Measuring F&B feats can fill owner, operator appetites
Measuring F&B feats can fill owner, operator appetites
17 SEPTEMBER 2018 7:43 AM

With the “reawakening” of food-and-beverage offerings, hoteliers look to metrics to help determine what works in the ever-changing landscape and according to consumer expectations.

MEMPHIS, Tennessee—Food and beverage, or beverage and food as it’s called by some companies, is the latest darling of hoteliers looking to drive revenue and appeal to an experience-driven consumer base, according to speakers at the recent Southern Lodging Summit in Memphis.

“It’s the biggest opportunity that currently exists in the lodging industry, said Anthony Langan, corporate director of beverage & food, boutique & lifestyle hotels for Chattanooga, Tennessee-based Vision Hospitality Group.

David Marvin, founder and president of Atlanta-based Legacy Ventures, described F&B in the hotel industry as being “reawakened,” on a panel titled “What’s driving the food & beverage explosion?”

Part of that reawakening is because more emphasis is being placed on tracking the success of the F&B discipline.

“It’s a little less tangible, but we really like to monitor how accretive the F&B is to the guest experience,” Marvin said. “We’ve learned the pitfalls of bringing in very promising F&B programs and operators that prove to be in conflict with the larger picture.”

Langan said metrics for measuring F&B success are invaluable as they’ve become more in-depth.

“For the first time, we’re able to compare ourselves and what we’re doing to something other than our own past performance but performance of other hotels, restaurants, bars within our portfolio,” he said. “So, it’s an accurate barometer of right now how are we doing against the people who could choose to eat or drink with us.”

Veronica Andrews, director of digital data solutions for STR (the parent company of Hotel News Now), said F&B metrics are leveling the playing field similar to the way data has made revenue management more mainstream.

Andrews presented year-over-year (through June) U.S. data points from the company’s F&B database, including:

  • catering and banquet revenue per available seat grew 2.9% to 81 cents;
  • F&B venue RevPAS grew 4.9% to $47;
  • in-room dining revenue per occupied room dropped 2.2% to $4.37; and
  • total F&B revenue per occupied room climbed 2.6% to $108.

However, the impact of F&B isn’t always confined to revenue-generating outlets.

Adrian Kurre, global head of Homewood Suites and Home2 Suites by Hilton, said F&B is an important component to guest satisfaction at the extended-stay brands.

“We give food away for free (during complimentary breakfast and evening reception offerings), so we’re looking at the extended-stay brands and the Embassy breakfast (and ask) ‘how does that contribute to the overall satisfaction of the guest that’s coming into the hotel,’” Kurre said. “We have guest metrics that will tell us that we’re doing a good job of delivering hospitality in that area. When you’re going to deliver a free amenity to the guest, you have to make sure that you (have) activated that in that space. … what is the overall experience, how well are we doing on driving the overall customer satisfaction?”

STR’s Veronica Andrews listens to Hilton’s Adrian Kurre talk about the importance of technology and guest preferences during a panel focused on food and beverage at the Southern Lodging Summit at Memphis. (Photo: Don Reber)

Understanding the landscape
Knowing how F&B fits into the overall operations of a hotel is an important step in measuring success, according to the panelists. It’s also key to understand the overall goals and mission.

Langan said hoteliers should understand they are indeed bar and restaurant owners when they have outlets, but they can’t forget about their core demographics—which often are from the local community in addition to hotel guests.

“It starts from the beginning,” he said. “You’re building a completely separate identity. … It’s a difficult thing for F&B and everything from our collateral of separate entrances and defined logos and brand outlines.”

Marvin said it’s important to look at what’s missing in the local community when determining the type of F&B outlet to have at a hotel, including if it’s an outsourced or leased situation.

“It can be an opportunity to get something that they can uniquely find at your hotel,” Marvin said. “For example, we have a mixed-use project actually anchored by a Hilton Garden Inn. … It has the only Legal Seafoods restaurant in the southeast. And Atlanta, where it’s located, has a very significant Boston kind of a following, and we know there’s a number of people that are going to crave the clam chowder. It’s so unique that it becomes a destination. That drives rooms and business to the hotel as well.”

Kurre said the opposite can be true for select-service all-suite hotels.

“Never in the history of mankind has a husband and wife sat on their couch in their living room on a Saturday night and uttered the words, ‘let’s go to that Homewood and have cocktails,’” Kurre said. “Unless you are an urban location, it’s not going to happen.”

That doesn’t stop some select-service hotel developers from trying to include full-service restaurants or mainstream bars into their projects—and that requires some tough love, according to Kurre. He said he has to tell them they won’t make money on such a project so they need to focus on taking care of guests in the hotel via evening receptions and quality breakfast offerings.

“Be hospitable to them, get them a glass of wine and an appetizer and make them feel good,” Kurre said. “Don’t expect a bar in this segment that I’m in to be wildly successful.”

But there are exceptions to that philosophy, Marvin said.

“You have to exercise the discipline of understanding the market,” he said. “We’re developing a Hyatt House in a district, and we will be the only hotel within walking distance of multiple hot spots. And by extension, we think this Hyatt House ought to have a juiced-up bar because we’re going to be the only watering hole within walking distance.”

Andrews said brand standards play a major role in such arrangements.

“I’ve seen evidence on the F&B reporting where there have been indications to step away and say ‘let’s do something a little different,’” Andrews said. “That might be driven by the owner or the management group, but it’s a collaboration and speaks very well for F&B when you think about collaboration.”

Final thoughts
The panelists gave final takeaways to close the session:

  • Kurre: “It is just as much about the relationship that’s created and the experience for the hotel—it’s as much, if not more, about the relationship that’s created by the people who are working that area. If 80% of guests are coming down to have breakfast, where should your GM be in the morning? They should be activating that breakfast. If you’re doing an evening reception at a Homewood or a Residence Inn and your guests are down there, where should your leadership team be?”
  • Andrews: “Food and beverage is the second-highest revenue-generating department in your hotels and growing in its profit contribution, so you should really be watching the metrics.”
  • Marvin: “If you’re in a full-service hotel, then you really have to gauge and measure concept, the community, what’s missing, what’s needed and then respond to that.”
  • Langan: “If you’re going to do F&B in a hotel setting, be bold. Be passionate about it. Take risks, and do something terrific.”

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