BERLIN — How people want to experience dining is adapting so rapidly that hoteliers need to buckle in but also keep laser-like focus on their budgets.
Staying ahead of design and dining trends is one of the biggest challenges for hotel restaurants, and it's difficult for operators to keep up.
Food and beverage “has changed so much that restaurateurs nowadays are under pressure to renovate every year. The [restaurants] have to remain trendy, the pace is much faster, there is a need to adapt product but also not to spend too much,” said Alex Sogno, CEO of Global Asset Solutions, during a panel at the International Hotel Investment Forum. Sogno's company works with about 20 hotel ownership groups.
In addition to great food, diners now want to smell the food coming from the kitchen, to hear live music and to feel part of the entire process and experience at a restaurant, said Patrick Apostolo, senior director of operations at Radisson Hotels Group. He added Europe is ripe for a notable increase in concept restaurants that play to all of these needs.
“After COVID-19, [food and beverage] was the garbage of the hotel. That has changed, but we need to start to make sense of what its role is and how it will add to [a hotel’s] profitability,” he said.
Customer ratings account for the atmosphere of the restaurant and the dining experience, not just the food quality.
“Now it's about experience, socializing, seeing friends, getting out of the house and doing something other than [home] delivery,” said Alexis Marcoux-Varvatsoulis, partner and chief consulting officer at Livit Design. The company designs restaurants, many of which have been located in hotels.
New Trends
Building menus and adjusting pricing to account for rising food costs and staff wages is a constant struggle for hoteliers and restaurateurs. Sogno said that while hotel restaurants cannot have dynamic pricing to the extent that hotel rooms can have, there is an ability to create events that help push prices.
“You cannot charge $60 for a burger, but a dedicated restaurateur knows how to make more revenue. We just need to be more creative,” Sogno said.
Apostolo said he thought dynamic pricing on food and beverage would never work. A restaurant's location factors in to how much business it can generate in its local neighborhood and how far customers are willing to travel to reach it and experience it.
“Size matters, too. Inflation [on food] is up to 22%, and you have to adapt to that to maintain margins,” he said.
Research and customer feedback can help, Apostolo said.
“We looked at the data to understand what the consumer living close to the hotel wanted to eat. If they went across the city to a Chinese restaurant, then open one where they already are, for instance. And then we look at labor costs. We need to execute every step,” he said.
Certain markets have earned a foodie reputation. Marcoux-Varvatsoulis said New York City might be one of the few markets that has a “black market of reservations, as it is so difficult to get a table.”
Dark kitchens, food halls, branded residences to provide regular diners and concept cafes all are novel ideas that are catalysts to increase food-and-beverage revenues, panelists said.
Hotel restaurants must avoid food waste as best they can, Sogno said, both to safeguard the environment and the profit-and-loss account.
“We now see these details on the bill. Five years ago, that would not have been the case, but it's quite the norm now,” he said.
There are opportunities to reduce margins on hotel essentials, whether that's through understanding guests better or cultivating best practices with employees. Luxury guests, for example, spend twice as much on water compared to guests at 3-star hotels.
“How often do you walk through the kitchen and see the tap on full, and no one cares. This is education and training,” Sogno said.
And it's critical for hotel teams to listen to all customers — those staying at the hotel and those who are just visiting, Sogno said.
“We can be very successful in hotels, sometimes providing 40% to 45% of a hotel’s profit. Yes, that might apply more so to the Middle East, but owners must not rely on hotels’ operators so much. We need to look outside,” he said.
Data Matters
There's room for better key performance indicators on restaurant sustainability, and this might be even more important for branded hotel supply using more complicated supply chains, Marcoux-Varvatsoulis said.
“We need to do better. AI and IT are our allies. Packaging is also important. This does not mean vegan, vegetarian and healthy. Even if it is not healthy, guests want to know where the food comes from,” he said.
Apostolo said 98% of restaurants respect the basics of sustainability, but so much more can be done to elevate menus, experiences and revenues.
“Everything starts with your top line, and then there is a simple regression. You can know what you need and reduce what you waste,” he said.
One solution is branded-hotel operators could view their restaurant more as digital platforms, not as the latest and greatest contribution to the global culinary scene, Sogno said.
“If they admitted this, rather than saying 'We are restaurateurs,' the share price would increase,” he said.
Marcoux-Varvatsoulis said no owner would let their chef run their hotel.
Food and beverage “can drive [average daily rate] and occupancy, but it is difficult to prove, but hoteliers never give up trying to prove it does. We need to find the correct recipe, but is that the hotel’s responsibility or that of someone from outside who will charge 10% off your top line?” he said.