REPORT FROM THE U.S.—As guests’ breakfast tastes and expectations change, hotels face higher costs and new challenges, several owners and operators said.
“Guest expectations levels have really gone up, and on the select-service side of the business, they expect more,” said Fred Cerrone, president and CEO of Hotel Equities, an Atlanta-based owner and operator of 40-plus hotels. “Over the years, lower-end and budget properties have added continental breakfasts, so when guests stay at higher-end select-service hotels they expect more.”
During the past 10 years, brand companies have upgraded their standards for breakfast at midscale and upper-midscale brands. Fairfield Inn & Suites was the latest brand in its segment to embrace hot food items on its breakfast program. Launched in April, the new program adds scrambled eggs, a meat item, waffles and oatmeal to Fairfield’s breakfast menu.
“It was about time,” said Mitch Patel, president and CEO of Vision Hospitality Group, operator of two Fairfield hotels with two more under construction. “There’s no question it’s a very competitive business, and mid-tier is extremely competitive. Hampton (Inn) and Holiday Inn Express, as well as other brands in the segment, already offered hot breakfast so it was natural for Fairfield to do so.”
Patel said 40% of properties in the Fairfield system were offering at least one hot item before the new standard took effect, “but they weren’t getting the benefit of any national marketing out of it.”
Cost control
Higher standards generally mean higher costs for operators. Cerrone said five years ago it cost a select-service hotel about $1.50 to $1.75 per day per occupied room to provide breakfast. Today, the cost is between $3.50 and $4 per day per occupied room.
“Where costs really get out of line is when a hotel has a high group or tour and travel component with high multiple occupancies on a per-room basis,” said Mark G. Carrier, president of B.F. Saul Company Hospitality Group. “You can really get hurt because you’re not feeding one business traveler; you’re feeding a room with four teenagers in it.”
Further, said Carrier, higher multiple occupancy business tends to be discounted or booked through online travel agencies.
“The hotel receives a much lower rate but they’re still providing the amenity,” Carrier said. “There’s not much you can do about it except do your best to control your costs.”
Operators said containing breakfast costs is mostly a matter of basic management: monitoring and controlling product and labor costs while maintaining high levels of guest experience.
Ravi Patel, president of Iowa-based Hawkeye Hotels, stresses inventory control in both ordering and preparing food.
“At properties that host evening receptions, we try to cross-utilize foods into breakfast items,” he said. “We also track demand times so we don’t over- or under-prepare food and have waste. We also develop relationships with our suppliers so they understand our business and can assist us in this area. The buying power of a large portfolio also helps.”
Portion control and presentation are important tools for Vince Barrett, VP of food and beverage for New Castle Hotels & Resorts. He said his philosophy is “less is more.”
“We display smaller portions versus stocking up the buffet with lots of food and then having to throw it out because it’s not appealing to the guest,” he said. “We use plate ware and a retail approach to the buffets by putting out smaller quantities that we replenish more often. This has a two-fold effect: We control our costs by managing the food more effectively, and the guest gets a fresher, more appealing food product.”
Labor costs also have risen in some hotels as they add more items to their breakfast buffets.
“Our general managers are now more involved in the day-to-day operations of the breakfast as they need to help control labor costs,” said Mitul Patel, COO of Peachtree Hotel Group. “(GMs) are often the second person helping out (at breakfast) or sometimes the only person serving and maintaining breakfast during slower occupancy days.”
While cost control is important, Cerrone of Hotel Equities believes upgraded breakfast service can be a plus for select-service hotels.
“Instead of looking at it as just an expense we try to turn it into a sales possibility,” Cerrone said. “Otherwise, it’s just an expense hitting your bottom line and you’re basically just playing defense. We look at it as an offensive opportunity.
“Instead of thinking of it as something we have to do that creates additional cost, we try to (upgrade) it through a service and delivery standpoint and then make it up in rate. If the guest experience is good, they don’t mind spending an extra dollar or two in rate,” he said.
The full-service experience
Guest expectations have also changed at full-service hotels, said Carrier of B.F. Saul.
“People are more time-pressed so the idea of sitting down to a full table-service breakfast, while not completely gone, is fading away,” he said. “For us, there has been a degree of balance. (Full-service breakfast) in the near term doesn’t seem to be declining, but at the same time it doesn’t represent any more than 50% of hotel guests.”
To adjust to the new expectations, Carrier said some of his full-service hotels offer buffet options, especially during the week, in which guests can grab and go items from the buffet at a lower price. In addition, many lobbies have Starbucks or other retail areas.
“You can see how people live out there in the real world. The idea of people sitting down eating a big breakfast and investing 45 minutes on breakfast is not what people do too much,” he said. “Table-service breakfast isn’t gone, it’s changed and if you don’t change and provide flexibility to your guests you won’t please them.”