Posts Tagged ‘ Hotel F&B Concepts

Method to the Madness, Part II, Hotel Eating & Drinking Concepts

Great restaurants and bars are about passion and joy and excitement and culinary wonder. Right? But that’s after they open. Getting there? Another matter.

In March, Part I of this series about developing hotel restaurant and bar concepts discussed determining the criteria that a new concept must meet in order to be successful. At GVC we use a 7-part “methodology” to create a concept. It’s not rocket science, right? Or maybe it’s more difficult than rocket science, since thousands upon thousands of very experienced and bright folks have failed at it, one time or another. An outline of the seven steps methodology can be found at the GVC web site. Here I’ll go into a bit more detail.

The Second Step of this Methodology is Anything but a Tea Party!

While Part I is largely strategic, Part II gets into the “hard work” – it’s certainly no “tea party”. A thorough exploration of the “internal” side of the status quo is required. This includes an examination of the hotel brand, the hotel customer, the facility and its operations. While this blog pertains to a hotel that is already operating, much of what follows would apply to a new-build as well. Mostly the sources for the information would differ.

Let’s begin with the hotel’s brand. Learn what you can about the Brand and Brand image. What types and categories of restaurants and bars fit? Corporate Brand “owners” can help here, as they have usually thought this through. Get an answer to this question and you’ll be headed in the right direction, Brand-wise: “place any existing restaurant or bar in your prototype hotel – what would it be?”

Also essential: know the Brand Standards. And try to learn the demographic and lifestyle habits of the Brand customer. This will be different in some ways at the local level, but it’s a good starting point.

Next, and far more challenging: learn about the hotel guests and customers. Determine the answer to these and other questions:  Who is the guest, and why are they here? Where do they come from? Business, leisure? What type of business? Traveling alone or as part of a group? How did they book? What is their average rate? If part of a group, what is their group’s policy about charging restaurant and bar charges to the room? How did they arrive at the hotel? What is their average length of stay? I like to study a hotel’s segmentation analysis and then extend it to eating and drinking occasions. Hotels are amazing when it comes to tracking rooms. But rooms don’t eat in restaurants or drink in bars. People do.

Yes, Madness does have a Method

Simple? Maybe. If we were done. But what about the meeting and banquet guests who are not also staying at the hotel? I like taking a hard look at this category of customer, because it’s a little easier to nail down, even quantify, the eating and drinking potential. Let’s take meeting guests. Usually these potential customers eat lunch during their visit to the hotel. So, if we can determine how many such guests we have each year, what percentage have a banquet luncheon vs. eating “on their own”, we have a good starting point. While we’re at it, let’s find out how long the average break is. Hotel restaurants often close at lunch. The information provided here will factor into a decision whether or not to do this.

Now let’s look at the hotel facility. Access, parking, signage, visibility, and location within the hotel, for example.

Access alone generates a number of routes of inquiry. Access from the outside: car, bus, taxi, limo and walking. Now let’s go inside. Access to the restaurant and bar areas from the lobby, from the banquet areas, from the elevators, from the stairwells. Visibility, signage and wayfinding indicators are just some of the things to look for. During access what is the flow, especially when busy? What does the customer see as they enter, the “sense of entry”. What is possible? And since we’re assessing the facility, what about the employee flow, from the kitchen? And what about the attributes that aren’t readily apparent: sound system, lighting, Wi-Fi, natural light control and HVAC to name a few.

Finally, operations. What is the restaurant’s and/or bar’s performance? This requires a detailed analysis of revenues and costs. And sales patterns must be divined, which is possible if the POS system is current and is functioning well. Don’t forget a close look at menus and all marketing collateral of the existing concept.

Finally – or maybe first? – talk with people. Executive people. Guest people. Employee people. Owner people. Even competitors. Or nearby restaurants and bars – they’ll almost always offer their impressions of the facility you’re working to improve.

Next time – Part III, a thorough external analysis.

These are my thoughts, let me know yours.

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“Culture of Outlets” — Ban this Word!

And when was the last time you said, “Let’s go eat at an outlet”? I’ll bet you’ve never heard this dialogue:

Spouse A: Honey, it’s Saturday, let’s go out to dinner.

Spouse B: Sounds great. What kind of outlet are you thinking about?

