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Grab-And-Go- A Hotelier’s Dream Come True

Costly Room Service Not Delivering Much To The Bottom Line

Monday, March 20, 2017
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By Paul Breslin

Rising costs and shifting expectations of the guests have hoteliers taking a hard look at room service. How do we keep this iconic amenity relevant and evolving with the demands of the new travelers?

With the demands in life and less time available for the full restaurant dining experience, today’s diners are choosing quicker options. Guest counts continue to decline gradually for midscale and casual dining brands and likely for hotel restaurants as well. An extensive shift to accommodate this trend is in place.

The recent movement from room service to "food-to-go" is a hotelier’s dream come true. The cost to operate a successful room service has been the nemesis of this amenity. Frankly, unless you are residing in a particular resort, luxury hotel, and or in a high-volume hotel with a unique design, the room service as we know proves to be a very difficult skill to master.

The basics of “hot food hot” and “cold food cold” still rule today. What has changed is the need to create foods free of certain harmful ingredients, freshly made, organic, farm to table, healthy, no GMO’s, and a specific procedure for food allergies. Not to mention fast and priced right in the eyes of the guest.

This coupled with the culinary menus of today make it even more difficult to deliver the food on time, at a reasonable price, all while exceeding the expectations of our guests.

So why is this such a challenge? To start, room service generates relatively low revenue when compared to total revenue. For example, according to the STR Host Data for 2016 the average total revenue for luxury hotels was less than 1.5% of total revenue. When compared to revenue per occupied room (POR), room service only averaged $4.78 (POR), compared to banquets at $44.64 POR and venues at $28.03 POR.

When compared as a percentage of total sales the picture is bleak as well. For all full service hotels in the U.S., the average was 1.14% as illustrated in the chart below

Food and beverage a la carte is difficult enough—then add delivery with the increased labor and benefits costs, and we’re taking a bit out of our profits and in most cases a loss.

graph

To counteract this loss, our food and beverage professionals have come to the rescue with innovation and a customer-centered focus. What if we had a “to-go" option? What if guests place the order from their rooms and pick up their meals in a professional “to go” presentation? This minimizes wasted time, requires less capital, simplifies the supplies, reduces payroll and results in happier guests.

According to industry colleague Roger Drake, a 30 year veteran in the multi-unit chain restaurant and food and beverage industries, the trend for casual dining, fast food and other multi-unit brands dedicating space within an existing sit-down restaurant for grab-and-go options is a trend that’s gaining momentum. For example, one of Drake’s fellow colleagues, who happens to be a CEO, has noted that the best way to increase same-store sales and compete with the emergence of fast casual brands is for restaurants to start testing their own grab-and-go options within their traditional sit down restaurant space.

Likewise, hoteliers can utilize the concept within their room service offerings, or even dedicate space within the sit-down restaurant.

Yes, this is the new way forward. Uber Eats and others have created a new passion for food-to-go, and hotels are jumping on board to meet the new demands. With the help of technology, innovative menus, and the evolving expectations of food delivery itself, hoteliers can meet the growing demand of food-to-go rather than losing room service options.

Hoteliers in urban markets should also take note: Incorporate local restaurant favorites to satisfy even more guests with other choices too.

As Roger Drake affirms, even fast food behemoth McDonald’s is testing grab-and-go. In some of their newly renovated and redesigned stores, they have introduced and tested carry out bags and sandwich boxes in a guest accessible area of the restaurant. With the significant dollars McDonald’s spends on market research to determine the trends that drive future ROI, the focus on increased testing of grab-and-go options within McDonald’s stores is a key indicator that this trend is here to stay.

___________________________________________________________________________________

Paul Breslin, Managing Director of the Atlanta office of Horwath HTL, is a 35-­‐year veteran of the hospitality industry. His background within the industry is all encompassing, with extensive experience in hotel operations, development and asset management with major branded hotels as well as independent and smaller luxury hotels.

Paul is a member of the prestigious International Society of Hospitality Consultants and the Hotel Asset Managers Association. He is a Certified Hotel Administrator by the Educational Institute of AHLA. He is a founding member and immediate past president of the Atlanta Hospitality Alliance, and currently serves on its Board. He also serves on the Governmental Affairs Committee of GHLA. Additionally, Paul is a Certified Hospitality Educator (CHE) and is the Executive-­‐in-­‐Residence in Lodging for the J. Mack Robinson College of Business, Cecil B. Day School of Hospitality at Georgia State University.

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