Hotel F&B Thoughts & Solutions

Last week I claimed “F&B Directors: if you’re promoting the same specials and menus to all of your Happy Hour guests, you’re missing revenue opportunities.” And I explained why a hotel Happy Hour is a multi-occasion marketing challenge. This week’s blog breaks it down.

Let’s be strategic for a moment and lay it out. The chart below demonstrates that the offering itself as well as the means of marketing should differ for your different occasion targets.

Of course there’s one more marketing issue to address: what about collateral in the lounge itself? Consider merchandising that entices your happy hour guests to try your restaurant. Think like your customer, what might persuade a happy hour customer to try the restaurant? The after-work customer might be swayed by a nicely packaged to-go offering. The pre-dinner guest by convenience? Excitement?

And what of the happy hour offer details? I don’t recommend discounting with dollars off or percentage off offers. If your value message is “we’re inexpensive” it may be inferred, albeit incorrectly, that you are overpriced at other times, and/or you are not a “quality” establishment. And this could rub off on the hotel, so think twice about it.

Consider a unique offering with special prices.

Special menus mean a little bit more work. But a happy hour menu with authentic values, not offered at other times, can really help you target. An example of a non-discount happy hour offering might be “premium brand beers and cocktails at House brand prices”.  Nice to get your customers used to the premium labels as well. The food portion of the menu might be geared to the after-work or after-meetings crowd, as suggested above, while the beverage specials might have the hotel guest in mind. Of course all of your other offerings remain available at regular price.

So, get Happy, and get strategic. Don’t plan for Happy Hour – plan for Happy Occasions, and develop offers and marketing that work for those occasions.

Are you losing huge profit opportunities in meetings audio-visual and technology sales? Last week we looked at two of these four questions:

1. How is your audio-visual offering described on your web site?

2. Do you have a marketing plan for selling audio-visual equipment?

This week we’ll look at 3 & 4, and I’ll point you toward some best practices.

3. How do these offerings set you apart from your competitors?

4. How important is audio-visual to your F&B profit picture?

THREE.  About your offerings being competitive: I probably wouldn’t have to ask this question if we were talking about bar, restaurant, catering or room service menus.

Is your product essentially generic? Same things “everyone” has? Your third party vendor probably has access to a lot of equipment, especially high-tech, that you don’t list. Why don’t you list it? Because no one orders it? Because you only list what your competitors list? Because you don’t participate in creating the list (please see #2)?

For example, I rarely see “digital white boards” listed. There are many types, the latest allow meeting participants to literally email (or save to a thumb drive) whatever is on the board at a specific time.  I’ll bet your vendor has access to them. Or, how about audience polling systems. Same thing. Of the last 20 hotels and conference centers I’ve looked at, I’ve seen digital white boards twice, and audience polling systems just once. What’s your profit on a digital white board compared to a flip chart?

And what’s the impression you make on a meeting planner when you list high-tech items, and when you list services such as “web-casting your keynote speaker’s address”?

FOUR. What is audio-visual’s contribution to your departmental profit? For this information I looked at a handful of brands and checked the operators’ P&L’s.  I took the net commission a hotel makes from selling A-V and divided by total departmental F&B profit. The average was 10%. In other words, 10% of all hotel F&B profit comes from audio-visual. This is an average and your numbers may be much lower or much higher. But at some hotels, 10% could be thousands or hundreds of thousands of dollars.

Let’s summarize Parts I & II.

1. Create a serious presence for audio-visual and other technology products and services on your web site – I recommend a Technology Menu.
2. Develop a marketing plan for audio-visual and other technology – use your F&B marketing skills as your guide, you’ll do well
3. Use A-V and other technology to enhance your competitive advantage in the meetings marketplace.
4. Set a goal for increasing your commission/profit dollars, and work with your A-V company to get there. Next year, work with them to create some win-win packages.

Finally, here are a few Best Practices noted while conducting research for this column.

• The Hyatt Shanghai, Ritz-Carlton Santiago and Westin Montreal don’t claim to have an audio-visual expert. Rather, they each have a “Technology Concierge”. If you don’t like that title, how about “IT Consultant” or “Director of Technology”?
• Marriott Banquet menus have a section dedicated to Technology.
• The Marriott San Diego Gaslamp’s Technology section bundles several of their technology features into Presentation Packages, with everything a presenter could need for a certain type of presentation. Smart.
• The Holiday Inn Chicago Mart Plaza has an excellent technology menu. So does the Radisson Plaza-Warwick Hotel in Philadelphia. Pictures, graphics, professional layout, packages and a long list of equipment. Attractive layouts,  just like they were selling food and beverage.