Spouse A: What? I said dinner.

Spouse B:  Got it. At the hotel we call them outlets. Hey after dinner at an outlet, let’s go to an outlet for drinks.

Spouse A: I don’t want to eat at an outlet, I want to dine at a restaurant, then drink at a bar.

Spouse B: Sounds a little strange to me, but OK.

Also an Outlet

So, “B” works at a hotel. Why don’t we say “restaurants & bars” when we work at hotels? Well, it’s convenient to say outlets if you want to encompass every type of service in one word. Room Service is not the same as restaurant, and a mini bar is not the same as a Bar. But both are “outlets”. I suspect the term emanated from accounting where analysis often requires lumping the non-banqueting areas together.

Well, lump them together all you want, but don’t call my restaurant an outlet. Or my bar. Guests don’t eat at outlets – just ask them. I can see the intercept survey now: “Sir, would you mind sharing some of your opinions about the outlet you dined at last evening?” Restaurants, Bar/Lounge, Room Service and Mini Bars all work for me. Let finance people refer to Eating & Drinking Revenue Centers.

Cute Outlet, but not a Restaurant

So I pledge here and now: stop what this “culture of outlets”. This culture supports a second-class image for hotel restaurants and bars. Language both reflects and reinforces culture:  ban the word “outlet” from your hotel. Hold your F&B head high.

And while we’re at it, here is some more “culture of outlets” behavior we should put to rest:

  1. Using the hotel logo on bar and restaurant promotional materials. Your restaurant has a name, right? Your bar? And logos? [Note: I’ve seen hotel restaurants and bars without logos – you can design a useable logo on line for a couple hundred bucks. Do it.]
  2. Room Service should be positioned as a service of the restaurant, not a service o the hotel. Yes, in some instances Room Service is truly unique, with a different staff and different kitchen than the restaurant. But in most cases, when it comes to Room Service, we fail to leverage all of the internal marketing we’ve done for our restaurants and bars. We don’t use restaurant and bar logos, we don’t talk about the restaurant Chef and we don’t do anything to indicate that the Chef even knows that his or her food sometimes goes to the rooms (how about: “We have prepared this Signature from our restaurant kitchen specifically for our Room Service Guests”, etc.)

    This is Also an Outlet

  3. Performing “competitive shops” at other hotels. So you really think your guest leaves the hotel for dinner and walks or drives…to another hotel? A competitive survey should determine where guests eat and/or drink when they don’t eat/drink at your bars and restaurants. Your employees and your regular guests can both tell you this. Ask them.
  4. Hotel web sites. My recent “Banana” blog addresses the need for independent web sites for your bars and restaurants. But how about the hotel web site? I actually think that the driver of “culture of outlets” here is space: “dining” is a 6-character word. “Restaurants & Bars” is 18 spaces. The same culture at work, I think, that figures it’s OK to use “Events” as a placeholder for “Weddings”. Reorganize the site, make the space.

Please let me know what words or phrases you think might work better than “outlets”.

Those are my thoughts, let me know yours.

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How to Manage a Light Bulb

Let’s get this out right now: this is not “how many _______ does it take to screw in a light bulb” or anything like that. I’m not good at screwing in light bulbs. My wife will ask her seven-year-old daughter to replace a bulb, before she’ll ask me. Sure, I’m exaggerating. Sometimes she asks the ten-year-old.

But once that bulb is in, I can manage it as well as anyone. No so at some bars and restaurants I’ve seen in hotels. Bright lights in the bar. Bright lights at dinner. Lighting levels that change dramatically for no apparent reason. Lighting levels that differ from area to area within a restaurant or lounge, for no apparent reason.

Light Bulb Energy

We often overlook the importance of managing lighting levels. Lighting levels? How about music levels? Type of music? And TV’s. What’s showing – and why? It’s 9 o’clock, do you know where your mute button is? Do your guests like the cacophony of three separate programs blaring in your bar? We don’t understand why our places are sometimes empty, yet we’ve effectively killed any and every opportunity for energy.

How do you fix this? Sure, sometimes a better speaker or two and an additional dimmer switch might be required. But mostly it’s about strategy and scheduling.

We schedule our teams to service the guest. Every week. No problem. So why can’t we schedule the environment in which the guest will be served as well? The answer is, we can. Here’s one way to do it.

