People in the industry commonly refer to the positive influence created by a hotel’s food-and-beverage operation as a “halo effect.” Put plainly, the impact F&B has on your hotel can shape the way your guests perceive the hotel’s market positioning in a positive OR negative way.
In New York City where my office is based, there has been a surge of newly constructed independent hotels capitalizing on the positive hotel market in the city as well as travelers’ desire for an authentic New York experience. One of my recent clients owns a property, Hotel 718, that will enter the downtown Brooklyn market later this year. One of the most critical elements discussed during the planning/visioning phases revolved around the best programming for the retail-level bar and restaurant. At the end of the day, the discussion centered on deriving the most positive impact from the restaurant concept to reinforce the hotel’s place in the market as an independent, authentic boutique hotel. The conversation focused less on deriving the highest amount of revenue from the space. In this case, the “halo effect” of the restaurant operation was believed to be of paramount importance to the hotel’s overall success.
Back to basics
Walk-in coolers and freezers: When is the last time you went into your property’s walk-in cooler unannounced? If you haven’t done it in a while, you might be surprised. I recently had the experience where an excellent GM asked me to identify opportunity areas in the kitchen operation. I went through the walk-in coolers and freezers and found the following issues within the first 10-minute visual inspection:
- Food items stored unwrapped, with no date, in non-translucent storage pans and hotel pans. In one instance, two different products were in the same tray: one was uncooked raw chicken breast stored at an angle so the blood was running into unwrapped Canadian bacon. In a cruel moment of irony, just that morning I had been in the hotel’s restaurant outlet and sat next to four female business travelers who all ordered the eggs benedict for breakfast. When I eventually asked the sous chef (the executive chef was off at the time) what was going on, there was a general lack of awareness and training about the dangers of such poor food handling and the improper storage methods. The acts and non-acts were not malicious; rather it was a training and education issue. Oh, and he thought buying Lexans for storage purposes was too expensive for the GM to approve.
- Soup stored unwrapped in a large container sitting on the floor directly under the cooler’s condenser unit that was dripping water condensation into the soup.
- Pre-torn and bagged Iceberg lettuce, carrot sticks and celery sticks. Most of us in the industry know that convenience products come with a cost, both financial and quality to our guests. In the case of bagged lettuce, this product was highly preserved with a chemical known as “Freshway” that delays the browning process of the lettuce. Unfortunately, it is also known to cause some guests intestinal problems not unlike the way MSG gives some people headaches. I encourage you to evaluate the true cost of the convenience products you use and determine if your kitchen staff is taking a shortcut that is effectively putting thorns into your hotel’s crown.
- Walk-in freezer that was very poorly lit (read: hard to find items), with boxes of frozen foods that had not been dated. Clearly without a date, it is hard to employ the First-in, First-out (FIFO) method of inventory management. How do we know when that box of chicken wings on the bottom of the stack came in? It is possible the box on the bottom is living there in perpetuity while new inventory is stacked on top every week.
I ended up finding the GM immediately after my inspection and insisted she look at what I was seeing so it could be fixed prior to any additional guest impacts. There are many ways your property can lose money in the kitchen operation including theft, poor receiving practices, ordering and inventory management, food handling and sanitation. When I was a hotel GM, I made it a practice to visit walk-in coolers on a weekly basis, and my chefs generally liked the idea that I took an interest in his operation. The good ones will welcome it.
Wine list
Too many times I see hotels that have improperly priced their wines. The reason: Let’s say we are budgeted to run a 28% beverage cost. The logical extension of this is: I need to mark up my wine three-and-a-half times to keep that margin.
This practice fails on so many levels. Not only does a guest resent being asked to pay US$30 for a wine he can buy at home for US$10 in a package store, but it also fails to recognize one critical idea when it comes to wine bottle pricing: wine sales are about contribution to profit, not about beverage cost. Think of wine as the average daily rate of your beverage operation. If you sell the same room you sold for US$100 today for US$120 tomorrow, where does that extra US$20 go? Directly to the bottom line. Your variable costs have not changed to sell the room; just the rate has gone up. Wine sales are the same. If you buy a bottle for US$15 and sell it for US$30, you just scored US$15 in pure profit.
I can hear GM’s out there shouting, “That’s 50% beverage cost; I can’t do that!” Take a look at your wine sales and, if you are mispriced, I suggest you are actually suppressing wine sales at your property and losing valuable revenue.
While we are on the subject of wines, what type of vessel are you using to serve wines in the front-of-the-house? Is the staff effectively trained and comfortable opening wine at the table? And how does your glass of wine travel to a guestroom on room-service? I have peeled back many a layer of crumpled, wine-soaked cellophane in my days as a guest in some pretty nice hotels.
Conclusion
Your hotel doesn’t have to be 4-star and have “foo-foo” items on the menu for you to understand the ways your F&B can either enhance or damage your business. All operators should concentrate some energy and resources on this highly volatile aspect of the operation. Would it really be that hard to make your own “homemade” dressings, source local produce in-season and purchase fresh breads instead of using the famous “par-baked” ubiquitous roll we have all seen countless times? I don’t think so.
Look at it this way: If you took these extra steps, you would be serving your guests better, saving money and ultimately saving the planet. But your kitchen staff might have to work a little harder. You make the call.
Gavin Landry is a contributing HNN author on hotel operations. He is principal of a full-service consulting practice, Landry Hospitality Consulting Services, L.L.C., specializing in hotel development, operations and marketing. Gavin is an Adjunct Professor at NYU’s Preston Robert Tisch Center for Hospitality, Tourism and Sports Management. He is an invited and named speaker at the Middle East Hotel Marketing Conference which will be held in October 2011 in Dubai, UAE. Gavin can be reached by phone at 347.633.5722, on the web at www.landryhospitality.com or via email at gavin@landryhospitality.com.
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