F&B is necessary for hotel companies not only to provide a positive guest experience but also to drive additional revenue.
Food-and-beverage offerings are being updated by hotel companies as they respond to consumers’ desire for healthy and convenient food service in a unique environment.
F&B is necessary for hotel companies not only to provide a positive guest experience but also to drive additional revenues. Research from Euromonitor International shows consumer food service through hotels accounts for only 5% of the global $2.5 trillion consumer food-service market, suggesting there is plenty of opportunity to boost F&B revenues.
Improving menu options
Hotels have been taking steps to modernize their F&B options in response to consumer demand for sustainable, locally sourced organic and healthier food offerings. According to the Out and About online survey conducted in 2012 by Euromonitor International, approximately 37.7% of Americans said one of their preferred features of a restaurant is the healthiness of the food and 13.3% said locally sourced/organic food was a preferred aspect.
In response to this desire for healthy living, Marriott International encouraged 780 full-service hotels to source nearly half of their seafood from certified sustainable fisheries and farms in 2011, while in April 2011 Hilton Worldwide began offering low-calorie and low-fat breakfast options. The most significant step, however, was taken by Hyatt Hotels Corporation, which announced last year its new global F&B philosophy: “Food. Thoughtfully Sourced. Carefully Served.” The F&B options in its hotels will focus on healthy foods that are locally sourced. Hyatt will aim to give back to the community by using local suppliers and advising those suppliers based on the company’s experience.
Encouraging on-site dining
In addition to updating menu items, hotels are renovating their restaurant spaces to maximize traffic and are serving food throughout the day to meet consumer expectations. According to the same Out and About online survey, nearly 65% of Americans dine out primarily for the experience compared with 31% who choose a dining venue primarily because of the food (the remainder selected food and experience as a combination).
Instead of multiple self-contained restaurants tucked away in back rooms or on upper floors, hotels are bringing food service into the heart of their establishments, integrating open-concept restaurants into lobbies and using pop-up breakfast buffets, coffee bars and rotating menus to offer an evolving range of benefits to hotel guests throughout the day. This is being supplemented by grab-and-go stations. Such spaces are being designed as combination living, dining and relaxing places, common areas that extend guest space beyond private rooms. As an added benefit, the set-up encourages more of a buzz in hotel lobbies, which gives guests a memorable experience and the ability to socialize.
Elizabeth Friend, consumer food-service analyst at Euromonitor International, points out that “such areas are also inherently flexible, maximizing value for the space and operational costs.” Starting in the mornings, hotels serve informal breakfast traffic, offering to-go coffee, snacks and freshly squeezed juices. During working hours, the area is transformed into a casual common living and working space, offering guests an environment similar to what they might find at a nearby specialist coffee shop. During the evening, the same space becomes a combination restaurant/lounge, serving appetizers and small plates alongside alcohol beverages, allowing guests to customize their dining experience and partake in anything from a light happy hour to a full meal.
Positive returns on investment
Hotel companies are reporting positive results from these renovations. Marriott is rolling out Courtyard’s Refreshing Business lobby concept, which should be completed by the end of 2013. During its 2012 fourth quarter earnings call, the company reported F&B profits increased by more than 50% after the renovation and that Courtyard by Marriott’s revenue-per-available-room index improved.
InterContinental Hotels Group is trying out a new lobby for Holiday Inn, called The Hub, which serves breakfast, lunch and dinner. According to its 2011 annual review, F&B revenues per occupied room were up 25% and 40%, respectively, for the few months of the trial when compared with 2010.
By modernizing their F&B options along with their dining spaces, hotel companies are meeting their guests’ expectations and achieving a positive return on their investment.
Michelle Grant is the travel and tourism research manager at Euromonitor International, specializing in hotels research. In her role, Michelle is responsible for Euromonitor’s hotel industry research, which provides analysis and in-depth coverage of the hotel market in 211 countries worldwide. She works closely with hotel companies, providing insight into consumer trends and market performance to help clients make informed, strategic business decisions. Michelle is a respected source in the travel and tourism industry. She has presented at a variety of high-level conferences, such as the World Travel Market, La Cumbre and the Special Libraries Association and is often quoted in journals, national newspapers and trade publications. Previously, she was a research analyst for Latin America, covering industries such as financial cards and domestic electrical appliances. Michelle has a Bachelor of Arts in Economics and Finance from Washington University in St. Louis.
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