On-site dining is back, and as guests return, hotel owners are eager to serve up extraordinary culinary experiences.
Two years of closures and restrictions have taken a toll on the industry. Consumer expectations are evolving, and hotels must adapt to meet new demands. In the meantime, the labor market and supplies make it increasingly challenging for hotels to elevate the food and beverage experience while maintaining operating performance.
Striking a Balance
During the pandemic, most hotel restaurants opted to reduce F&B offerings, cutting back to grab-and-go options or limiting hours. Today, as interest in on-site dining grows, many have yet to return to business as usual. Labor shortages are partly to blame. According to the U.S. Bureau of Labor Statistics, almost 2 million jobs remain unfilled in the leisure and hospitality sector — a figure close to mid-pandemic peaks. In areas of the country that are particularly affected, costs are only rising.
This is reflected across other verticals, too. Department stores that made their names through bespoke customer service and a curated selection of products have lost their elevated edge. For on-site dining to survive, we must find ways to manage expectations on the front end.
Now more than ever, food and beverage offerings are difficult to get right — and expensive to get wrong. When should hotel restaurants be open for business? How many staff members should be working? Do the menu and concept fit with the service model? Operators must weigh opportunities to generate revenue with the costs of staffing. And whatever compromise they strike should align closely with patrons' needs.
For lifestyle hotels, the equation is even more complicated. Lifestyle brands don't just seek to attract guests to their on-site dining locations, but locals, too. However, to overcome negative perceptions about hotel dining, these restaurants must offer a level of service that makes people want to visit repeatedly. In this scenario, operators may need to get comfortable with it being several months before they turn a profit.
Service Matters
From Top Chef to TikTok, there is a wealth of information about food and restaurants available, and the average American consumer is a savvy diner. Yet the innovations and restrictions ushered in by the pandemic have led many to reevaluate their priorities.
The appetite for long, fussy, multi-course meals is declining. Despite the return to on-site dining, guests still favor the convenience of counter service and online food ordering and delivery platforms. If diners venture out, they want great food and a memorable experience with family and friends.
To address pressing labor challenges, some restaurants have shifted to a hybrid service model, where guests order via a QR code, and servers bring drinks and dishes to the table. For many consumers, this represents the perfect example of technology cutting down on one-on-one interactions without sacrificing quality or speed.
That said, service often brings people back. If patrons think their experience in a restaurant is similar to what they could create at home, they are unlikely to return. Restaurants cannot afford to lose the personal, welcoming service that makes the dining experience special. With fewer touchpoints between guests and staff, every interaction counts.
Celebrating Local Flavors
With profit margins shrinking, competition among restaurants is high. It is vital for on-site dining concepts to resonate with the target audience, which is part of our focus with Taste and Theory Restaurant Group. Diners and owners alike are interested in bespoke restaurant concepts, which for owners can result in more profitable food and beverage destinations that draw in both hotel guests and the local community.
A market study is a useful tool in demonstrating gaps and opportunities in the local landscape. It can also reveal trends in restaurant closures. If a hotel is considering opening an Italian eatery and finds that three such establishments have recently closed in their locale, it is probably time to reconsider in favor of a more successful cuisine or theme.
When it comes to choosing a concept, restaurant groups generally take one of two approaches. The first is to pick one model that is popular all over the U.S. and do it well everywhere. The second is to create a series of distinct, carefully designed restaurants. One-of-a-kind lifestyle brands like those we encounter with Evolution and Taste and Theory typically benefit from the latter route. In this case, along with filling a gap in the market, a dining experience should echo the identity of the hotel and its neighborhood. Businesses can cut through the noise and win consumer loyalty by celebrating local personality in decor, music and a thoughtfully compiled menu.
Staying Relevant
Post-pandemic, the stakes for on-site dining are high. Hotel owners need to be pragmatic about what they want to offer — and how they can adapt their model to accommodate a diminishing workforce. If dining is simply a transactional amenity that patrons expect, it can be minimal: a breakfast buffet or a simple counter-service café. A Michelin-style restaurant, on the other hand, can afford great exposure and boost a hotel's brand but is unlikely to be profitable on its own.
Even with a strong business plan locked in, flexibility is key in responding to changing conditions. As office occupancy declines, restaurants that served once-busy commercial districts may need to pivot their pricing structure to ensure their locations remain viable.
Similarly, food and beverage tweaks can keep menus relevant. Lengthy, expansive menus are harder to execute — and more expensive to maintain. Every drink and dish should be exceptional to keep customers coming back for more. That means prioritizing quality over quantity.
As an industry, we must continue to find ways to innovate if we are to thrive in the post-pandemic era. By balancing customer demand with the realities of the market, hotels can continue to provide unforgettable dining experiences for their guests.
Charlotte Robertson is the senior director of lifestyle operations at Evolution, a specialized operating division of Aimbridge Hospitality.
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