Those are my thoughts, let me know yours.

This is my first secret blog. Please don’t tell. Maybe this will go viral, because I used the three magic words “please don’t tell”. These words are so effective for spreading Word of Mouth that one of Manhattan’s better “speakeasy” cocktail bars used PDT for its name.

Please Don't Tell

Was In-N-Out Burger, founded in 1948, the first to understand the power of a secret? I don’t know when the secret menu started, but I do know that Word of Mouth actually existed before the Internet. In fact social networking existed before the Internet. No, really. So did “Animal” Style Burgers.

The Secret Menu trend has grown, and there are non-published items now available, if you know to ask, at Starbucks, Burger King, Fatburger, Subway and many more. And it’s not just about QSR. There’s the ribeye steak at Nobu. In fact a recent article posted at the New York version of Eater.com listed “secret” items at some of Manhattan’s finer establishments, including David Burke Kitchen and Momofuku.

A Secret Menu

My good friend and great hotelier Craig Poole used the secret menu approach to build traffic for his new bar which opened smack dab in the middle of the recession when price-consciousness was at its peak. Some people make lemonade if you give them a lemon. Craig will make a lemon soufflé. To pump up his new bar he simply whispered to guests as they checked in that if they said the right word to one of the bartenders there was a phenomenal value awaiting them. He told them the word and what the value would be, and added “please don’t tell”.

How and why do secret menus work? Well, we like to know secrets. Or rather, we like that others don’t know, or don’t “get it”. Which brings me to Seth Godin’s remarkable 2008 book Tribes: We Need You to Lead Us.  It’s my opinion that Tribes explains the popularity – and success – of the secret menu phenomenon.

Tribes: We Need You to Lead Us By Seth Godin

Godin defines a tribe as a group of people connected to each other, and to a leader and to an idea. The “secret” creates loyalty, makes me feel that I belong. Godin said in an interview “…you can’t have insiders unless you have outsiders. All tribes have outsiders. That’s what makes them a tribe.” I’m not comparing an Animal Burger to the change-the-world causes that Godin refers to. But I think the same mechanics are at work. He talks about leadership success founded in action for and with the tribe, not “to” the tribe. A restaurant billboard or poster markets to you, but their secret menu, with its wink and nod, is both for you and with you.

Which brings me to the final point – what is decidedly not “with” or “for” you is “secret prices”. I use this term to refer to the practice of marketing – sometimes even menuing – something without telling the customer the price.

This crass and even counter-productive practice puts the customer in the position of having to ask the price – how does that make your customer feel, do you think? Yet it’s not uncommon in foodservice. Last month my wife and I visited the gorgeous lounge at a major downtown hotel. The drink list had prices listed for beer and wine, but not for the cocktails (this seems to happen with vendor-printed menus). A week later we dined at an upscale branded restaurant in a chain hotel and listened to the server whet our appetites with an detailed description of the night’s special. And, you guessed it, we had to ask the price. This always makes me think that the server is embarrassed about it. Finally, I encountered another online catering menu this month, with no pricing. How hard to you want me to work to get your information for my function. Easier to book with one of your competitors who tell me everything up front.

Secret menus: cool. Secret prices: not.

Final tip. Want to have some fun with your own “secret menu”? Try using a QR Code based promotion, something that would appeal especially to your smartphone customers.

Those are my thoughts, let me know yours.

The Russians are Coming the Russians are Coming is a great, hilarious movie from 1966. That’s the same year Woody Allen urged us to try the Moscow Mule cocktail.

Russia’s most famous cocktail. Well, not exactly their cocktail, actually it’s American.

Regardless, the Moscow Mule is back. What is it back from, and why is this important? The answer to the first part of the question is the forties, fifties and sixties. The second part is a little more involved.

First, what is a Moscow Mule anyway? It’s a cocktail made with vodka, ginger beer and lime. Sometimes simple syrup is added, which seems like overkill as ginger beer has ample sugar. One of its unique features is that the Moscow Mule is traditionally and “properly” served in a copper mug.

Why it’s popular today is partly due to the rebirth of “cocktailism” and the newfound respect for the great classic cocktails: the Mule is at least a semi-classic. But there’s another reason: 45 years after Woody Allen mugged for Smirnoff, Oprah has let it be known that the Moscow Mule is now her favorite cocktail.

