Hotels could profit from handing off F&B operations
Hotels could profit from handing off F&B operations
15 OCTOBER 2019 7:52 AM

As guests become more knowledgeable about F&B, hoteliers are moving to specialist providers, management agreements and new concepts such as food halls and ultra-regional menus.

MANCHESTER, England—The evolution of dining throughout the United Kingdom has become so sophisticated, it is time hoteliers handed their offerings to fully-focused F&B operators, said panelists at the Annual Hotel Conference.

Several factors are driving increasing complexity in F&B, including a drive for more profitability, the rise of vegetarian and vegan diets, and increasing adoption of tech-driven delivery companies. All of this add up to a greater need for specialist providers who understand work works, they said.

Speaking at a panel titled “Live to eat or eat to live,” Thibault Bouquet de Jolinière, co-founder and development director at F&B consultancy and project-management firm Initiative Group, said “if a hotel wants to have the right rate and right positioning, it needs to partner with the right F&B operator. … To create a different and right type of offer, which will see people starting to come back to the hotel.”

“When hoteliers try and create restaurants, it does not always work,” he said. “Everyone is trying very hard to do someone else’s job.”

And doing nothing is not an option, Nicholas Northam, EVP international, Interstate Hotels & Resorts said.

“Today, if you stand still, you will get run over,” he said.

Jon Yantin, director of business advisory Stake Concepts, said guests’ tastes and needs change much faster than hotels.

“There is huge change on the High Street, and that is putting more pressure on hotel developers,” he said, noting guests are looking for differentiation in F&B.

He also noted the quick changing F&B trends also represent an opportunity for hoteliers.
“You can look outside and see hipsters queuing for hours for curried goat in a taco, and then (for hoteliers) it is a real-estate play,” he said, referring to considerations over space in hotels dedicated to F&B.

The other two panelists see solutions in niche provision and technological solutions, respectively.

James Brown, retail director at Scottish brewery BrewDog, which has hotels connected to breweries in Ellon near Aberdeen and Columbus, Ohio, said his company has made the “beverage” part of “food and beverage” the defining characteristic of their properties.

“We have 50 rooms in Ohio, beer in the showers, a beer tap in every room and windows that open into our in-hotel beer facility,” Brown said, adding that Instagrammable moments still have their place in F&B thinking.

Alex Lewis, corporate business development manager at delivery company Deliveroo for Business, said the increasing diversity of dining in the U.K. can be a strength is properly leveraged.

“The U.K. is one of the championing countries when it comes to F&B, but we are now seeing dietary changes, vegetarianism and veganism, and we have to take account of all of that,” Lewis said, who added his battle is to hotels be welcoming to Deliveroo, that now not always being the case.

He noted embracing delivery companies can be a big opportunity for hotels, given the high cost services they replace.

“It is not profitable to have chefs at night, who probably are not your best chefs, and it is expensive for (hotel) staff to deliver food to rooms,” he added.

Those services will have a struggle to have a consistent product, panelists said, adding that there are calls for service-level agreements, because while some hotels are happy for deliveries to go straight to rooms, others require staff to complete the final step.

Lewis said that process is an on-going discussion, hotel by hotel, “but it is not the same as if you owned the whole supply chain.”

Developing menus
Yantin said F&B is likely to be more successful if plans are put in place right from the start of any project.

“Restaurateurs are craving low-CapEx expansion in the grey skin of a hotel development,” Yantin said.

He added it was increasingly the trend that F&B operators are happy to put some skin in the game themselves.

“Rooms in the majority of cases is where the revenue will be made, so if the GM is not spending energy on F&B, that’s always a good thing, especially when (F&B) is becoming more segmented and specialized,” Northam said.

Bouquet de Jolinière said the right F&B lends coolness to a hotel, but that’s something a GM and hotel staff will have a hard time identifying on their own.

He added it would be wonderful to have a data point or metric that showed F&B return on investment’s contribution to average daily rate.

“That’s a long way off,” Bouquet de Jolinière said.

New concepts are taking hold, panelists said.

The rise of dedicated F&B areas containing seating and any number of small dining and drinking options is one of those

“The evolution of the food-hall market is extraordinary. Operators who perhaps do only three things, but very well. I think that idea is coming to hotels,” Bouquet de Jolinière said.

He added that while vendors will change quite often as they grow in popularity, that is a bonus as new entrants continually revitalize F&B spaces.

Yantin said he’d already seen that idea at London’s The Ned.

“It is happening, but it is the same operator. It is very well-thought through and well-curated. I, too, think this type of provision will be a game-changer,” he said.

Lewis said in Australia, the Holiday Inn brand has taken out its restaurants and started partnering with Deliveroo.

“I think there is an opportunity in mid-range hotels as they have traditionally shied away, because all their fees earned are on rooms,” Northam said.

The Village Hotels were one of the winners in the space, although they had the advantage of having a leisure/members’ club-style of business model, he said.

Celebrity passé
Panelists said they thought the days in which it was sufficient to have a chef’s name above the door but said chef rarely coming to the hotel are over.

“People want to see the chef in the kitchen,” Bouquet de Jolinière said.

Northam said his company has experience working in that space.

“We have a number of hotels with celebrity chefs, and that is challenging, as it needs the chef to be very engaged,” Northam said.

Bouquet de Jolinière said many restaurants have been more successful keying in on regional cuisine.

“People know food and are spending less but more often. Again, operational specialism is required, certainly when hotels are having a struggle to fill rooms and cannot spend the same energy on filling restaurants, which will always be second fiddle,” he said.

Interstate’s Northam said hoteliers should focus on what’s successful regardless of everything else.

“Do not let you ego and heart rule your brain. After all, you have to make money at the end of the day,” he said.

“The winners will be those who are passionate about what they do and provide,” BrewDog’s Brown said.

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