In-room dining is considered a valuable amenity to guests, and offering this service also is required to participate in luxury consortia as well as to achieve prestigious star ratings.

With the increasing cost of labor and goods in today’s environment, many urban luxury hotels have seen margin declines and exacerbated losses in the room service department.

Here are some tips to help drive profitability in room service without sacrificing luxury standards:

Conduct quarterly price shops to see how you are positioned versus your competition. Areas to focus on in addition to the actual food-and-beverage prices include increasing administrative and delivery fees, which help mitigate the incremental labor costs that are felt across the industry.

Review your product-mix reports — report outlining sales by menu item — as well as the retail price versus all-in cost by item to see which items are your “stars.” Explore cutting low-producing items which have weak profit margins due to high food cost and longer kitchen preparation time.

Look at sales-by-hour reports to see if there is opportunity to shrink hours of operation. Do you need to be open for overnight room service? Evaluate the pros and cons of modifying the offering during low-traffic times, including menu items, as well as delivery style/procedures.

Review schedules for both front-of-house and back-of-house labor. Do opportunities exist to cross-utilize staff to assist in other areas during off-peak hours? Is there potential to combine job positions to create efficiencies, such as a server or order-taker?

There are many alternative operating models worth exploring. With the rise of third-party meal delivery services — Uber Eats, Seamless, etc. — guests have been using this option frequently, while there also are options to outsource in-room dining entirely via ghost kitchen operations.

However, owners should be cautious when outsourcing as this would affect their overall flexibility. How do you implement this to maintain a luxury offering?

Potential capital investments could contribute to labor efficiencies, particularly on the delivery. Would it make sense to have small tables in rooms so servers don’t need to carry them? Are there other delivery mechanisms that would help lower ongoing operational costs?

Most breakfast orders come during a 60– to 90-minute period. Consider adding an “express breakfast” or proactively seeking pre-orders either through a door hanger menu, concierge outreach — voice or chat — or while setting up wake-up calls. Pre-ordering greatly speeds up the prep and delivery processes.

There are many more options to explore as each asset presents its own unique opportunities and constraints, but these are a few of the most common and successful tactics that hotelAVE has had success in implementing. Additionally, please note, before taking action on anything, it is important to evaluate the pros and cons of each decision, the impact on guest satisfaction scores, as well as review any potential pushback as it relates to brand standards, corporate account or consortia requirements.

Silvie Cohen is senior vice president at Hotel Asset Value Enhancement (hotelAVE).

The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or CoStar Group and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to contact an editor with any questions or concern.

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