Key Strategies to Help Hotels Boost F&B Profit

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Key Strategies to Help Hotels Boost F&B Profit

Hoteliers, now more than ever, must demonstrate their ability to spend money the right way while building out multiple revenue-generating, guest-centric segments across their operational model. Food and beverage programs are often one of the most under-valued hospitality segments which can deliver a great deal of revenue potential — that is, if it’s done correctly. According to speakers on an F&B panel at The 2017 Lodging Conference, hoteliers who are doing F&B best know how to combine trends with experiences to yield high-margin operations.

Over the last few years, industry experts have predicted that traditional hotel food and beverage is on its way out. While most hotels still offer room service, food and beverage programs are now expected to evolve in tandem with modern guest expectations. Costly room service and mini-bars are — in the eyes of many — now an antiquated format, destined to be replaced by new, more progressive F&B concepts and personalized, guest-driven options. U.S. hotel food-and-beverage revenue per occupied room (F&B RevPOR) increased by 2.7% in 2018, according to total-year data from STR. However, within that increase, we saw a 4.2% decrease in In-Room Dining RevPOR. Room service, after all, represents a costly expenditure for hotels (often without the expected return) and mini-bars are notorious for lackluster performance and massive operational burden.

However, what do those progressive F&B trends and strategies look like today? What is the future of F&B, and how can hoteliers maximize its success?

Fortunately, we have a few ideas to inspire your F&B programs.

Offer Authentic & Unique Experiences

First and foremost, let’s talk about authenticity. Modern travelers are ruled by different booking motivations than previous generations and are influenced by a hotel brand’s perceived authenticity. Hoteliers should be entirely clear on their property’s brand, how that brand is conveyed and supported and, in the case of F&B, the way their programs align with their brand promise. F&B trends will come and go, but there needs to exist an understanding of which trends are here to stay, and true to the hotel’s brand. Often, it’s less about a massive F&B overhaul or menu changes, and more about unique offerings that will make your property stand out. Think about all the social media exposure your ‘share-worthy’ unique features and amenities will get?

Go Local

Are their guests interested in local cuisine and culture that you can infuse into your F&B service? Hotels close to any kind of wine region should always serve local vintages, and local farm to table menus are always a big hit. Many travelers today are interested in eating and drinking local, with an ever-increasing appetite for authenticity. Sustainable consumption and the option to support local small businesses are increasingly important in the eyes of the guest, whether a farm-to-table meal or local Malbec paired with dinner after a long day of travel.

Support Your Staff

Ultimately, the guest experience begins long before a guest arrives on property and ends long after they leave. Within this understanding, we realize that F&B plays a pivotal role in the guest journey, and each meal or drink enjoyed by a guest should further solidify your brand’s commitment to personalized service. Much like any other touchpoint, hotel staff is largely responsible for the experience each guest receives. However, excellent service can elevate an F&B experience, but labor is expensive, particularly in F&B.

With this in mind, it’s ever essential for hoteliers to invest in their F&B staff with training, technology, and amenities in place to support their team. The staff that is overwrought with cumbersome, manual processes will likely be distracted from the more important task at hand — meaningful, personalized guest service. By implementing more modern, self-service options, hoteliers effectively offset the operational demand on their F&B staff and allow them to focus on what matters most: engaging with guests.

Out With the Old

We are also witnessing a gradual shift in in-room F&B programs. As mentioned, mini-bars are a costly expenditure for hotels, due to their labor-intensive model. In the case of non-automatic mini-bars, the average staff attendant can get to roughly 110 rooms per day. In theory, if a 550-room hotel has an occupancy of 80%, it will take approximately four attendants to service the hotel. In the case of non-automatic mini-bars, the average attendant can get to roughly 110 rooms per day. In theory, if a 550-room hotel has an occupancy of 80%, it will take approximately four attendants to service the hotel. While room service and mini-bars are becoming concepts of the past, that doesn’t mean in-room F&B is dead. Rather, it just needs a makeover.

F&B managers must now determine how much of an effect each product’s sales have on overall revenue and cost lines. Hotels around the globe are now investing in a new kind of in-room F&B services, including in-room cocktail service (a dedicated barista curating delicious cocktails in the room) and high-end appliances that offer by-the-glass wine. In-Room, by-the-glass wine has proved especially promising, boasting a capture rate of 25-35% versus the less than 1% capture rate from mini-bars. These trends find their stride in direct correlation with the guest-driven demand for enhanced personalization and convenience, allowing travelers to experience the ultimate marriage of luxury, instant gratification, and comfort. Further to the apparent ‘wow’ factor, these new services enable hoteliers to recognize loyal, high-value guests, celebrate special occasions or — in some cases — recover service with complimentary upgrades or a glass of wine. This creates additional revenue and upsell opportunity.

Guest service has, and will continue to be, revolutionized — so why should F&B be left behind? With a clear brand vision and these strategies in place, hoteliers today have the opportunity to maximize their F&B segment for enhanced revenue and guest satisfaction.

About the Author 

Adam Hoydysh is Vice President of Hotel Sales for Plum. He has more than 20 years of B2B technology and hospitality sales and management experience at F5000 corporations and start-ups. Prior to joining Plum, Adam was Director of Sales for Juniper Networks, driving sales and sales training efforts for Juniper’s advanced technology portfolio of security products. Previous to its acquisition by Juniper Networks for $80 million in 2012, Adam was Director of Sales for Mykonos Software, the leading provider of intrusion deception security for Layer 7. Mykonos was the winner of Wall Street Journal Innovation Award for Information Security. Adam started his career in hospitality at Vail Resorts, the premier mountain resort company and leader in luxury travel. 

About Plum 

Plum reimagines every aspect of the wine by the glass experience. The world’s first appliance that can serve a glass of wine just as the winemaker intended, Plum allows hoteliers to satisfy the moments that inspire guests to enjoy a glass of wine in the hotel’s room product. Plum delivers an unforgettable experience – and profits – in extraordinary style, one glass at a time. To learn more visit www.plum.wine