, I noticed that there was no brand identity or unique value proposition, no ambience, and the menu left my palate unsatiated. In contrast, the evening prior, I was in Nashville, Tennessee, and I had the most impressive hotel F&B experience one could hope for. Every element in the restaurant worked in unison with the unique brand identity of the hotel, from the branding to staff messaging and service, to the menu...and, as a result, the place was packed!
Just like me, I'm sure you've frequented a hotel restaurant on many occasions and experienced the good, the bad, and the ugly. Hotel F&B concepts present a tremendous opportunity. In 2018, there were 1.4 billion international tourist arrivals, a figure that the United Nations World Tourism Organization didn't forecast global tourism to hit until 2020. As tourism and global consumer standards continue to increase, visitors demand quality accommodation and F&B.
Where does the disconnect between opportunity and current offerings, in many hotel F&B operations, stem from? Hotels invest a tremendous amount of money to curate key guest moments in an attempt to increase revenue streams from food and beverage offerings. Investors will often lead the construction of a trendy lounge with an Instagram-worthy bar, the design of a hip seasonal patio, or build a 150-seat restaurant in an attempt to open the wallets of guests and locals. However, many are missing out on this potential goldmine due to a lack of strategic planning.
Once hoteliers begin paying for the operational expenses of an F&B space, as a subset of their overall hospitality business, they are often surprised by the impact that costs have on profitability. Approximately 50-60% of all incremental revenue must be immediately deducted from profit after all F&B costs are taken into account. Much higher than than in the hotel industry.
A successful F&B concept forecasted to earn between three and six million dollars in revenue, is strategically planned at every step of conception. The last three decades in this industry has taught me a great deal regarding success factors of restaurants, specific to those within hotels. I have outlined a few of my most impactful tips below:
Understand the values of your hotel guests and complementary consumers
For example, according to the Bookings.com sustainability travel report, “Over half (55%) of global travellers report that they are more determined to make sustainable travel choices than they were a year ago.” If your hotel guests value sustainability in their hotel rooms, they are going to value it within an F&B concept. To capitalize on your overall brand efforts, make sure they are amplified on all branding tools: elevator wraps, menus, in-room print collateral, social media, and advertising.
“Over half (55%) of global travellers report that they are more determined to make sustainable travel choices than they were a year ago.”
- Bookings.com
Try to introduce local culinary favourites to guests, while acquainting them with local food habits
Embracing the local culinary scene, and doing it better than competitors, is extremely important in drawing in your hotel guests and winning over locals. Work with your Chef to curate a menu that will offer diners exposure to the local culture, terroir, and culinary practices. Ensure that you are offering guests authentically local flavours on an a la carte menu, but also breakfast service, to encourage trial and menu exploration at all service times. These efforts will ultimately drive increased profits.
Ensure that your F&B space complements the overall design of your hotel, with unique restaurant-specific branding elements
Hoteliers must select the correct location within the property grounds to build or re-establish a restaurant. Your space should be inviting and offer completely independent experience from a hotel stay. Work with your designers to construct a hotel restaurant that is unique to the other interior design elements of the property, as a whole. This strategy allows guests a completely new place to discover that will feel fresh and provide a unique value proposition, independent of accommodation. For example, if you have a lake resort, ensure that the restaurant site is as far removed from the main building as possible, to give guests a completely new F&B experience opportunity. An independent brand identity is always necessary.
Lastly, avoid serving breakfast in the same location where you serve lunch and dinner
One of the most forgotten about factors when creating a hotel F&B concept is place identity and how it impacts your overall guest experience. Breakfast offerings are often included in hotel reservations, in the Americas and Europe. A designated breakfast room is where most of your hard-earned guests will start their day; this space must not feel cluttered and have an abundance of natural light. However, most guests do not want to consume dinner or lunch in the same space that they had breakfast; they prefer a unique and more elevated experience. Construct your main restaurant, for lunch and dinner, with a unique brand and menu identity and the guests will come.
There are tremendous profit-generating hotel F&B opportunities in the current marketplace. However, these concepts need to be strategically executed with complete operation precision to ensure lasting success. There is nothing that I enjoy more than seeing a passionate hospitality entrepreneur or stakeholder win at business, and I hope to help as many as possible in 2020!