Rethinking hotel restaurants
01 DECEMBER 2014 8:20 AM
Guests expect high-quality F&B in a first-class, full-service hotel. A focus on continuous improvement will help hoteliers meet guests’ changing needs and increase bottom-line results.
Many hoteliers operate restaurants solely to meet the minimum needs of their guests, and in doing so, focus almost exclusively on mitigating costs. When considering one’s own hotel restaurant (or whether to have one in the first place), industry operators and owners also need to be aware of the trends in hotel-operated restaurants and where they might want to start on their journey in “rethinking” the concept overall.
What is the true cash flow of your restaurant operations?
What are the cold, hard facts? A comprehensive analysis needs to be completed to account for the incremental sales and costs generated through your restaurant. Often, profitable banquet and catering business will hide an underperforming restaurant. Establishing an accurate, separate profit-and-loss statement is critical to understanding the true impact to your bottom line.
Expenses need to be calculated and properly accounted for as there are direct costs that often get recorded on the financials in other departments. These expenses include, but are not limited to, the following: credit card transaction fees; bad debt; repairs and maintenance; utilities; management fees; marketing fees; franchise fees; licensing fees; insurance; government permit fees; real estate taxes; and property taxes.
Understanding the true impact of your restaurant operations on your cash flow can be an enlightening endeavor.
Are you able to lease your restaurant?
Does your restaurant space have qualities that independent restaurant owners or operators desire? Certain downtown sites with direct street access can create an attractive opportunity for restaurant entrepreneurs. The ability to deliver virtually guaranteed revenue from the hotel customers to a tenant can be attractive, representing base business with little, if any, acquisition costs. Their canny ability in creating a neighborhood destination can improve the guest experience and add to the hotel’s value.
What other needs do you have for your restaurant space?
Are you able to reduce the footprint of your restaurant to reallocate space for other uses? There are many examples of different space utilization changes. They could be as simple as closing space off and using it for storage to reduce off-site storage expenses to converting into flexible use space to grow your meetings’ business. Many hotels have their lobby and restaurant spaces overlap to further allow for better utilization of what was previously needed in the restaurant area, now fulfilled by lobby space. Hotels with separate bar and restaurant areas have combined efforts into the bar to make the restaurant available for meetings and banquets.
What are your covers per meal period in roomservice?
Are you delivering what your customers want through roomservice? Major brands have made headlines over the past year and half with their decisions to keep, alleviate or alter roomservice, and it is clear there is a tremendous rethinking being done on the topic.
In many cases, roomservice is being operated at a loss, making it another costly amenity for guests. Some hoteliers have eliminated “traditional” roomservice with rolling carts and china and replaced it with what many would define as “take out,” delivered in a bag with disposable cutlery. The less formal product allows guests to choose to eat in their rooms or to bring their meals with them. Markets offering “grab-and-go” products also can provide what some customers are seeking.
Guests expect high-quality food and beverage in a first-class, full-service hotel. A focus on continuous improvement will lead you to meet guests’ changing needs as well as increase bottom-line results.
Christopher Ostapovicz has more than seven years of experience in hotel asset management in a 25-plus-year career in hospitality. His current portfolio includes hotels in Boston, New York, and Washington, D.C. Chris is an active member of the Hotel Asset Management Association and an adjunct professor at Georgetown’s School of Continuing Studies.
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