Make a grid for each outlet, with the hours of operation in columns, an hour for each column. TIP: if the outlet is open to or visible from a public area when closed, it’s just as important to manage its look and “feel” for that time period as well.

First, The FORECAST

At the top row, write “customer” – who is the customer you are targeting each hour the outlet is open?

Next row, write “occasion” – what is the occasion of their visit? Breakfast (re-fueling)? Meeting? Unwind after work? Unwind after meetings? Returning from dinner outside the hotel? Etc.

Finally, third row, write “energy level” or “mood” or whatever best sets the tone for the “feel” you want to support.

Now, the SCHEDULE

Record the appropriate level or channel or number for each hour, for each of the managed ambience items, including:

  • Lighting level #
  • Music volume
  • Music channel
  • TV station (mute except for scheduled “events”)

You will have multiple light controls, multiple TV’s, etc. And you can add items – maybe how the bar looks (“meal set” for certain hours, for example).

Recently I was at a smartly managed hotel in the New York area and the Lobby Lizard – here known as a Lobby Ambassador – has a checklist that includes six items that influence bar atmosphere, and they are checked multiple times each evening. I like that.

Teach your lizard how to manage that light bulb.

Those are my thoughts, let me know yours.

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Method to the Madness: Part I, Hotel F&B Concepts

So, “Why is a raven like a writing desk?” What is the right concept for our hotel restaurant? And, do either of these questions have a definitive answer?

Maybe. At GVC we use a 7-part “methodology” to create a concept. It’s not rocket science, right? Perhaps it’s more difficult than rocket science, since thousands upon thousands of very experienced and bright folks have failed at it, one time or another. An outline of the seven steps methodology can be found at the GVC web site. Here I’ll go into a bit more detail.

Stephen R. Covey’s seminal The 7 Habits of Highly Effective People says (habit 2), “Begin with the end in mind”. https://www.stephencovey.com/7habits/7habits.php. Well, if I knew exactly what the final concept should look like, I could skip the methodology. But Covey is right – let’s figure out what it has to be like, let’s begin by determining the criteria by which success will be judged. What must the concept achieve to be called successful?  If the concept doesn’t meet the criteria, then it won’t work.

In general, a concept within a hotel should support the hotel’s brand image. For example, a concept for a Holiday Inn hotel could be too upscale, while the reverse holds true for a Ritz Carlton. I recall having to convince a senior hotel executive that he should abandon his plans to make a Waffle House (albeit a successful company and brand) the exclusive restaurant for a Crowne Plaza hotel (another successful brand).

A second criterion concerns the hotel’s functional needs. How must the concept “serve” the hotel? Which meal periods must be offered? Which services (food, beverage, to-go, room delivery?). What are the hours of operation that a successful operation must serve the hotel? And what is the expected profit contribution to the hotel?

Next, what is the restaurant’s role? Is it to be a destination or an amenity? In other words, is its purpose to draw local guests or to service the hotel guest? Most often the answer is a complicated combination of these two perspectives, but the discussion needs to occur early in the process.

A fourth criterion requires a primary Unique Selling Proposition – a feature that differentiates it – and the hotel – from the competition. A final concept will have many special attributes, but it should have a prime USP that defines it, enables us – and our customers – to talk about it. But it’s too soon to say what that should be – that comes with ideation.

Chains will sometimes add that they should be able to duplicate the concept in other hotels. This will spread the development costs and will serve to give the hotel brand a talking point as well. It will further help optimize the company’s resources, and support its development team.

The test of these and other criteria is this: if the concept fails to meet one of the criteria, can it still be judged a success?

Perhaps you can think of additional criteria. I’d love to hear from you. In the meantime, how about the answer to that riddle?

“Have you guessed the riddle yet?” the Hatter said, turning to Alice again.
“No, I give it up,” Alice replied. “What’s the answer?”
“I haven’t the slightest idea,” said the Hatter.
“Nor I,” said the March Hare.
Alice sighed wearily. “I think you might do something better with the time,” she said, “than wasting it in asking riddles that have no answers.”

These are my thoughts, let me know yours.