The Moscow Mule origin is a fun and interesting story. It involves both New York and Hollywood. Of course. There were these two guys in a bar. Really. In fact, they were in a hotel bar. One worked for a distillery that made a product no one in America wanted or even knew about. The other one owned a bar and an interest in a soft drink franchise that left him way overstocked in another unknown product, ginger beer. Legend has it that a third person, a woman, was present and had somehow acquired an inventory of copper mugs.

The little known distilled product mentioned in the previous paragraph was vodka and the distillery was Smirnoff, which had been purchased by G.F. Heublein Brothers, Inc. for $14,000.  In 1941 the most popular spirit in America was gin, but what happened at New York’s Chatham Hotel Bar on this day would ultimately bring about the “fall” of gin in favor of vodka.  The players were John G. Martin of Heublein and John “Jack” Morgan, President of Cock ‘n’ Bull Products (which produced ginger beer) and proprietor of the Cock ‘n’ Bull Tavern, a bar on Sunset Boulevard in Los Angeles popular with celebrities. While the inspiration occurred in New York’s Chatham Hotel Bar, the drink caught on fire, much like the Margarita, in Hollywood and its environs.

And there are many more Mule-related stories. There are stories behind copper drinking vessels which were used in ancient times, and more recently by American colonists. There are plenty of stories behind ginger beer. And vodka, of course.

OK. Interesting, but so what?

The answer is “stories are important”. We all love stories. They are the building blocks for developing a Mixology Culture or Cocktail Culture for your bar. There are similar stories for nearly every well-known, and certainly every “classic” cocktail.

What is your point of difference, what separates you from the competition? Your competitor can carry the same products, show the same TV shows and play the same music you do. But your bartenders are unique to your establishment. What if your cocktail list has a Moscow Mule and your bartenders, every bartender, could talk about the Oprah connection or the Smirnoff connection or the “hotel bar” connection? The message isn’t “you should have a Moscow Mule in your bar”, it’s “use the great cocktail stories to build a culture of high quality for your bar”.

Those are my thoughts, let me know yours.

Food trucks competing with a well-equipped catering department at a midscale or even upscale hotel? Forget it, I’m kidding.

[FYI: the second highest Zagat food quality rating for any restaurant in San Francisco, 28, is a food cart that’s available 2 days a week. I’ve been. Zagat’s right.]

I don’t know a single catering director who has expressed concern about this. I’m not sure it’s on anyone’s radar. Yet. In fact I know some pretty smart hoteliers who have hosted food truck events. I wrote about it last year.

[Oops. I just Googled “Weddings & Food Trucks” got 23 million hits.]

[Oops again. The Knot just published its 11 top weddings trends for 2011, and guess what?]

We all know that, really, food trucks are a fad, and anyway health departments will be shutting them all down soon and we can get back to the way things were. For example the city council of Richmond CA just put the kibosh on new licenses for 45 days while they figure out which regulations should apply, and how. Closer to home, Atlanta has very strict enforcement policies.

[On the other hand cities such as L.A. – 10,000 food trucks – and Santa Monica and Chicago are passing strict but reasonable laws to govern the trucks. In fact, food truck owners welcome this, they understand that ultimately it will bring them more and new customers who are now reassured about the safety aspect. The New York Times said this “may be the ultimate sign that this faddiest of food fads is going mainstream”.]

Why is this happening, and why is it a trend – not a fad? Some will cite technology and others the recession and they would not be wrong, but there is more. There is a permanent shift in what we value, and this shift began before the recession. The best explanation I’ve seen for this is found in Spend Shift by John Gerzema & Michael. The subtitle says it all: “How the Post-Crisis Values Revolution Is Changing the Way We Buy, Sell, and Live”. Call it “new normal” or whatever you wish: consumers are rejecting “overconsumption”. The authors of Spend Shift cited 5 emerging values – emerging prior to the recession by the way. Among them are these two:

• We are “adopting a more nimble, adaptable and thrifty approach to life”
• Old status symbols appeal less, and “purpose, character, authenticity and creativity” are pathways to the “new good life”

Let’s apply this to food truck catering. What do they have that a top notch hotel doesn’t? Affordability. Variety in venue (pick a venue, any venue the trucks can access). Specialization – oftenFood Trucks are great at just one thing, that’s all they do. And Authenticity. For examples check out the Top 20 Food Trucks in the USA. Fun, Buzz, Creativity – and it’s all wrapped in social media marketing.

And now it’s time to get back to hotel catering. Is this really a “threat” to your business? If you asked me to do a SWOT analysis for your business, and if you are located in a major market, I would have to answer “yes”.

OK so now what?

I’ll suggest a response in Part II next week.

Those are my thoughts, let me know yours.