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Forget the Answer, It’s the Question that Matters

Recently one of my company’s projects was especially challenging – and interesting – because it required me to expand my breadth of knowledge about a certain area in a short period of time. I would have even a shorter period of time to interview key players, to get to the root of the issues. If I failed to get to achieve an understanding of the underlying fundamentals driving the issues, then the project would fail.

Jacques-Louis David (1787)

So, I began planning my questions. Which reminded me of the favorite saying of one of my mentors, “if you ask the wrong question you’ll get the wrong answer”.

Great questions are more powerful than great answers, as Socrates proved many centuries ago. It’s just so easy to ask a question, get an answer consistent with expectations, and move on to the next topic or issue. But Socrates would solve a problem by breaking it down into a series of questions, a sort of “verbal distillation” process (“distillation” – I knew I could get back to an F&B topic).

This question process influences us today, and may witnessed in critical processes such as the “scientific method” and TQM.

For a hotel restaurant analysis I might want to know “who is the customer” and seek out traditional information relating to their stay (business or leisure, group or individual, age-income ranges, etc.). But I might learn more if I ask how the customer arrived here, why did they eat here instead of somewhere else, where are they going and what are they doing after they dine, and how are they getting there, for example.

F&B DIRECTORS RESTAURANT MANAGERS, HAVE YOU ASKED THESE QUESTIONS?

  • What is the purpose of my restaurant? Why does it exist? (Begin every exploration with “purpose”)
  • Not, “who is the customer?” but “what is the occasion?”, why are they here? (If you answer “breakfast” and move on, I have not been sufficiently persuasive).
  • Not “what is my labor cost?” but “what is my productivity rate?”, then break it down further, job position and meal period, for example
  • Not “what is my food cost?” or even “did I meet my budgeted cost?” but “what is my variance to theoretical this month?”
  • Not “how can I improve on my weaknesses?”, but “how can I improve on my strengths?” (As for weaknesses, find someone good in those areas, partner with them, and get on with your strengths…)
  • Not “what are the hotels in my competitive set doing?” where does  the guest eat when they don’t dine with us?” Why?

These are my questions, let me know yours.

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Another Way to Structure Corporate F&B?

First, let’s get real about hotel F&B.

If you’ve been in hotel F&B most of your career, you may be surprised to learn that all F&B at all hotels (USA) accounts for about 4% of “food away from home”. The remaining 96% of the $400-billion+ industry, which includes restaurants, institutional feeding, caterers and kiosks, is generally profitable. Those that are not profitable go out of business. Hotel F&B is generally unprofitable unless there is a lot of banquets/catering space. And hotel restaurants are never profitable, unless they are operated by an independent operator.

Unlike freestanding restaurants, hotel restaurants that are not profitable (and this would be nearly all of them – see previous sentence), do not go out of business. Nor should they, as their purpose is to support the hotel. This isn’t wrong, and it isn’t stupid. It is, well…tradition. So we accept it. And build structure and infrastructure around it.

In the last decade or two, some hotel chains have started to lease to or partner with restaurant brands (including celebrity chef “brands”). If you’re willing to relinquish control of some of your services and maybe even a portion of your image, and especially if you can retain the most profitable end of the business, banquets/catering, this can be a rewarding strategy.

But there may be another approach. It’s a paradigm shift, really. “Spin off” your corporate F&B into a separate (wholly owned) corporation. Next, lease all of your restaurants and F&B to the new corporation. F&B employees will work for the new company, and F&B Directors (they will now be restaurant “General Managers”) will report to the new corporation. And surely you will have to “beef up” the corporate F&B infrastructure.

What a mess, huh? Hotel GM’s – or whomever is responsible for the lease – will have to negotiate services and payment for services as well as lease rates and terms. All of those free meals, discounts and other bargains passed on to sell rooms will have a real cost attached to them.

And what about F&B? Well, they’ve got to make a payroll don’t they? And pay their vendors. They may have to pay for administrative and accounting services and maintenance services, and utilities – all of which can and should be negotiated and included in the lease.

Wait a minute – this is a lot of hassle! Why bother? Well, unlike a standard lease to a third party, your company is still “in control”. And this new perspective may go a long way toward making both businesses – hotel and F&B – more profitable than ever before. Oh, and now you own a restaurant company. I wonder if that makes you part of the “remaining 96%”?

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